ARIAS U.S. NEUTRAL

PANEL RULES

Stephen M. KennedyClyde & Co US LLPThe Chrysler Building, 16th Floor405 Lexington AvenueNew York, NY 10174(212) 710-3935Stephen.Kennedy@clydeco.us

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SECTIONS OF ARIAS U.S. NEUTRAL RULES

INSTRUCTIONS FOR ADOPTION AND APPLICATION

1. INTRODUCTION2. DEFINITIONS3. NOTICE AND TIME PERIODS4. COMMENCEMENT OF ARBITRATION PROCEEDINGS5. RESPONSE BY RESPONDENT6. APPOINTMENT AND COMPOSITION OF PANEL7. CONFIDENTIALITY8. INTERIM DECISIONS9. LOCATION OF PROCEEDINGS10. PRE-HEARING PROCEDURE11. DISCOVERY12. SUMMARY DISPOSITION AND EX PARTE HEARING13. ARBITRATION HEARING14. FINAL AWARD

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ARIAS U.S. NEUTRAL RULES

I. BASED ON STANDARD RULES (ARIAS U.S. RULES FOR RESOLUTION OF INSURANCE AND REINSURANCE DISPUTES)

SIMILAR PROVISIONS IN BOTH SET OF RULES:

•RULES DO NOT SUPERSEDE ANY PROCEDURES AGREED UPON BY PARTIES THAT MAY ALTER OR BE DIFFERENT FROM THE RULES

•PRE-HEARING PROCEDURES RELATING TO THE ORGANIZATIONAL MEETING

─ POSITION STATEMENTS─ HOLD HARMLESS─ SETTING ARBITRATION SCHEDULE

•DISCOVERY RELATED PROCEDURES ─ EXCHANGE OF DOCUMENTS

─ DEPOSITIONS─ PANEL DISCRETION TO LIMIT DISCOVERY

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ARIAS U.S. NEUTRAL RULES

• ARBITRATION HEARING

─ PANEL NOT OBLIGATED TO FOLLOW STRICT RULES OF LAW OR EVIDENCE

─ PANEL GENERALLY HAS DISCRETION TO DECIDE THE TYPE AND AMOUNT OF EVIDENCE ADMITTED INTO

RECORD

II. WAYS IN WHICH NEUTRAL RULES ARE DIFFERENT

1. COMPOSITION OF PANEL

i.NO PARTY ARBITRATORS

ii.PANEL MEMBERS MUST BE “NEUTRAL” AS DEFINED BY RULES:

a.DISINTERESTED, UNBIASED, AND IMPARTIAL;

b.DOES NOT ADVOCATE FOR EITHER PARTY; AND

c.ARIAS U.S. CERTIFIED NEUTRAL ARBITRATOR LIST (SECTION 2.2) – INDIVIDUALS WHO PLEDGE IN WRITING TO SERVE ONLY AS NEUTRAL ARBITRATORS AND WHO MEET ARIAS U.S. NEUTRAL PANEL CRITERIA SET FORTH IN SECTION 6.3 AT TIME OF PLEDGE; OR

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ARIAS U.S. NEUTRAL RULES

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ARIAS U.S. NEUTRAL RULES

d. MEET THE NEUTRAL CRITERIA IN SECTION 6.3

SECTION 6. 3: CANDIDATE CANNOT SERVE IF DURING PAST FIVE YEARS PREVIOUSLY SERVED

AS PARTY ARBITRATOR IN MATTERS FOR ONE OF THE PARTIES OR PARTIES’ LAW FIRMS AMOUNTING TO MORE THAN 10% OF TOTAL NUMBER OF PARTY ARBITRATOR APPOINTMENTS

AS UMPIRE IN MATTERS INVOLVING ONE OF THE PARTIES OR PARTIES’ LAW FIRMS AMOUNTING TO MORE THAN 20% OF TOTAL NUMBER OF UMPIRE APPOINTMENTS

AS EXPERT OR CONSULTANT IN MATTERS FOR ONE OF THE PARTIES OR PARTIES’ LAW FIRMS AMOUNTING TO MORE THAN 50% OF EMPLOYMENT AS AN EXPERT/CONSULTANT

AS COUNSEL OR FOR ONE OF THE PARTIES IN MATTERS AMOUNTING TO MORE THAN 10% OF EMPLOYMENT AS COUNSEL

AS EMPLOYEE BY ONE OF THE PARTIES

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ARIAS U.S. NEUTRAL RULES

B. “PARTY” MEANS: (1) PARENTS, SUBSIDIARIES AND AFFILIATES WHOSE INSURANCE AND REINSURANCE DISPUTES ARE MANAGED BY SAME GROUP OF INDIVIDUALS THAT MANAGE THE NAMED PARTY’S INSURANCE OR REINSURANCE DISPUTES OR (2) A NON-AFFILIATED CLAIMS MANAGERS OR TPA

2. APPOINTMENT PROCESS

A. EACH PARTY NOMINATES SIX CANDIDATES FROM ARIAS U.S. ARBITRATOR LIST OR CERTIFIED NEUTRAL ARBITRATOR LIST

B. SEND NOMINEES TO ARIAS U.S. AND OTHER PARTY

C. ARIAS U.S. SENDS NEUTRAL ARBITRATOR QUESTIONNAIRE TO CANDIDATES ON ARIAS U.S. ARBITRATOR LIST WHICH INCLUDES DISCLOSURES RELATING TO SECTION 6.3

D. CANDIDATES WHO ARE ON CERTIFIED NEUTRAL LIST SENTARIAS U.S. UMPIRE QUESTIONNAIRE

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ARIAS U.S. NEUTRAL RULES

E. ONCE THERE ARE 12 CANDIDATES WHO MEET NEUTRAL CRITERIA, EACH PARTY RANKS CANDIDATES 1-12 AND NOTIFIES ARIAS U.S. OF RANKINGS

F. ARIAS U.S. WILL ADD TOGETHER THE PARTIES’ RANKINGS FOR EACH CANDIDATE

G. THREE CANDIDATES WITH LOWEST SCORES WILL SERVE; THERE ARE CERTAIN TIE-BREAKING PROVISIONS

H. THREE ARBITRATORS WILL SELECT THE CHAIR OF PANEL

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ARIAS U.S. NEUTRAL RULES

3. OTHER PROVISIONS

A. IF SELECTED, ARBITRATORS CANNOT ACCEPT APPOINTMENT AS EXPERT/CONSULTANT, COUNSEL OR NON-NEUTRAL ARBITRATOR FOR EITHER PARTY

B. NO EX PARTE COMMUNICATIONS WITH ANY ARBITRATOR CANDIDATE BEFORE OR AFTER APPOINTMENT

C. PARTIES SHARE EQUALLY IN COST OF THREE ARBITRATORS

D. PANEL MUST ISSUE A REASONED DECISION

E. PARTIES HAVE OPTIONS SET FORTH IN INSTRUCTIONS FOR ADOPTION AND APPLICATION

1) Adjust Neutral Criteria2) Eliminate Requirement of Reasoned Decision