UPDATES & ANALYSIS

3.02

U.S. Supreme Court won’t hear Iowa Insurance Commissioner’s appeal of Iowa Supreme Court decision

by Rox Laird | March 2, 2021

The U.S. Supreme Court will not hear the Iowa Insurance Commissioner’s appeal of a 2020 Iowa Supreme Court decision that the Federal Arbitration Act preempts Iowa’s statute governing liquidation of a failed insurance company. The U.S. Supreme Court’s denial of certiorari in the appeal of Ommen v. Milliman came in an order released March 1.

The case stems from the failure of CoOportunity Health Inc., an Iowa-based insurance company established under the Affordable Care Act to sell health insurance. CoOportunity received a $145 million federal loan but within a year reported $163 million in losses, and was declared insolvent by Iowa Insurance Commissioner Doug Ommen.

Ommen, in his role as liquidator of CoOportunity, sued Milliman Inc., which provided actuarial services and assistance on applications for federal funding, rate setting, and financial reporting to federal and state regulators.

The Iowa Supreme Court, in a decision issued on April 3, 2020, agreed with Milliman’s argument that the dispute must be resolved through arbitration under its contract with CoOportunity, which included an arbitration clause.

The decision for the Iowa Supreme Court was written by Chief Justice Susan Christensen and joined by Justices Edward Mansfield, Thomas Waterman, Christopher McDonald, and Dana Oxley. Justice Brent Appel filed a dissenting opinion.

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