The official in charge of the private entity which manages New York's insolvent insurers said the operation will slash costs by dropping two third-party administrators and performing their work in-house.
Mark G. Peters, Special Deputy Superintendent in charge of the New York Liquidation Bureau, said by nonrenewing contracts with World Wide Claims Management Services Inc. and Risk Enterprise Management Limited, the NYLB will cut its annual outlay for outside vendors "by over $400,000."
Mr. Peters' statement stressed that the move was a cost decision and not related to unsatisfactory performance by either firm.
"The termination of these contracts is part of a wide-scale plan to reduce the bureau's dependence on costly outside consultants and allow the NYLB to operate in a more economical and efficient manner," he said.
The NYLB contracts with TPAs to process property and casualty and workers' compensation insurance claims. The contracts with the two vendors will expire Monday.
It was explained that the property and casualty claims the two vendors handled will be brought in-house and be processed by existing NYLB claims staff.
The NYLB said it recently evaluated its current contracts with TPAs and the capabilities of its in-house staff and determined that property-casualty claims could successfully be processed in-house, without incurring any additional expenses.
Dropping the TPAs is the latest in a series of moves to revamp the bureau since Mr. Peters took over this year. In addition to personnel changes, NYLB said it is now being proactive and going after longstanding balances owed by reinsurers and "no longer waiting passively to collect."
The New York Liquidation Bureau is a nongovernmental entity, which carries out the responsibilities of the New York State Superintendent of Insurance in his role as receiver. It is funded by the assets of the 61 estates the NYLB controls and the various security funds.
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