Building On The Basics

After FSCO’s release of the recommendations surrounding the five-year auto review and before the Minister of Finance releases his decision, industry representatives discuss the positives and pitfalls of recommendation number 35. While there might not be a clear opinion as to whether the recommendation is warranted, there is a definite consensus that further training is always beneficial. This is especially important given the high turnover rate in accident benefits.

Notwithstanding the fact that there is always room for improvement in any industry, there are mixed feelings as to whether or not adjusters are significantly trained and experienced to handle serious injury claims.

As part of the five-year auto review, the Financial Services Commission of Ontario (FSCO) released a report with 39 recommendations intended to improve the effectiveness and administration of Part VI of the Insurance Act and any regulations therein. These recommendations are, in part, a reflection on the comments received by FSCO during the stakeholder consultation process held in the latter part of 2008.

While all the recommendations will affect all facets of the industry as it relates to accident benefits and bodily injury, recommendation number 35 looks directly to insurance adjusters and their ability to manage claims involving serious injuries.

“Insurance claims departments need to better focus on the needs of claimants with serious injuries,” the recommendation reads. “The IBC, Insurance Institute of Ontario and the Ontario Insurance Adjusters Association should work together to train adjusters on the needs of claimants with serious injuries to reduce exposure to potential allegations of unfair and deceptive acts or practices [UDAP].”

The report suggests that the potential lack of training and experience can lead to unnecessary assessments, high rates of benefit denials and delays in assessing benefits.

There is among many in the industry — whether they agree or disagree in whole or in part with the recommendation — a feeling that claimants have not been denied any treatment they required or were entitled to. There is, however, a common concern among many in the industry about the difficulty in keeping staff who are trained in accident benefits or recruiting new staff to the field. Accident benefits is one of the most demanding sectors in terms of people management, recruiting and developing, due to the increased stress and constant changes.

Training is always valuable

But when it comes to further training and education, most agree this is an essential component of staying on top of their game.

Independent adjusters have the experience to handle someone who has been in a crisis, according to John Seyler, president of the Ontario region of the Canadian Independent Adjusters’ Association (CIAA). The nature of the independent adjuster business is such that they are on call 24- 7 as insurance companies are relying on independents to handle client emergencies, he adds. “We absolutely have the skill set to deal with people in traumatic situations,” Seyler notes. “We are quite often the first point of contact; adjusters as a whole — and certainly independents in a significant amount — we are the first point of contact after (the claimant) deals with the emergency responders.”

That said, there is always the opportunity to learn how to deal with situations better, he adds.

Having something in place where adjusters could talk to each other and learn from each other to ensure that the best practices are in place is definitely an asset, Franca Reale, Ontario automobile manager, Cunningham Lindsey Canada, says.

“What we’re administering is a very complex piece of legislation in both the legal sense of the entitlement that are afforded to a person, the timelines to administer it and just the minutia, the detail, you need to do a transaction within the system,” David Owen, director of accident benefits for Ontario, Intact Insurance, says. “We’re talking about people who suffered the most serious injuries that we’ll administer and so you are dealing with the most complex medical cases, as well. So I think that everybody would recognize that there is a need for education.” The legal and medical landscape change, which requires an adjuster to have an understanding and appreciation of where things have changed and how it impacts administration of a policy, Owen adds.

“I don’t think that there is a standardized training like there is in other lines of business,” Lisa Fazzari, claims technical advisor for accident benefits, The Economical Insurance Group, says. “For that level of expertise (required) — when I think of CIP courses, accident benefits gets one chapter in auto — that’s ridiculous when you look at how complex the legislation is.” She adds that having Institute courses specifically on accident benefits would be very beneficial given the complexity of accident benefits.

Laurie Walker, president of the OIAA, notes that while there is definitely training and education in the field and adjusters are well-versed in procedures, there is a lack of medical knowledge, such as terminology and rehabilitation. Adjusters do not always understand the full impact a serious injury has on a claimant’s life and the future care needs required and then subsequently interpreting the data into reserve, payments and consideration of treatment. She notes that back in the days of Bill 164, insurance companies would hire nurses and rehabilitation coordinators who would explain the treatment process surrounding an injury to adjusters. There is now not always an understanding in the type of treatment an injury should receive.

“An adjuster may lack medical knowledge and treatment knowledge of what is standard protocols,” Walker says. “If they had that understanding, there may be a decrease in assessments or examinations that may occur, which is, I think, what the gist of the recommendation really is.”

Training specific to accident benefits would be to everybody’s benefit, Rocco Neglia, vice president of claims, The Economical Insurance Group, says. “Nobody is ever going to argue against training, it’s like apple pie,” he says. “From that standpoint we don’t want to take issue with FSCOs recommendation, we think training is imperative right across all levels of activity, right across the industry.”

It is essential that there be adequate numbers of properly trained adjusters in accident benefits, Steven Del Greco, branch manager of the Toronto West office, Crawford and Company (Canada), Inc., notes.

Available training

And there is certainly a number of places an adjuster can look to expand their training base.

Within the CIP program through the Insurance Institute, students have access to course material that deals specifically with serious injuries resulting from an automobile accident — particularly courses within the claims professional series, Carey-Ann Oestreicher, vice president of business develop with the IIC, says. Additionally, the issue of serious injury under the accident benefits coverage in Ontario is addressed in an AB claims training program offered by the Insurance Institute of Ontario (IIO). The program is offered at two levels: one addresses the needs of the junior claims handler and the other focuses on issues that would be handled by more senior claims personnel, including serious injury. In addition to the CIP courses, information seminars and training is provided by the IIO, which is particularly appropriate when changes are made to regulations or claims-handling techniques, she adds.

Seneca College offers a rehabilitation benefits administration certificate in conjunction with the Institute and most companies encourage ongoing education and offer in-house training or support sending their staff to off-site training seminars.

Educational seminars are frequently put on by the CIAA that discuss issues impacting adjusters, such as chang
es in legislation and handling of claims. The OIAA and the CICMA hold seminars geared towards those in the field, as well.

There remains, however, no formalized education in the province for accident benefits.

Increased costs

But, this has not had an impact on claimants being denied care they are entitled to.

Mike Tolan, director of quality and professional standards, Crawford and Company (Canada), Inc., notes that when he attended the Auto Insurance Summit in early 2008, during the opening comments it was noted that the insurance industry does a good job with serious and catastrophic losses. The issue, for the plaintiff and defense lawyers and health care personnel in attendance, was with the minor whiplash associated disorder claims, he adds.

“I don’t know that there’s been serious repercussions because of (lack of training),” Del Greco says. “I don’t think claims are being denied that shouldn’t. I think there’s too many checks and balances in place.”

Either a senior adjuster, who has a smaller caseload, handles the serious injury claims, or they are sent to head office to an adjuster who specifically handles injuries over a certain dollar figure.

“It is our impression that, in general, the industry has an excellent reputation for its claims handling of serious injury cases,” Barbara Sulzenko-Laurie, vice president of policy with IBC, notes, adding that IBC has not been made aware of any systemic problems in claims handling for claimants with serious injuries.

There has been concern raised, however, in the high costs surrounding assessments.

There is a large cost in assessing whether a claimant is catastrophic or not, Fazzari says. Furthermore, while an insurance company is waiting on assessments to be completed to determine whether the claimant is catastrophic, there are still treatments submitted under the catastrophic realms and they cannot be denied or held until an original verdict is submitted, which means they must be moved on to an insurer examination (IE), Fazzari adds.

According to the IBC for every dollar of treatment, another 70 cents is spent on assessments. But, the legislation mandates that in accident benefits an insurance company must pay for treatment until medical evidence proves that is not required. In order to deny a claim, there must be an assessment done.

There is also concern around the strict timelines that must be adhered to in accident benefits.

“I think the constant changes in the legislation have almost tied our hands as adjusters and, I think, be it at an independent adjuster and at a company level, you’ve got these strict timeframes

to deal with (and) sometimes you feel like you are just paper pushing, just because you have these stringent timeframes to deal with,” Reale says. “The timeframes are shorter and shorter.” “Being able to keep on top of the very stringent timeframes that the legislation brings to us sometimes is very difficult to proactively handle your file,” she adds.

Need for adjusters

To add insult to injury, there is an extremely high burn-out rate in accidents benefits.

“There is, without a doubt, a shortage of good accident benefits people and the industry tends to steal from each other,” Tolan notes. “I would certainly wholeheartedly support if the industry could get together and almost put together a standardized accident benefits training program.”

Accident benefits is probably one of the most technical product to administer because it is extremely onerous, complicated and filled with tight timelines, Tolan adds.

It is a very high pressure job where the adjuster must make sure they are reserving properly, make sure that the adjuster is adjudicating and abiding by the regulations and all of this combined causes a high turnover.

Many insurance companies compensate for the high turnover by bringing in independent adjusters to handle the overflow of claims, Sharon Clark, Ontario chapter president, Canadian Insurance Claims Managers’ Association, says.

To help combat the burn out rates and bring in more adjusters to accident benefits, Reale brings in assistants who, under the direction of senior adjusters, respond to forms. By shadowing the more senior adjusters, and being immersed in the accident benefits field, these assistants are able to work their way up through the channels to senior adjuster. They now have hands-on training in the accident benefits field and are well-versed in accident benefits claims and legislation, Reale notes.

“The key is getting adjusters and keeping them in accident benefits,” Clark says.

Discussing regulation

But does all this validate the implementation of a regulation? It appears there is no straightforward answer to the question, and there does not seem to be much consensus among parties, short of the benefits surrounding further training.

“FSCO’s recommendation number 35 is an extremely weak recommendation that we believe originates in a submission made by the Speech-Language Pathology Association,” Karin Ots, senior vice president, injury and casualty claims, Aviva Canada, says. “We disagree with the recommendation as no evidence has been presented to support it or indicate that claims handling is a problem. Most insurers do a very good job of claims handling but are severely curtailed by the system complexity and the burden of paperwork. In addition, the legislation/regulations are dispute-centric, when they should be claimant-centric.”

For Neglia the problem is whether these recommendations are simply innuendoes or whether there is concrete evidence to show there is a problem. Clark echoes Neglia’s sentiments: Is there an issue and what is it specifically. “I don’t think they have given it a lot of thought,” Clark says.

FSCO has the ability, Neglia says, through its risk-based assessments to determine if there is a gap in the claims handling. “That’s the whole problem with this report,” he says. “It’s just a lot of mishmash and there’s nothing coherent about it, they just threw (recommendation number 35) in there for the hell of it. And there’s probably another 25 recommendations that are probably just as incoherent.”

“There is merit to (additional training), and it should just be left at that,” he adds. “Training is important and company’s should heighten their training, but the last thing we need is more regulations from FSCO around this or anything else.”

From Ots’ point of view there is no need to impose further regulations or accountability on insurers in this area. “Rather, there is a need to impose more accountability on healthcare providers who bill millions of dollars to the system and are unable to demonstrate success in returning claimants to pre-accident status,” she states. “FSCO’s focus should be on healthcare providers and whether there should be criteria for those who treat seriously injured claimants.”

Tolan says he firmly believes in the recommendation that insurers and the insurance industry take an active approach in training as a general statement. “However, I disagree with the proposal that insurers aren’t doing a good job handling serious claims and therefore are exposing themselves to allegations under UDAP,” he adds.

There is a very attractive and expensive accident benefit coverage, a no-fault coverage, which is supposed to have a non-adversarial spirit to it, Tolan says. There is a certain assumption that the insurance company should take everything submitted at face value and never question anything. On the other side, is the insurance company’s responsibility to restrict indemnity to those things that are reasonable and necessary and to be financially responsible, he adds.

The recommendation should not be read as a stand-alone, but rather in context with all the recommendations. It is a layering of several recommendations to remove the complexity and the layering that prevents the ideal of getting to the customer as quickly as possible and resolving the claims as best as we can, Owen
says.

For its part, the OIAA would be delighted if the regulation was mandated and became a piece of legislation, Walker says.

“I think it’s a fabulous idea,” she adds. “It’s the first time the OIAA has been able to kind of start to participate with a legislative body and have some weight to say here, because before, some adjusters would participate in educational seminars, some might not and this is a situation where we can really contribute to our profession.”

“It’s a long-term project if it comes to fruition, but it’s a worthwhile one,” Walker says. “I would like to at least implement some sort of program whether it can be considered an accredited program or something like that.”

Looking Forward

Whether or not the recommendation is ultimately mandated, the OIAA will continue to look at how to ensure adjusters are trained through such means as ongoing seminars, certification programs or education requirements, Tammie Norn, incoming secretary with the OIAA, notes, adding these are just preliminary ideas that have been tossed around.

“We do definitely believe that ongoing education is critical, especially for AB and BI adjusters, because you are dealing with injuries and you are dealing with limits and large amounts of money,” Norn, who is the president of ProFormance Adjusting Solutions, notes. “As an adjuster you need to be well-trained and well-versed about how to handle these funds.”

The CIAA is also committed to furthering adjuster training and education in the field of accidents benefits. While the recommendation notes that the OIAA should work in conjunction with the Insurance Institute and the IBC, the CIAA would like to be involved, as well.

“I think the OIAA is certainly well-suited to do that type of training of adjusters,” Seyler notes. “However, I do think that CIAA has a role to play in it because clearly we focus on the interests and requirements of independent adjusters specifically. So we come at it from somewhat of a different perspective than a generic adjuster. I think we come at it form a more specialized approach and I think between the two organizations we can definitely put together some excellent training that would prepare adjusters to deal with that.”

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Adjuster’s Role In Catastrophic Injury Handling

There are varying degrees of catastrophic injuries and because of this, each claim must be handled based on the uniqueness of the circumstances pertaining to the case.

The adjuster’s job starts immediately upon receipt of the claim. It is crucial to meet with the family immediately as they are undoubtedly going through an extremely difficult time and need reassurance that someone will be there to help guide them through the process. The adjuster must also consider the impact the injury will have on family members. Individual or group counselling is often required to educate the family about the physical injuries and behavioural effects as well as provide coping strategies and techniques on how to deal with the victim and their own emotions.

When faced with a clear catastrophic case, it is imperative a skilled case manager, who has expertise that aligns with the specific injuries being dealt with, be assigned to the file. Ideally the case manager is assigned while the individual is in the acute trauma centre or rehabilitation facility, to monitor rehabilitation outcomes and coordinate discharge planning to ensure a seamless transition back into the individual’s home or new living environment.

A key component of the adjuster’s job is to understand the mechanism of the injury, how it affects function and to ensure the appropriate resources are being utilized in the most cost effective way. Catastrophically injured individuals have access to $1,000,000 in medical and rehabilitation benefits plus $1,000,000 in attendant care benefits. At face value, there appears to be a considerable amount of funds available to help treat these victims. In reality however, when you are dealing with significantly injured individuals who require home modifications, vehicle modifications, attendant care, treatment, medication, equipment and other services for the rest of their lives, you are left with a very aggressive burn rate. Accessing publicly funded services and community resources such as ADP, CCAC and disability benefits through ODSP and CPP will supplement the funding available under the SABS.

It is necessary for the adjuster to have a solid understanding of pre-accident function and how this relates to post accident rehabilitation. Once an adjuster identifies the individual’s future potential it is essential to understand from the treating health practitioners whether or not the individual will be physically or cognitively capable of attaining these goals.

Oftentimes in an effort to maintain a certain quality of life, a catastrophically injured person may be eager to partake in any type of employment. This sometimes poses a problem when dealing with severe brain injured victims. These individuals often have difficulty multi-tasking and tend to display inappropriate behaviour, which makes it difficult to integrate them back into a workplace. In an effort to facilitate rehabilitation, it may be prudent to invest in a job coach with specific expertise who will attend the work place with the individual, help them to stay on task or circumvent inappropriate behaviour. In other cases, volunteer work may be considered.

Many catastrophically injured individuals are not suited to return to the workforce at all. As an alternative measure, rehabilitation efforts should focus on activities the individual can participate in that will provide meaning and give some sort of structure and/or purpose to their lives.

Similar to any injury as recovery occurs and medical and rehabilitation needs need to evolve. By continually being involved with the medical and rehabilitation professionals, listening to the claimant and keeping abreast of their current stage of recovery, the adjuster will be well informed and fully equipped to adjudicate the claim effectively and ensure appropriate allocation of funds. It is important to understand that what may be good for the individual today will most certainly change tomorrow.

At some point, although not usually within the first two years, the claimant’s condition will stabilize and maximum medical improvement will be attained. At this time, it may be practical to consider resolution of the claim by way of structured settlement to ensure the claimant has access to funds for the duration of their life. A future care cost analysis will need to be completed in order to understand what the claimant will require over the course of their life.

A settlement meeting usually takes place with all of the parties involved in the claim: insurer, adjuster, plaintiff counsel, claimant, and may include a public guardian or trustee, case manager and a representative from the structured settlement company.

By effectively handling a catastrophic case, the adjuster can take pride knowing they have worked with the treating health care practitioners to ensure prudent allocation of funds, have lessened the burden on the family by providing superior claim service and support all while protecting the interests of the insurer by successfully managing their indemnity and expenses.

Tammie Norn is the president of ProFormance Adjusting.