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Member, Beacon International Group, Ltd.
ATLANTA—A new dispute resolution procedure developed by the Assn. of Insurance & Reinsurance Run-Off Cos. is expected to help streamline resolution of disputed claims, according to the association.
The procedure is an expedited form of binding arbitration designed for small and less complicated claims, AIRROC Chief Executive Officer and Director Trish Getty said in a statement. Core elements of the DRP include a single arbitrator, discounted fee structure, and no discovery or hearing testimony without parties’ consent. After the close of evidence, the arbitrator must issue a decision within 30 days, Ms. Getty said.
“The insurance community has not been left unscathed by the present economic crisis and continues to grapple with significant costs associated with the resolution of disputes in the reinsurance arena, where issues surrounding ultimate financial responsibility for insured losses are rampant,” she said. The DRP is intended to provide “an effective and significant cost-reducing mechanism for the resolution of smaller balances that in the aggregate produce a surplus drain having wide-ranging negative market ramification.”
Atlanta-based AIRROC is introducing the new procedure Oct. 19 at its Commutations & Networking Event, to be held in East Brunswick, N.J., following a yearlong analysis by the association’s small claims task force, Ms. Getty said.
Andrea Viera, divisional director of broker replacement services at London-based BMS Intermediaries Ltd., said the procedure will help ceding insurers in recovering claims from their reinsurers.
“All of us are looking forward to getting the benefit of AIRROC’s process. This is another tool that can be used in resolving disputes,” she said. “You can’t have enough tools in the toolbox” when it comes to claims resolution, Ms. Viera said.