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In ordering arbitration of a credit insurance dispute, a federal court in Nevada rejected the argument that the credit insurance policy came within a Nevada law limiting arbitration agreements in health insurance contracts.
In Coleman v. Assurant, Inc., No. 2:06-CV-00925-RLHRJJ, 2007 WL 2695239 (D. Nev. Sept. 10, 2007), Coleman, an MBNA cardholder, allegedly signed up for insurance, through Assurant, to cover his credit card debt if he became unable to pay the balance.
Upon developing a cardiovascular illness, Coleman filed for coverage. Subsequently, Assurant gave him notice that they had fulfilled their insurance obligation, and MBNA threatened to report his remaining credit card balance as “bad debt.”
Coleman filed suit alleging various claims, including breach of contract. MBNA and Assurant moved to compel arbitration pursuant to an arbitration agreement in the cardholder agreement.
In opposing the motion, Coleman argued that the credit insurance policy fell under a Nevada law limiting arbitration agreements in health insurance contracts. See Nev. Rev. Stat. § 689B.067. The Court rejected this argument because that law specifically exempts credit insurance. Accordingly, the Court issued an order compelling arbitration.
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