April 2021 E-Bulletin

This month's E-Bulletin topics include:

  1. Updates to AF’s Arbitration Rules
  2. TRS Feedback – We are listening!
  3. Attention Recovering Parties: Claim or Policy Number Required
  4. Reference Guide Update: Concurrent Coverage Disputes in Special Arbitration

Updates to AF’s Arbitration Rules

Illustration of a clipboard with a list of rules on itAF’s Member Council and Board of Directors approved the following updates to the arbitration rules. The changes will become effective August 1, 2021.

The changes have been bolded. 

Rule 1-4
  • For new Auto filings and TRS PIP and Medical Payments filings, the Recovering Party should name all involved member companies and any consenting non-member companies, if applicable, in the filing. A responding company may add other parties and/or argue the negligence of unnamed party(ies). Where the negligence of an unnamed party(ies) is argued, the Recovering Party may either withdraw its filing and re-file at a later date, or pursue recovery outside of intercompany arbitration, or allow the filing to be heard. By allowing the filing to be heard, the Recovering Party thereby agrees to accept any award against a responding company and waive its right to pursue any balance directly from any unnamed party.
Rule 2-4
  • If a Denial/Disclaimer of Coverage is being pled (see definition of Denial/Disclaimer of Coverage [b]), the party will be ruled out of jurisdiction so long as a copy of the denial/disclaimer of coverage letter to the party seeking liability coverage for the loss is provided as part of the evidentiary material submitted. If no such letter is provided of where the denial concerns concurrent coverage (Article First [b], Special Arbitration Agreement), the case will be heard and the arbitrator(s) will consider and rule on the coverage defense.
Rule 3-9
  • A responding company may assert No Liability Policy in Effect, Denial of Coverage, Policy Limits, or Liability Deductible/SIR via AF’s website up to 60 calendar days from the decision publication date if the (a) Filing company made its filing at least 120 calendar days before the statute of limitations expires; and (b) Responding company pleads its defense at least 60 calendar days before the statute of limitations expires. 

    A copy of the denial of coverage letter to the party seeking coverage for the loss or proof of Policy Limits or Liability Deductible/SIR must accompany the inquiry or no action can be taken.
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TRS Feedback – We are listening!

We recently received feedback regarding the arbitrator view in TRS pertaining to supplemental damages. 

The feedback was that it would be helpful for the original submission date to appear in a prominent area with the Feature (in this case, the 2020 Ford). This feedback has been implemented, and our arbitrators can now find the original submission date at the top of the page when viewing the Feature:   
Screenshot of the Feature Decision tab

The original submission date is important information for the arbitrator because Rule 5-3 provides for filing of supplemental damages based on the initial filing date: 
Screenshot of Rule 5-3
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Attention Recovering Parties: Claim or Policy Number Required

Attention PleaseUnfortunately, we continue to see a number of cases in which Recovering parties in TRS do not have a claim number or policy number, and instead, enter content that is not a claim or policy number, such as unknown, none, or 000000.  

As stated in the introductory paragraph of the AF Rules, the filing company must identify certain information, which includes “…claim file number or policy number…” The paragraph also specifies the following: Failure to identify current and correct information may cause a filing to be closed or a decision to be voided. 

If the filing is closed or the decision is voided due to no claim or policy number provided, your time and effort must be duplicated if you wish to continue to pursue a recovery in arbitration. Please ensure you have a claim or policy number before filing to save yourself and others time. Your anticipated cooperation is much appreciated!  

For more information, please see the current AF Rules

Screenshot of the first part of AF rules
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Reference Guide Update: Concurrent Coverage Disputes in Special Arbitration

New UpdateThe Reference Guide to AF’s Agreements and Rules has been updated regarding Rule 2-4 and its applicability to Special Arbitration filings involving concurrent coverage disputes [Article First (b)].

Simply, Special Arbitration’s jurisdiction is limited to disputes involving concurrent coverage/primacy of policies disputes. It was never intended for Special Arbitration to retain jurisdiction over other coverage defenses. For this reason, the last paragraph on page 35 now reads: 

“The last part of Rule 2-4 clarifies the effect of a coverage denial in Special Arbitration. Simply, a coverage denial based on concurrent coverage/primacy of policies (i.e., primary/excess application of the disputed coverage) does not remove the party/case from jurisdiction in Special Arbitration [Article First (b)]. If, however, a responding party pleads no liability policy was in effect, or, denial of coverage for any other reason, Special Arbitration will lack jurisdiction over the party/case.”
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