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NEW YORK-Underwriters and policyholders should establish the foundation for a smooth claims process long before a claim is actually filed, claims experts say.
Expectations of all the parties involved are much more likely to be met if an open dialogue that details the claims-handling procedure is established, said a panel of claims experts.
But, even when a comfortable dialogue is established, the lines of communication should be opened so everyone involved understands the other participants in the claims process, especially when there is an international claim, the panelists said last month at the Professional Liability Underwriting Society's D&O Liability & Insurance Issues Symposium in New York.
An insurer's claims professionals should be involved in far more than just handling claims when they arise, said one of the speakers, Mary Anne Mullin, counsel and claims manager at Zurich-American Insurance Group in New York.
Claims staff should be present at meetings between underwriters and policyholders when coverage is agreed upon, she said.
"This is very important because it gives the carrier the opportunity to explain its claims philosophy," Ms. Mullin said.
Claims staff also should insist on regular meetings with underwriters to help them keep up to date on claims issues, including the claims trends of particular policyholders or products, she said.
"Also, the underwriters can tell us what is going on in the market and what the clients want from us," Ms. Mullin said.
Once a claim is filed, the communication channels must be widened further, said Cathy A. Simon, a partner in law firm Ross, Dixon & Masback L.L.P. in Washington.
In directors and officers liability claims, the claims counsel is retained by the policyholder with the insurer's consent, she said.
"This can cause problems in the handling of a claim, but it is also an opportunity for an insurer to develop some very solid and significant relationships at the outset of a claim which, hopefully, will carry through to the end of the claims-handling process," Ms. Simon said.
As well as coming to an agreement on the selection of counsel, the insurer can meet the counsel and agree on how fees are determined, she said.
Even when fees are not determined, an early meeting can help the insurer and outside counsel understand each other's expectations, Ms. Simon said.
For example, the policyholder's counsel in one claim informed the insurer's claims manager he did not have a billing rate but decided the worth of a case at its conclusion, she said.
"I had to say that my client has a bit of problem with that, so let's talk about it," Ms. Simon said. A billing rate was not determined, but the communication served a purpose. However, "he got an excellent result, and the amount that was actually charged was appropriate because we had established a dialogue and there was trust and confidence," she said.
When a claim involving an international company is filed, there are more barriers to overcome in the pursuit of a smooth claims process, said Kim Hogrefe, vp at Chubb & Son Inc. in Warren, N.J.
U.S. claims staff should be aware of the cultural and legal differences between North America and Europe, Mr. Hogrefe said.
For example, southern European countries often have a codified legal system very different from the case law system of many northern European countries and the United States, he said.
"So, if the policy contains a choice-of-law provision, it presents interesting issues," he said.
Additionally, the pace of decision-making in Europe may frustrate people used to U.S. companies and claims staff, he said.
European brokers also expect to be involved throughout the claims process, he said.