Zurich announced the company will reinstate its Claims Alternative Dispute Resolution (ADR) program for settling claims that are at an impasse and cannot be resolved through its standard catastrophe adjusting process.
As part of its response to Hurricanes Ike and Gustav, the ADR program helped generate the highest percentage (98.8 percent) of resolved claims for a single insurer after Hurricane Katrina, Zurich said.
“The 2008 hurricane season was one of the most destructive on record – second only to 2005 – and due to the unique size and scope of the damage, we are responding with the same level of service now as we provided to them then,” said Jane Tutoki, Zurich’s chief claims officer in North America. “Similar to our experiences in 2005, we expect the bulk of claims to be closed within our proven standard claim management process, but in those instances where an impasse occurs, the claim may qualify for the ADR program – where our goal is to settle the dispute in a timely manner to the satisfaction of all parties involved.”
As in 2005, Zurich has retained Kenneth Feinberg to serve as the ADR’s program administrator. An attorney and one of the nation’s leading experts in mediation and alternative dispute resolution, Feinberg was most notably appointed by the attorney general of the United States to serve as the Special Master of the Federal September 11th Victim Compensation Fund of 2001. As Zurich’s ADR Program Administer, Feinberg will oversee and manage the selection of experienced and independent mediators and arbitrators.
“The ultimate goal of the program is to enhance or expedite resolution of key disputed issues, reduce the potential for protracted and costly litigation, and ultimately streamline the claims resolution process,” Feinberg said.
Two channels exist for a claim to enter the ADR program:
1. Zurich professionals review claims and identify those that meet the program criteria; or
2. Agents and brokers, on behalf of policyholders, may submit requests for consideration of claims they believe meet the ADR program criteria.
Zurich’s ADR program is comprised of three steps:
• Resolution Meeting – An initial meeting is scheduled with the policyholder in an effort to resolve issues that are prolonging the closure and payment of the claim. The policyholder is allowed to invite other third parties, such as accountants or attorneys, to the meeting as well. If final agreement is not reached, the policyholder will be invited to resolve any open issues through nonbinding mediation. In 2005, 98.2 percent of disputed claims were resolved and closed in this first stage of the program.
• Nonbinding mediation – A single mediator is selected by Feinberg from a panel of mediators, but the policyholder has the right to choose a different mediator, subject to Feinberg’s approval. In all cases, this mediation process is voluntary, nonbinding, confidential and its cost will be paid by Zurich. In 2005, 1.8 percent of disputed cases were settled in this stage of the program.
• Binding arbitration – The final stage of the program is for cases that have been through mediation, which can be submitted to a single arbitrator for binding resolution of the entire claim, subject to the mutual agreement of the policyholder and Zurich. As with the nonbinding mediation phase, a single arbitrator is selected by Feinberg, but the policyholder has the right to choose a different arbitrator, subject to Feinberg’s approval. Decisions rendered by the arbitrator are deemed to be final, with no right of appeal. This phase of the program is also paid for by Zurich. In 2005, no cases reached the binding arbitration level.
“Zurich, brokers, agents and policyholders all share a common goal: resolving claims in an appropriate and timely manner,” said Tutoki. “The ADR program is designed to provide the resources and expertise required to resolve the claim and get our policyholder’s business up and running as quickly as possible.”
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