NATIONAL NEWS ZONE......

Mitratech, a provider of collaborative accountability and legal operations management software, has expanded the scope of its Insurance Claims Litigation Solution Framework.


The framework, based on the TeamConnect platform, has been in use at major insurers for more than 20 years. The new edition includes upgraded capabilities for litigation trend analysis and fraud detection.

TeamConnect's Insurance Claims Litigation Solution Framework is designed to provide claims managers with accurate, real time data on how claims are being litigated across a large claims organization. This practical intelligence about claims enables improved productivity for the claims department, which contributes to an improved expense ratio for the carrier. By helping staff attorneys gain a better understanding of effective claims defense practices, as well as detecting fraud, the framework helps narrow the carrier's loss ratio.

For more information, visit www.mitratech.com.

• Philadelphia Insurance Companies (PHLY) has recently rolled out two new products, Pest Control and Security Services "The Guardian.
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• Pest control eligible classes include operators specializing in residential, commercial, and industrial buildings who have a minimum of four years in the industry and a workforce of less than 50 employees. Security Service eligible classes include armed and unarmed security services, alarm monitoring and installation services, security consultants, armored car services and personal security for executives.

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  To locate the office nearest you or for more information, visit www.phly.com or contact Marisa Thornton at (610) 538-2260.

Class Action Litigation Analyzed in New Report

The fifth Annual Workplace Class Action Litigation Report by Seyfarth Shaw LLP analyzes the foremost class action and collective action decisions of 2008 involving claims against employers in federal and state courts.

The key class action and collective action settlements over the past year are also analyzed, both in terms of gross settlement dollars in private plaintiff and government-initiated lawsuits, as well as injunctive relief provisions in consent decrees. Seyfarth Shaw’s fifth Annual Workplace Class Action Litigation Report analyzes 650 decisions in its comprehensive examination of class action litigation.

The analysis highlights five key trends manifesting themselves in the federal and state courts in 2008:

• First, the financial meltdown of the economy during 2008 fueled more class action litigation.
  • The plaintiffs’ bar increased the pace of ERISA class action filings seeking recovery for 401(k) losses.
  • As lay-offs increased at a precipitous rate, displaced workers filed more age discrimination and Worker Adjustment and Retraining Notification lawsuits.
• Second, job displacements caused by the troubled economy brought further exposure to workplace litigation for employers.
• Third, the volume of wage and hour litigation continues to increase exponentially.
  • Collective actions pursued in federal court under the Fair Labor Standards Act (“FLSA”) outnumbered all other types of private class actions in employment-related cases.
  • The most significant growth in wage and hour litigation centered at the state court level, and especially in California, Florida, Illinois, New Jersey, New York, Massachusetts, Pennsylvania, and Texas.
• Fourth, the Class Action Fairness Act of 2005 (“CAFA”) continued to have significant effects on workplace litigation, primarily wage and hour class actions filed in state court.
• Fifth, the financial stakes in workplace class action litigation increased yet again in 2008.
  • Plaintiffs’ lawyers have continued to push the envelope in crafting damages theories to expand the size of classes and the scope of recoveries.
  • These strategies resulted in a series of massive settlements in nationwide class actions, especially in ERISA class action resolutions.

Lawsuits examined in the report were filed in federal courts under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Fair Labor Standards Act, the Employee Retirement Income Security Act, and a host of other federal statutes applicable to workplace issues. The Report also analyzes class action and collective action rulings involving claims brought against employers in all fifty state court systems, including decisions pertaining to employment laws, wage and hour laws, and breach of employment contract actions. The report also discusses important federal and state court rulings in non-workplace cases which are significant in their impact on the defense of workplace class action litigation.

The report also includes an analysis of the “top 10” class action and collective action settlements during 2008. Plaintiffs’ lawyers secured hefty settlements in 2008 for employment discrimination, wage and hour, and ERISA class actions. The top 10 settlements totaled over $18.184 billion. As compared to 2007, settlement totals decreased for the top 10 employment discrimination and wage and hour class action settlements, but increased for the top ten ERISA class action settlements.

• For employment discrimination class actions, the monetary value of the top ten private plaintiff settlements entered into or paid in 2008 totaled $118.36 million. By comparison, the top ten settlements in 2007 totaled $202.1 million.
• For wage and hour class actions, the monetary value of the top ten private settlements entered into or paid in 2008 totaled $252.7 million. By comparison, the top ten settlements in 2007 totaled $319.3 million.
• For ERISA class actions, the monetary value of top ten private plaintiff settlements entered into or paid in 2008 totaled $17.7 billion. By comparison, the top ten settlements in 2007 totaled $1.818 billion.

Additional trends to note from 2008

• While shareholder and securities class action filings experienced an up-tick in 2008, employment-related class action filings increased significantly. Anecdotally, surveys of corporate counsel confirmed that workplace litigation—and especially class action and multi-plaintiff lawsuits—continues as the chief exposure driving corporate legal budget expenditures.
• The plaintiffs’ bar increasingly used theories to seek certification of “punitive damages”-only classes under Rule 23(b)(2), as well as pressing for certification of mega-classes involving pay and promotion claims of employees in multiple company facilities on a nationwide basis. Outside of the Ninth Circuit, employers fought these theories with good success, as 2008 witnessed many pro-employer victories in class certification battles.

• FLSA collective action litigation increased again in 2008 and far outpaced employment discrimination class action filings. The increase in filings suggests that workers and their attorneys are bypassing the violations-reporting system at the U.S. Department of Labor and bringing private lawsuits in the pursuit of more lucrative resolutions. Given the trickle-down phenomenon of class action settlements (and the increased awareness of wage & hour issues by workers), it is expected that the pursuit of nationwide FLSA collective actions by the plaintiffs’ bar will continue in 2009.

• More than any other area of workplace litigation, ERISA class actions took center stage in 2008 as case filings surged and settlements led all other types of class actions. While the top 10 ERISA class action settlements totaled $1.818 billion in 2007, they increased exponentially in 2008 to $17.7 billion. Plaintiffs’ lawyers bringing ERISA class claims increasingly are pursuing two broad categories of cases, including “stock drop” suits in which the ERISA plan participants complain of the availability of employer stock as an investment option, and “plan administration” suits in which participants challenge excessive advisory fees and other mechanics of how the plan is run.

To request a copy of the 665-page report on CD-ROM, visit www.seyfarth.com/ClassActionReport or e-mail ClassActionReport@seyfarth.com.

Workers' Comp Claim Frequency Drops Again in '07

The decline in claim frequency for workers' compensation injuries has continued into 2007, but the magnitude is much smaller than in the previous two years, according to the National Council on Compensation Insurance (NCCI).

The 2007 drop in claim frequency extends a trend that started in the 1990s. But while claim frequency improved by nearly 7% in each of the previous two years, preliminary results indicate a more modest decline of 2.5% for 2007.

NCCI’s latest review of claim frequency and severity shows that, while claim frequency is down, indemnity and medical severities continue to rise. In the course of updating the annual study to reflect the latest frequency and severity results, a new dimension has been added. Claim frequency changes for permanent total claims, the costliest 1% of lost-time claims, are examined this year.

Key Issues

A key issue facing employers and workers' comp insurers is whether the large declines in claim frequency that began in the 1990s are likely to continue. Virtually every major employment category examined has experienced marked declines. A previous NCCI research report, “An Analysis of Factors Affecting Changes in Manufacturing Incidence Rates” (available on ncci.com) examined factors underlying the long-term decline in frequency since the early 1900s.

Preliminary summary data for Accident Year 2007 reveals continued overall declines in claim frequency and overall increases in indemnity and medical severities.

Key Findings

Key findings of the analysis are:

• Over the last five years, there were significant declines in total lost-time claims frequency for all industries, geographic regions, and employer sizes
• Permanent total claims have increased significantly over the last three years
• The rise in permanent total claims is evident across industries, regions, and payroll sizes
• From 2004 to 2006, the increase in permanent total claims may have increased lost-time indemnity severities by approximately 1.5% per year and lost-time medical severities by approximately 2.5% to 3% per year.

Pet Emergencies a Costly Reality

As the economy squeezes consumer's discretionary income, many pet owners are recalculating their household budgets. The average pet owner typically budgets for pet food and grooming. Some may remember to include routine veterinary expenses such as preventive health checks and vaccinations. However, most assume that their pet's youth or history of good health will equal few if any non-routine medical expenses. The average pet owner may be surprised.

Veterinary Pet Insurance (VPI) recently analyzed its claims data to find the average amount policyholders spent state by state on non-routine veterinary care in 2007. While multiple claims totaling thousands of dollars are not uncommon for pet owners across the country, California's $500 per pet topped the list as the highest average amount spent on non-routine care in 2007. The median amount was a hefty $335 per pet in South Dakota, and even in Mississippi, the state in which pet owners spent the least on medical expenses, the average for non-routine expenses exceeded $200 per pet.

"There are a number of costs to consider when purchasing or adopting a pet, not the least of which is medical care," said Dr. Carol McConnell, vice president and chief veterinary medical officer for VPI. "Pet owners frequently tell us that they don't expect to spend much on veterinary care for their pets beyond preventive health checks and vaccinations. Unfortunately, that's not what our data shows. When an accident or illness does occur, unprepared pet owners sometimes are forced to make difficult decisions: dip into savings, rack up debt, or, in extreme scenarios, euthanize their pet."

The number of claims submitted per pet did not vary significantly by state, indicating that the dollar discrepancies in the amount pet owners spent are due to regional differences in the cost of veterinary care. Treatment prices are influenced by a number of factors including overhead expenses and paying support staff. A veterinarian in California or New York, for example, may charge more than a veterinarian in Mississippi or North Dakota to offset higher property costs and employee salaries.. In general, VPI's data suggests that veterinary medical care costs more in the Northeast and on the West coast and less in the South and Midwest.

According to the American Veterinary Medical Association's 2007 U.S. Pet Ownership and Demographics Sourcebook, total veterinary expenditures for all household pets were estimated to be $24.5 billion in 2006. Aligning with VPI's data, the AVMA also found that the average veterinary expenditure per household for all household pets was $366 in 2006.

Regardless of location, unexpected veterinary bills can quickly drain a pet owner's discretionary income. Toni Pasquariello, of West Haven, Conn., learned this lesson when she lost three cocker spaniels to various illnesses in a span of four years. The emotional and financial toll of caring for her ailing pets inspired her to consider VPI Pet Insurance for her next cocker spaniel, Mickey. She found the policy useful and when she added three toy poodles to the family she decided to insure them as well.

A few months later, Tinkerbell the toy poodle jumped off a recliner and broke her leg. The one-year-old poodle had to have a plate surgically implanted to ensure the bone's proper healing. To Toni's relief most of the surgery expenses were reimbursed by her pet insurance policy. Just two months after breaking the leg, Tinkerbell was startled by a loud noise and leapt unexpectedly from Toni's arms. The small dog landed at the wrong angle and broke her other leg."

My husband said, 'There's no way our insurance company is going to cover two broken legs in one year,'" said Toni. "But sure enough, VPI covered it. Two major surgeries, around $3,000 each, and VPI covered more than half of both surgeries. The reimbursement for only one of those surgeries would have covered a year's worth of premiums for all four of my dogs, so, I definitely think it's worth it to insure my pets."

Property Damage Appraiser Forms Audit Program

Demonstrating its commitment to providing highly personalized service, reduced turnaround time and decreased claim severity averages, Property Damage Appraiser (PDA)—the largest automobile appraisal and inspection service network in the industry—has implemented a rigorous audit program within its franchise operations.

The audit will act as a “checkup” and as a means of implementing strategic direction, allowing PDA to maintain a higher degree of quality control.

“The objective is to use the audit as a tool to spur performance against a series of predetermined measures—as well as call out areas for improvement franchise-by-franchise,” said Rodney Caudill, PDA’s chief operating officer. “Our goal is to create best-in-breed experiences—no matter where you are in the country. Also, aligning and sharing the culture between corporate and franchised locations will build an even stronger organization as we move forward.”

Committed to organizational change, in January 2008 PDA brought Keith Chance aboard as vice president of field operations. Chance has extensive claims management and claims operations restructuring experience. To better assist with the rolling out of new programs and initiatives PDA has also added two additional regional managers to their staff. In conjunction with the addition of field staff, PDA has also launched a new intranet to improve communications with franchisees.

“We want to make sure our franchisees have the tools and guidance they need to be the best in the business,” said Katherine Slate, PDA’s assistant vice president of franchise relations and corporate development. “Our relationships are built on integrity and we’re working hard to create systems that support continuous improvement. There is a reason we were named one of Entrepreneur Magazine’s Franchise 500, Number 1 in Category for six years, and we don’t want to rest on our laurels.”

PDA is a nationwide network of 270 franchise offices and more than 900 auto and property appraisers. For more information, visit www.pdacorporation.com.

MJM Investigations, Matrix Absence Mgt. Partner

MJM Investigations Inc., a global provider in insurance fraud mitigation and claims investigative services, and Matrix Absence Management, a nationwide company that partners with employers to provide customized management of Disability, Workers' Compensation and Family Leave programs, announced the formation of a national partnership, the Matrix Absence Management SIU Program.

The relationship designates MJM as the managing partner for all investigative assignments conducted by Matrix Absence Management throughout the country. The Matrix Absence Management SIU Program will provide consistent nationwide investigations and surveillance, integrated Internet-based technologies, enhanced anti-fraud programs and measurement tools to meet the unique needs of Matrix clients.

The Matrix Absence Management SIU Program has also implemented a technology solution, Matrix SIU CaseTrak. Through CaseTrak, the claims professionals of Matrix Absence Management have the advantage of viewing full-length streaming investigative video, detailed reports, still photographs and more, directly from their desktops. In addition, a detailed and informative Client Management System offers quick and easy access to all of the information concerning assignments.

Hooper Holmes Sells Claims Evaluation Division

Hooper Holmes announced the sale of substantially all of the assets of the company's Claims Evaluation Division (CED), a unit providing independent medical exams primarily for automobile and workers' compensation insurance carriers for use in evaluating claims.

The sale was completed in two transactions for an aggregate purchase price of approximately $5.6 million.

In one transaction, the CED's operations in New York State, known as D&D Associates, Allegiance Health and Medimax, were sold to DDA Management Services LLC. In another transaction, the CED's operations in Michigan, known as the Michigan Evaluation Group, were sold to J&P Michigan Evaluation Group Inc. Both transactions closed on Monday, June 30.

"Divesting the Claims Evaluations Division is a strategic move that will strengthen our balance sheet and enable us to focus on and invest in our core businesses," said Roy Bubbs, president and CEO of Hooper Holmes.

The decision to sell the CED was based on several factors, including the subsidiary's limited ability to significantly contribute to the long-term strategic goals of the company. The company expects to record a net gain of approximately $1.0 million in connection with the transaction.

Dogs Take a Bite Out of One's Insurance

Man’s best friend is sinking its teeth into homeowners insurance costs. Dog bites now account for one-third of all homeowners insurance liability claims, costing $356.2 million in 2007, up 10.5 percent from the previous year, according to the Insurance Information Institute (I.I.I.).

An analysis of homeowners insurance data by the I.I.I. (www.iii.org) found that the average cost of dog bite claims increased by 11.5 percent in 2007 (the most recent figures available) to $24,511. Since 2003, the cost of these claims has risen nearly 28 percent. However, the actual number of claims paid by insurers has remained relatively stable over the past three years at about 14,500.

According to the Centers for Disease Control and Prevention (CDC), more than 4.7 million people are bitten by dogs annually, resulting in an estimated 800,000 injuries that require medical attention. With more than 50 percent of bites occurring on the dog owner’s property, the issue is a major source of concern for insurers.

“While the number of dog bite claims has remained about the same in the last three years, the average cost per claim continues to rise because of increased medical costs as well as the size of settlements, judgments and jury awards which have risen well above inflation in recent years,” said Loretta Worters, vice president of the I.I.I.

Dog Owner Liability

Dog owners are liable for any injuries their pets cause in the following instances: if the owner knew the dog had a tendency to cause that kind of injury; if a state statute makes the owner liable, whether or not the owner knew the dog had a tendency to cause that kind of injury; or if the injury was caused by unreasonable carelessness on the part of the owner.

There are three kinds of law that impose liability on owners:

• Dog-bite statute: The dog owner is automatically liable for any injury or property damage the dog causes, even without provocation.
  
  
• “One-bite” rule: In some states, the owner is not held liable for the first bite the dog inflicts. Once an animal has demonstrated vicious behavior, such as biting or otherwise displaying a "vicious propensity", the owner can be held liable. Some states have moved away from the one-bite rule and hold owners responsible for any injury, regardless of whether the animal has previously bitten someone.
  
  
• Negligence laws: The dog owner is liable if the injury occurred because the dog owner was unreasonably careless (negligent) in controlling the dog.

In most states, dog owners are not liable to trespassers who are injured by a dog. A dog owner who is legally responsible for an injury to a person or property may be responsible for reimbursing the injured person for medical bills, lost wages, pain and suffering and property damage.

“Although some people purchase dogs for the purpose of guarding their homes, deadbolt locks and home security systems are proven burglary deterrents and that will often earn you a discount on your insurance premium,” said Worters.

Simsol Offering New Software Product for Claims

Simsol announced the official release of its new, web-based contents valuation software product, Simsol ContentsClaims.

John Postava, president of Simsol, stated, "We are very proud that after almost three years of product design, development and testing, ContentsClaims(tm) is now available for use by the general adjusting public. The ContentsClaims(tm) personal property claims solution will revolutionize the way adjusters and contents specialists handle personal property losses. Adjusters and policyholders can assist one another by collaborating over the web to inventory their lost or damaged items and quickly determine accurate values based on real-time pricing from our database of over seven million items or from virtually any website in the world.''

Adjusters using ContentClaims(tm) can search more than seven million personal property items catalogued in the software's database. The internal database is updated every 72 hours. Difficult-to-find items may be searched for on the web directly from inside the system, and all web data is captured for use in the final inventory of loss.

"Insurance carriers no longer have to rely on specialized contents valuation services who use proprietary software to produce detailed inventory reports.'' Postava continued, "Now their staff adjusters have a tool to do virtually the same thing without having to go to the added expense of a third party service.''

In addition to offering ContentsClaims(tm) to claims professionals, the company plans to heavily market the product to insurance agents and homeowners who may want to inventory their homes prior to sustaining a loss.

"If a homeowner would take a few hours to photograph and inventory his or her home prior to a fire or some other type of catastrophe,'' said Postava, "the system can automatically produce a full personal property estimate for the adjuster and the homeowner. Prices for many of the items are automatically updated for the homeowner, and any missing values can be researched by the adjuster using the advanced search tools in the product. Homeowners are assured the most up-to-date pricing for the valuables, and adjusters are no longer burdened with spending hours confirming prices.''

Planned future enhancements will allow the inventory generated by the software to be imported into the company's structural estimating and claim documentation software product, Simsol for Adjusters(tm) in order to provide insurance carriers with a single, unified property loss report.

To learn more about Simsol ContentsClaims(tm) or any of the other products offered by the company, contact Bob Djordjevic, Simsol's national sales representative, at 1-800-447-4676 x328.

Simsol Unveils Product for Flood Claims Adjusters

Simsol has completed the interface between its flood claim damage estimating product, Simsol for Adjusters and the claims processing software of the EDS Write-Your-Own Flood Services unit, a provider of flood insurance services to insurance carriers participating in the National Flood Insurance Program's (NFIP) Write-Your-Own (WYO) program.

The interface now enables Simsol-equipped adjusters to electronically upload all of the NFIP required flood forms, reports and XML data directly into the web services of EDS.

John Postava, president of Simsol, stated, "We are very excited about the new connection between our estimating and loss documentation solution and the EDS flood claim Web site. This connection allows adjusters to directly upload vital flood claim data to EDS. The connection will reduce the turnaround time in the handling of flood claims as well as expediting payments to flood claim victims.''

For further information, visit www.simsol.com.

Chubb Captures '08 Claims Management Quality Award

The Chubb Group of Insurance Companies has received a 2008 Claims Management Quality Award from Greenwich Associates, an international research-based consulting firm in institutional financial services.

The award is based on a study of 714 risk managers that concluded that an insurance company's claim management process is a significant determinant of customer satisfaction and loyalty.

Member insurers of the Chubb Group of Insurance Companies form a multi-billion dollar organization providing property and casualty insurance for personal and commercial customers through 8,500 independent agents and brokers worldwide. Chubb's global network includes branches and affiliates throughout North America, Europe, Latin America, Asia and Australia.

Ohio Reports Top Insurance Complaints

Claim denials from insurance companies were the number one complaint of Ohio insurance consumers in 2007, according to statistics released by the Ohio Department of Insurance. Nearly one-third of the 7,140 consumer complaints received by the Department dealt with the denial of claims by insurance companies. There were 312 more consumer complaints filed in 2007, up from 6,828 complaints in 2006. As a result of complaint reviews, the Department saved Ohio consumers more than $10.7 million in 2007. A closed complaint is a complaint that has been reviewed and resolved to the satisfaction of the state or jurisdiction in which it is filed.

Claims Delays Tops Complaint List

Important, but sometimes difficult, filing a claim can be one of the most frustrating processes during a crisis or following a major disaster. A delay in the claims process was the No. 1 complaint of insurance consumers in 2007, according to the National Association of Insurance Commissioners (NAIC).

To help you avoid problems getting your claims paid, NAIC offers these tips:

Know Your Policy
Understand what your policy says. The policy is a contract between you and your insurance company. Know what’s covered, what’s excluded and what the deductibles are.

File Claims as Soon as Possible
Don’t let the bills or receipts pile up. Call your agent or your company’s claims hotline as soon as possible. Your policy may require you to make the notification within a time frame.

Provide Complete, Correct Information
Be certain to give your insurance company all the information it needs. Incorrect or incomplete information will only cause a delay in processing your claim.

Keep Copies of all Correspondence
Whenever you communicate with your insurance company, be sure to keep copies and records of all correspondence. Write down information about your telephone and in-person contacts, including the date, name and title of the person you spoke to and what was said. Also, keep a record of your time and expenses.

Ask Questions
If there is a disagreement about the claim settlement, ask the company for the specific language in the policy that is in the question. Find out if the disagreement is because you and the insurance company interpret your policy differently. If this disagreement results in a claim denial, make sure you obtain a written letter explaining the reason for the denial and the specific policy language under which the claim is being denied.

Don’t Rush into a Settlement
If the first offer made by an insurance company does not meet your expectations, be prepared to negotiate to get a fair settlement. If you have any questions regarding the fairness of your settlement, seek professional advice.

Auto and Homeowners Claims
Auto and homeowners policies might require you to make temporary repairs to protect your property from further damage. Your policy should cover the cost of these temporary repairs, so keep all receipts. Also, maintain any damaged personal property for the adjuster to inspect. If possible, take photographs or video of the damage before making temporary repairs.

Other Tips for Filing Auto or Homeowners Claims:

• Don’t make permanent repairs. An insurance company may deny a claim if you make permanent repairs before the damage is inspected.
• If possible, determine what it will cost to repair your property before you meet with the claims adjuster.
• Provide the claims adjuster with records of any improvements you made to your property.
• Ask the claims adjuster for an itemized explanation of the claim settlement offer.

Accident and Health Claims
Ask your physician to provide your insurance company with details about your treatment, medical conditions and prognosis.

If you suspect a provider is overcharging, ask the insurance company to audit the bill and verify whether the provider used the proper billing procedure.