CIECA SUBROGATION

BUSINESS PLAN

 SAB Approved 12/14/2006

 

 

Interested Parties and Participants

• Allstate Insurance Company

• Arbitration Forums

• ASC X12 (DISA, the secretariat)

• Farmers

• GEFEG

• Hartford

• Nationwide

• NSite Solutions

• State Farm Mutual  Automobile Insurance Company

• Trumbull Services

 

Note:  Membership is open to any company who is a member of CIECA or X12, as we have reciprocal membership agreements in place.

 

Pilot Companies

Pilot companies:  To be determined.

 

Process Flow: Electronic Subrogation Business Cases

 

The below work contains business case work flows that depict general business work flows.  These business flow examples depict the exchange of business messages to complete the subrogation effort.  Each company will have their own version of these business flows, and may have additional varying business cases as well.  The intent here is to meet the needs of all parties and all variations for your individual business flows in the use of these business messages.  All variations are not being presented here, our intended target was to follow the 80/20 rule.

 

NOTE:  The variations may create the need to develop an additional message(s) that can be developed upon request with your help and participation.

 

 

The parties below are presented here to identify their role. 

 

 

 

1. Arbitration Business Case- Responsible party is another carrier

 

      The carrier sends a demand to the responsible party, which is also a carrier.  The carrier receives a negative or non-response from the responsible party.  The carrier sends an arbitration filing to the subrogation vendor and the responsible party.  The responsible party sends an arbitration response to both the carrier and the arbitration vendor.  The arbitration vendor renders a decision.  The decision is sent to both the carrier and the responsible party.

 

Variations:  Multiple demands can be made from the carrier to the responsible party. 

 

 

2. Vendor Assignment- Collection Agency

 

      The carrier sends a demand to the responsible party.  The responsible party sends a negative or non-response to the carrier.  The carrier sends a subrogation assignment to a subrogation vendor, the collection agency.  The subrogation vendor sends a demand to the responsible party.  The responsible party sends a demand response back to the subrogation vendor, which could be a non-response.  The subrogation vendor sends a status update to the carrier.  The subrogation vendor sends subsequent demands to the responsible party and subsequent statuses or updates to the carrier.  Requests for status can be made by the carrier to the subrogation vendor at any step in the process.  The responsible party remits to the subrogation vendor, who then initiates a closing.  Carrier receives remittance from the subrogation vendor and closes.

 

 

 

3. Assignment to Multiple Subrogation Vendors, Collection Agency and Attorney

 

      A carrier sends a subrogation assignment to a subrogation vendor, such as a collection agency.  The subrogation vendor sends a demand to the responsible party.  The subrogation vendor receives either a negative or non-response from the responsible party.  The subrogation vendor then sends a response to close without recovery to the carrier.  The carrier sends an updated subrogation assignment to another subrogation vendor, such as an attorney.  The attorney makes a demand to the responsible party.  If the responsible party has a negative or non-response, the attorney will litigate.  At any point, the attorney can send a request for more information.  Also, at any point, the carrier can send a request for status to the attorney.  When litigation has been completed, a judgment is rendered.  The responsible party remits to the subrogation vendor, who then initiates a closing.  Carrier receives remittance from subrogation vendor and closes.  If the judgment is unsuccessful, there will be no remittance.

 

Variations:  The subrogation vendor, the lawyer, may or may not litigate.

 

 

 

4. Property Loss with Investigative Assignment and Subrogation Assignment

 

      A carrier sends an investigative assignment to an investigative vendor, such as a cause and origin expert.  The investigative vendor sends a response to the carrier.  The carrier then sends an updated assignment to a subrogation vendor, such as an attorney.  The attorney sends a demand to the responsible party.  The responsible party remits to the subrogation vendor, who then initiates a closing.  Carrier receives remittance from the subrogation vendor and closes.

 

NOTE:  Interactions between the lawyer and the responsible party will be business communication of letters, phone calls, e-mails, etc. to reach the final resolve.  Once the final resolve is agreed, the response is then sent from the responsible party to the subrogation vendor.

 

 

 

5. Business Case –  Simple Demand and Response

 

Carrier sends demand to Responsible Party, for example another carrier or a product manufacturer.  The Responsible Party responds by acknowledging liability or requesting additional information.  Carrier responds to Responsible Party with any additional information and again demands payment.  Responsible Party remits payment to Carrier.

 

 

 

 

 

Generic Messages.  Status messages, including any updates, and Requests for Information messages can be sent at any point in the process. 

 

 

Agreements Reached by the Committee

 

Subrogation Information for Investigation and Claim Settlement:

• The project team will direct efforts for development of Subrogation messages from first notice of loss through claim settlement and subrogation recovery.

• A phased approach is going to be used for the message development.

• The format will support multiple insurance lines.

• The Assignment of auto claims will be the first focus of the committee, potentially adding Assignment development to other lines as a second phase or concurrently with the auto assignment.

• The data model / process flow will support the flow of information between all industry segments affected.

 

Issues to be addressed by the Committee’s Work

 

Application Issues:

·        Confidentiality is a factor in implementing the subrogation process.  The format needs to be able to support this consideration.

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Non-Application Related Issues:

·        Will additional code lists need to be built?

·        Will new fields need to be developed?

 

Deliverables

The XML message deliverables are:

·        Data exchange messages for electronically aiding the resolution of subrogation claims.

·        The project will include messages to support the business flows above.

·        The first deliverable will be the XML message from the CIECA BMS (Business Message Specification) along with the Code Lists and XML schema for the subrogation assignment.

·        Second deliverable will be the XML implementation guide for this message

·        Subsequent deliverables will be determined by the group at a later time.

 

Note:  The new Schema will be a product of the Architecture Committee, and generated from the BMS changes approved by the Subrogation Committee.

 

Benefits to Industry Segments

The following is a list of possible industry benefits:

• Establish accurate and efficient messages for subrogation claim resolution. 
• Allows for control and variations in the steps and processes followed to reach claim resolution.
• Reducing cycle time by decreasing the number of days needed to settle the subrogation claim.
• Increased access to accurate information in exchanges and subsequent exchanges.
• This will enable insurers to gain a much better understanding and management of their subrogation process.

 

Risk or Barrier Assessment

An industry cross segment shall be brought together to commit to developing the messages for subrogation claims.  The first task will be to agree upon and complete the work flow in the subrogation claims process.  One of the risks is that a limited number of participants may reduce the wide spread implementation and that the message might not meet everyone’s needs. 

 

There are privacy issues that will need to be considered that may increase the complexity of the messages and their implementations.

 

Resource Requirements

Money:

Rooms needed for face-to-face meetings will be needed in the event volunteers are not able to host meetings.  All support for web services (posting of meeting schedules, minutes, etc.), teleconference services and CIECA membership tools are included with CIECA membership.

Staff: 

Staff time for project support is included with CIECA membership for approved projects.  Staff time will include project management assistance as well as technical assistance.

 

Volunteer Time:

Business volunteers will be needed to identify business requirements of the message contents.  Representation from multiple areas of the business segment will make the message development more complete and better serve the entire industry.  Business volunteers will also be needed for the development of the Implementation Guides.

 

Technical volunteers will be needed to complete the translation of business needs to the BMS representation of those business needs and work with Architecture in this integration.  Assistance will be made available from members of Architecture.

 

 

Other Items

Is this project included in the CIECA Strategic Plan?    

·        Yes.

Is this a new development project or a maintenance/enhancement project?

·        New.

What will be the anticipated impact on other CIECA efforts or standards? 

·        The Architecture resources will be needed to assist in understanding the BMS and completing the integration into the BMS.

·        The Subrogation will need technical support to become familiar with the BMS and schema

to take this activity as part of this committee, these items can help identify areas of need.

·        The Subrogation team is composed of both business representatives and technical representatives who appear to have the expertise to complete most, if not all, of the components in the initial project.  More resources may be needed to develop some messages.