January 2019 E-Bulletin

This month's E-Bulletin topics include:

  1. Cases in Process to Be Removed after 365 Days of Inactivity
  2. Kentucky PIP Arbitration
  3. To Deny or to Uphold…
  4. NASP 2019 Subrogation Litigation: Skills & Management Conference

Cases in Process to Be Removed after 365 Days of Inactivity

Image of an arrow circling the words 365 daysSometimes our users begin a case in the Online Filing platform but do not submit it for arbitration. These unsubmitted cases leave incomplete data in the system. To help maintain the integrity of the data in our system, beginning this year, cases in process in Online Filing that have had no activity for 365 days will automatically be removed from the system.

If you have begun a case in Online Filing that you no longer wish to submit, you may remove it manually by selecting Delete on the Cases in Process screen.

Screenshot of the Cases in Process screen
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Kentucky PIP Arbitration

Image of a Kentucky mapThe Kentucky Insurance Arbitration Association (KIAA) was created by KRS 304.39-290 and mandates arbitration to resolve intercompany disputes arising from subrogation rights specific to but not limited to KRS 304.39-070. The KIAA’s Plan of Operation endorses Arbitration Forums, Inc. (AF) as an alternative forum. The Plan (Article 4e) includes the following, which is commonly known as the "PIP subrogation deductible":
In order that there be fair allocation of significant losses, while at the same time eliminating the unnecessary costs in the handling and shifting of insignificant losses, no member shall make application for or be entitled to receive, and no arbitration award shall be made for damages paid or payable to the member reparations obligor for the first $1,000 in the aggregate of loss so paid arising from a single occurrence without regard to the number of persons to whom basic or added reparations benefits are paid or payable.
To avoid confusion for the arbitrators hearing these cases, we suggest:
  • Applicants should subtract $1,000 from their company claim amount and clearly indicate in their contentions that they did so (or explain why they did not, if appropriate).
  • Respondents should raise and support the deductible argument as a damage dispute if the Applicant did not do as noted above.
  • Arbitrators should review the company claim amount and amount paid to see if the deductible has been applied, and if not, the award should be reduced.
AF will be unable to take corrective action if the above steps are not taken, and a post-decision inquiry is submitted requesting a reduction in the award. The matter will need to be resolved by the parties to ensure compliance with Article 4e.
 
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To Deny or to Uphold…

Image of a gavel in front of booksTo deny or to uphold, that is the question. Did you know a no-coverage affirmative defense may receive an upheld ruling without a denial of coverage letter? Rule 2-4 in the AF Reference Guide states a denial of coverage letter is required to have a filing administratively closed. An administrative closure means AF will withdraw the filing from the hearing schedule, and the filing is closed (or that the Respondent is out of jurisdiction, if there are multiple Respondents). When a filing is not administratively closed, the affirmative defense will be reviewed by the arbitrator(s) to decide the coverage issue. The filing, at the time of hearing, may or may not contain a denial/disclaimer of coverage letter. The lack of a denial-of-coverage letter would not necessarily be a denial of the no-coverage affirmative defense. Rule 2-4 of the AF Reference Guide gives an example of a vehicle theft and corresponding police theft report. The arbitrator(s) would look to the evidence as to whether a no-coverage affirmative defense was supported. Please see the AF Reference Guide under Rule 2-4 regarding no coverage affirmative defenses.
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NASP 2019 Subrogation Litigation: Skills & Management Conference

Omni Rancho Las Palmas Resort & Spa – Rancho Mirage, CA
March 28–29
Register today!
 
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