An arbitrator is the one to decide whether a dispute over a reinsurance agreement should be submitted to an arbitrator or a judge, a federal appeals court said Friday, in affirming a lower court ruling.

Detroit-based Alliance Health and Life Insurance Co. and Galveston, Texas-based American National Insurance Co. entered into a medical excess reinsurance agreement, effective Jan. 1, 2016, according to the 6th U.S. Circuit Court of Appeals in Cincinnati’s ruling in Alliance Health and Life Insurance Co. v. American National Insurance Co.

Under the agreement, American National said it would reinsure Alliance Health for losses incurred during the agreement’s term. The agreement included a provision stating disputes must be arbitrated, and that arbitrations may begin no more than three years after the agreement’s effective date.

Alliance Health initially denied a claim submitted to it in April 2017 but changed course in January 2018 and provided coverage retroactively from January 2014 through December 2016, the decision said.

In December 2018, Alliance Health sought almost $1 million in reinsurance coverage for the claim. American National rejected the claim in September 2019, which was more than three years after the agreement’s effective date, stating the employee who filed the original claim was not an eligible employee under the employer’s plan.

Alliance Health sued American National in U.S. District Court in Detroit. American National moved to dismiss the case on the ground the agreement required Alliance Health to submit its claim to arbitration. Alliance Health responded that because the claim was outside the agreement’s three-year limit for beginning arbitration, it could proceed in federal court.

The district court agreed with American National and dismissed the lawsuit and was affirmed by a three-judge appeals court panel.

The agreement provides that no arbitration can begin more than three years after the agreement’s effective date and Alliance “points to no other language that might suggest an intent to assign the time-limit question to a judge,” the decision said.

“Consequently, the question whether the time limit applies is a procedural matter for an arbitrator to decide.”

Attorneys in the case did not respond to requests for comment.