May 2021 E-Bulletin

This month's E-Bulletin topics include:

  1. Updates to AF’s Arbitration Rules
  2. Decisions Are Final and Binding
  3. System Maintenance, August 2021

Updates to AF’s Arbitration Rules

Image of business people looking at documents with a gavel in the backgroundAF’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 or 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 and 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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Decisions Are Final and Binding

Image of scales on a table topArbitration Forums, Inc. has received positive member feedback as we focus on decision quality. Per the various arbitration Agreements, a decision by an arbitrator is “final and binding without the right to rehearing or appeal.” For this reason, the member needs to be familiar with Rule 4-2 and Rule 3-9.    

Rule 4-2

Pursuant  to  Article  Third,  the  arbitrating  companies  must  notify AF  of  a  clerical  or  jurisdictional  error  via  AF’s  website  within  30  calendar  days  after  the  decision’s publication  date. The determination as to whether an actual error was made is at AF’s sole discretion and is not subject to further review, appeal, or inquiry. AF may also find and correct clerical or jurisdictional errors without notice from the arbitrating companies within 30 calendar days after publication of the decision.

Below are examples of clerical and jurisdictional errors:

Clerical Error – A mistake made by AF staff or the arbitrator(s). Examples of AF staff error include not providing proper notice of filing or not assigning a requested three-person panel.

Correctable Arbitrator Errors
  • Mathematical errors 
  • Switching the parties when recording the liability decision
  • Referencing the lack of evidence that was listed in the filing
  • Applying a state regulation or statute from a state other than the loss state
  • Misapplying an AF Rule or procedure
Jurisdictional Error – Occurs when an arbitrator fails to rule on an Affirmative Defense/Exclusion; asserts an Affirmative Defense/Exclusion was not pled by a party; renders a decision on an issue not in dispute or over which arbitration lacks jurisdiction; or improperly dismisses a case for lack of jurisdiction where jurisdiction exists.

Rule 3-9

When there is a policy limits issue or a coverage of denial that was not raised in the filing, members have 60 days from the date of the published decision to raise and support it. 

A  copy  of  the  denial  of  coverage  letter  to  the  party (insured) seeking  coverage for  the  loss  or  proof  of  policy limits must accompany the inquiry or no action can be taken. 
When  an  award  exceeds  policy  limits,  the  filing  company  will  have  the  option  to  accept  the  policy limits as final settlement and forego recovery of the claim against the insured directly or have the decision voided to pursue alternative means of full recovery.
(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.

When not to submit a Post-Decision Inquiry (PDI):
  • Disagreeing with the decision regarding liability or damages.
  • The arbitrator did not comment on specific evidence.
  • Wanting further explanation. 
  • Disagreeing with a decision based on the belief that the arbitrator misunderstood the facts or misread the evidence.
  • Failing to submit specific evidence or attaching the evidence to the wrong location (i.e., Counter Claim Response section).
  • Failing to raise an exclusion in the filing other than policy limits or denial of coverage.
  • Not raising Prior Payments in the Prior Payment field. Prior Payments not supporting cashed, cleared, or paid at the time of evidence submission/filing.
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System Maintenance, August 2021

Illustration of work on a websiteAF is scheduled to perform system maintenance. As a result, AF's website will be unavailable from 9 PM Eastern on Friday, August 20, 2021, to 5 AM Eastern on Monday, August 23, 2021.

We apologize for any inconvenience this may cause our members. AF is committed to continuously enhancing our products and services. We thank you for your continued support.
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