By Tom Hagy
January 14, 2011 – When it comes to managing claims in complex litigation it is critical for insurance carriers to have written case assessment protocols and up-to-date litigation budgets to ensure sufficient reserves are in place, according to 20-year insurance industry claims veteran Paul A. Amirata. President and CEO of his newly founded claims service and former insurance company vice president, Amirata will join other speakers with deep experience in litigation assessment and management during the complimentary LexisNexis webinar titled “Early Case Assessment & Resolution for In-House Counsel & Outside Law Firms.” To register for the free program go to www.eventsvc.com/litigation/. I spoke to Paul this week to get a preview of insights he will share. Read on to see what he had to say, speaking from the vantage point of an insurance carrier.
Q: So, written protocols for assessing cases. Are they a good thing?
A: Yes; absolutely. Not only are they a good thing, but from the viewpoint of a carrier, they are essential. It’s critical that case assessments are memorialized, completed timely, updated and placed in the claims file. The old adage is, if it’s not in the file it never happened. It is also important to ensure that when someone else reviews the file he or she is able to know the claim status.
Q: What makes a winning protocol?
A: Let’s take the example of a third party liability casualty claim in litigation where defense counsel has been assigned. There is certain information carriers expect to receive from them. Such information includes an assessment of insured’s liability and damages, and an action plan for future handling. We also request periodic litigation budgets to assist in our case evaluation and reserving. We don’t want a “cradle to grave” budget from the onset; rather we prefer it be updated periodically as litigation activity dictates.
Q: Why are budgets so critical?
A: Carriers are under enormous pressure to make sure they reserve timely and accurately. And all of these written protocol assessments that I am mentioning enable the carrier to more accurately establish reserves.
Q: Does a written protocol serve as a mechanism for litigation management down the line?
A: It certainly does. Not only is it a mechanism for litigation management down the line, but for litigation management throughout the duration of the claim.
Q: Are there hidden or less-obvious benefits of a protocol?
A: Insurers do not like surprises and the protocols we are talking about are essential to minimize these surprises. Claim managers are not amused when they have a claim with significant exposure that still contains a nominal statutory reserve.
Q: At what point in the protocol to you bring in outside counsel?
A: Assuming again that we are dealing with a third party liability claim and a covered loss, we assign counsel almost immediately after receiving the complaint to represent the interests of our insured. If however, we have a claim that is not in yet suit we typically try to resolve the claim directly thereby reducing litigation costs.
Paul A. Amirata has nearly 20 years of experience in the insurance industry and private litigation practice. He is the president and chief operating officer of Amirata Claims Consulting, LLC (“ACC”), a recently established insurance claims service firm. ACC provides complete insurance business processing and consulting on all types of risks and exposures. He is former Vice President of Claims for AXA Insurance Company in New York where he oversaw all of AXA Corporate Solutions domestic claims, the majority being property and casualty. Previously, he was an Assistant Vice President of RiverStone Claims Management LLC in Manchester, N.H. for more than seven years. His responsibilities included overseeing the Additional Insured and Project division in the Construction Defect department and serving as the company’s corporate deponent. Paul is well respected in the industry and routinely gets asked to speak at conferences and seminars and was recently quoted in The Wall Street Journal.