Opinion ID: 441992
Heading Depth: 1
Heading Rank: 4

Heading: Rebates.

Text: (a) Except as otherwise expressly provided by law, knowingly permitting or offering to make or making any contract of life insurance, life annuity or accident and health insurance, or agreement as to such contract other than as plainly expressed in the contract issued thereon, or paying or allowing, or giving or offering to pay, allow, or give, directly or indirectly, as inducement to such insurance or annuity, any rebate of premiums payable on the contract, or any special favor or advantage in the dividends or other benefits thereon, or any valuable consideration or inducement whatever not specified in the contract.... Tex.Ins.Code Ann. art. 21.21, Sec. 4(8) (Vernon 1981). Section 16(b)(1) provides that parties injured by deceptive acts or practices proscribed by article 21.21, Sec. 4 may recover three times the amount of actual damages plus costs and attorneys' fees. Id. at Sec. 16(b)(1). 3 The Texas DTPA makes it a deceptive trade practice to represent that an agreement confers or involves rights, remedies, or obligations which it does not have or involve, or which are prohibited by law. Tex.Bus. & Com.Code Ann. Sec. 17.46(12) (Vernon Supp.1984). Life of America contends that Aetna engaged in such acts by offering rebates, which are prohibited by Texas insurance law. See supra note 2 4 The pertinent parts of sections 3 and 4 of the Arbitration Act are as follows: Sec. 3. If any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement, providing the applicant for the stay is not in default in proceeding with such arbitration. 9 U.S.C. Sec. 3. Sec. 4. A party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition any United States district court which, save for such agreement, would have jurisdiction under Title 28, in a civil action or in admiralty of the subject matter of a suit arising out of the controversy between the parties, for an order directing that such arbitration proceed in the manner provided for in such agreement.... 9 U.S.C. Sec. 4. 5 The pertinent parts of the McCarran-Ferguson Act provide as follows: Sec. 1011. Congress declares that the continued regulation and taxation by the several States of the business of insurance is in the public interest, and that silence on the part of the Congress shall not be construed to impose any barrier to the regulation or taxation of such business by the several States. 15 U.S.C. Sec. 1011. Sec. 1012. (a) The business of insurance, and every person engaged therein, shall be subject to the laws of the several States which relate to the regulation or taxation of such business. (b) No Act of Congress shall be construed to invalidate, impair, or supersede any law enacted by any State for the purpose of regulating the business of insurance, or which imposes a fee or tax upon such business, unless such Act specifically relates to the business of insurance.... 15 U.S.C. Sec. 1012. 6 According to Life of America's brief, it complains it should not be forced to make contributions to Aetna under the Reinsurance Agreement because such contributions would be unlawful. Life of America has not yet made the payments it complains of. Were the arbitrator to agree with Life of America, the insurance company would be relieved of the obligation claimed by Aetna, avoiding contribution and actual damages. Its brief does not contend that Life of America is entitled to reimbursement for any past payments 7 Section 11. Applicable Law This Agreement shall be governed by the Laws of the State of Connecticut. 8 See supra note 1 9 In Southland, the United States Supreme Court stated that in enacting the Arbitration Act, Congress declared a national policy favoring arbitration and withdrew the power of the states to require a judicial forum for the resolution of claims which the contracting parties agreed to resolve by arbitration. 104 S.Ct. at 853