arbitration clause

  • A gentlemen’s agreement designed to resolve differences between the insurer and the reinsurer without litigation. It generally provides for the appointment of two arbitrators, each party having the privilege of selecting one, who in turn appoint an umpire who must be agreed on before arbitration proceedings begin. The wording of the clause may vary, but the general purpose is that difficulties shall be settled on an equitable rather than a strictly legal basis.

    Internal Revenue Service 1

1Internal Revenue Service, Internal Revenue Manual 4.42.6 Glossary, http://­www.irs.gov/­irm/­part4/­irm_04-042-006.html (last accessed Dec. 22, 2009).