N.Y. To Insurers: Stop Arbitration Dillydally

By Daniel Hays

NU Online News Service, Jan. 2, 3:52 p.m. EST?New York State has given insurers a Jan. 21 deadline to come up with individual action plans for cutting delays they create in the processing of auto injury claims sent to arbitration.

In taking the action, the department noted a swelling backlog, including the fact that "several insurers have thousands of cases pending in the No-Fault arbitration system."

The department said it noted that "many insurers frustrate the purpose of the streamlined No-Fault system by making little effort to resolve claims at the conciliation phase of the arbitration process and then agreeing to consent awards after the case is transmitted to arbitration."

Insurers were put on notice in a circular letter released Monday by Insurance Superintendent Gregory V. Serio, in which carriers were asked to submit a plan detailing the manner in which they will respond to their "pending caseload in both conciliation and arbitration."

The letter called on all insurers and self-insureds to designate an individual responsible to coordinate their company's no-fault arbitration program with the insurance department and the American Arbitration Association.

According to the letter, from the department's deputy chief of property bureau, Janet E. Glover, the requested plan must include measures to respond to both conciliation efforts and to arbitration proceedings.

The letter said insurers should make it their goal to respond effectively to the AAA Conciliation Center.

It also asked carriers to review cases sent for arbitration to resolve the ones that do not require a hearing, and to present an effective defense in those cases that require an arbitration proceeding.

The department letter said the backlog of cases had surged because of a "dramatic increase" in filings by healthcare providers, and it recognized that there were abuses of the system by both healthcare providers and their attorneys.

Among other initiatives, the letter said regulations had been changed to permit arbitrators to slap administration costs on applicants who file frivolous or totally meritless requests for arbitration.

Arbitrators, the department said, will be asked to refer cases involving fraud. Mr. Serio said the arbitration action would complement other proposals he has made for measures to combat auto injury fraud.

The department said it will add up to 50 new arbitrators, allow consolidation of cases arising from the same event and litigants, and require earlier submission of forms and supporting evidence.

A representative for the department, Joanna Rose, said figures on the size of the backlog were not immediately at hand, but promised to provide them.

According to the circular letter, more than two-thirds of the cases scheduled for hearings before arbitrators result in consent awards or withdrawal of the arbitration request.

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N.Y. To Insurers: Stop Arbitration Dillydally

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