Opinion ID: 3065334
Heading Depth: 3
Heading Rank: 4

Heading: Ceded unearned premium and ceded

Text: outstanding loss reserves as of the end of the month. UNITED STATES LIFE v. SUPERIOR NAT’L INS. 105 The positive balance of (1) less (2) less (3) shall be remitted by [SNICIL] with its report. Any balance shown to be due [SNICIL] shall be remitted by [U.S. Life] as promptly as possible after receipt and verification of [SNICIL]’s report. It is understood that premium hereunder is payable as received by [SNI- CIL] on monthly billed policies. (Emphasis added.) Article XVIII provides U.S. Life with access to SNICIL’s records and allows U.S. Life to inspect “all books, records and papers of [SNICIL] in connection with any reinsurance hereunder.” [16] We hold that the panel did not exceed its authority by requiring U.S. Life to pay a tendered bill within thirty days of receipt because a conclusion that U.S. Life’s Article XVIII audit right is independent of its Article XV obligation to pay a bill “as promptly as possible after receipt and verification” is a plausible interpretation of the reinsurance contract. The panel plausibly interpreted Article XV’s verification right as not being a right to verify claims but as being a right to verify the arithmetic done by SNICIL in its bill report. Having experience in the insurance field, the panel could have determined that it was practical for U.S. Life to receive and verify SNICIL’s Article XV.B report within thirty days. The panel’s reading of the reinsurance contract need not be correct; rather, it must “ ‘draw[ ] its essence’ ” from the terms of the contract. Misco, 484 U.S. at 36 (quoting United Steelworkers of Am. v. Enter. Wheel & Car Corp., 363 U.S. 593, 597 (1960)). The panel’s decision did so. For this reason, vacatur under § 10(a)(4) is inappropriate.