// Add the new slick-theme.css if you want the default styling
FINRA is requesting comment on proposed amendments to the Firm
and Associated Persons Document Production List and Discovery Guide. The
proposed amendments to the Discovery Guide require firms and associated
persons, upon request, to produce documents concerning third-party insurance
coverage in a customer arbitration proceeding. These proposed amendments would strictly
limit the circumstances under which insurance coverage information could be
presented to the arbitrators.
The amendments add a
new list item regarding the production of information relating to insurance
policies obtained through third-party carriers. FINRA states that it believes
it is important to address the industry concern that firms with sufficient
capital to pay arbitration awards should not be required to produce insurance
information automatically in every arbitration case. For this reason, FINRA is
proposing to require a party seeking the production of insurance information to
expressly request that an opposing party produce insurance information.
Specifically, the new
list item would require firms and associated persons, upon request, to produce
documents sufficient to provide details concerning the coverage and limits of any
insurance policy regarding a named party under which any third-party insurance carrier
might be liable to satisfy in whole or in part an award issued by an arbitrator
in the subject arbitration proceeding or to indemnify or reimburse a party for
payments made to satisfy an award. The new list item would state that it may be
prejudicial for arbitrators to be given information related to the coverage or
lack of coverage by liability insurance. FINRA states that it will train
arbitrators to address potential prejudice and that any party wishing to submit
evidence at a hearing relating to insurance must demonstrate to the arbitration
panel that: (1) there are extraordinary circumstances warranting admission of
the insurance information; or (2) the existence of an insurance policy is
directly related to the dispute outlined in the statement of claim. The party
must seek express authorization from the arbitration panel to submit the
evidence.
FINRA believes that the proposed amendments might result in
fewer customer motions to compel production of insurance information and more
consistent arbitrator rulings on the subject of insurance and expects that the
parties to exchange the documents without arbitrator or staff intervention. It appears that this is once again a push by
the Claimants as insurance issues should not be in front of the arbitrators at
all, since arbitrators serve in the role of judge and jury.