Canadian Underwriter

Rock and a Hard Place

March 1, 2016   by The CIP Society Insurance Institute of Canada

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The CIP Society Ethics Series

A timid claimant – having been in a recent car accident and currently undergoing rehabilitation – shows up at an adjuster’s office unannounced because she wants to make sure she understands her coverage and prefers not to speak on the phone or leave voice messages. The adjuster, who was assigned to the file, happens to be in the office and agrees to meet with the claimant.

A second adjuster sitting within earshot can hear the two while they discuss the claim. The claimant nervously explains the circumstances surrounding the accident and, thus, the reason for the claim.

During the conversation, the first adjuster is impatient, trying several times to rush the claimant and end the conversation. His approach is assertive and matter-of-fact about the limitations of coverage.

The claimant had hoped to appeal to the adjuster to help cover the health care costs of her lengthy recovery. The claimant tries many times during the meeting to argue her case, hoping there is room for negotiation.

Apparently not. She accepts the adjuster’s offer, feeling that she has no choice but to do so.

Having overhead the conversation, the second adjuster knows recent changes to Ontario’s Statutory Accident Benefits Schedule (SABS) and the adjusting firm’s own policies mean settlement ranges have been allotted in similar cases and, at the discretion of the adjuster, a fair settlement within or to the maximum of the range can be provided.

He wonders why the first adjuster is holding so firmly to the base of the range, when latitude could be fairly provided under the circumstances. It is clear to the second adjuster that the claimant felt powerless to negotiate on her own behalf.

What motives would the first adjuster have for being so aggressively steadfast and refuse to pay anything more than the minimum amount on the claim? Should the second adjuster raise the issue with his colleague and/or bring this situation to anyone’s attention? What would their employer think about this particular transaction?

Ron Bouwmeister, FCIP
Vice President, Claims
The Commonwell Mutual Insurance Group

There are many reasons an adjuster may take a harder line on the adjudication of a claim. In this particular case, it appears the adjuster is working for an adjusting firm, and in these situations, the independent adjuster is often handling files for more than one carrier.

In the case of SABS claims, some adjusters are open to negotiation and others prefer to stick to the legislation, paying only the expenses owed and not making allowances for potential increased exposure down the road.

Adjusters cannot settle SABS claims within the first year of the claim, which may be the motive behind the adjuster’s tougher position with the client, or perhaps he has communicated this earlier and was not pleased about the client showing up unannounced.

It is not a requirement to consult with other adjusters in the office unless otherwise directed, but it is considered good practice to do so; servicing the client should be a top priority. The adjuster was not necessarily unethical, but certainly did not demonstrate empathy, and there is a big difference between the two.

With respect to the adjuster overhearing the conversation, it is important for any company to work as a team to serve clients, insureds and the organization. The second adjuster has an obligation to have a conversation with his colleague to ensure they are clear on the company’s policies regarding settlement and updates in legislation.

Additionally, raising the customer service observation to a co-worker would be of service to the individual since that person may not be self-aware of how he or she is coming across to clients.

The employer would not be particularly pleased by the customer service handling, as it is a reflection of the company. If the second adjuster raised the issue with a co-worker, the employer would be pleased that staff is taking the initiative to ensure fair adjudication of claims as a current practice.

Just because there is legislation to rely on it does not prevent or restrict adjusters from treating customers with empathy.

Michelle Baumann, CIP
Accident Benefits Specialist
Oatley Vigmond

Insurance companies have a responsibility to act in good faith in all dealings with insured persons. Despite this, adjusters do sometimes lose sight of the need to be fair and honest in their interactions with claimants.

Adjusters must ensure that claimants are well-informed about coverages and must assist claimants in the claims process. In these situations – the adjuster has the knowledge and the claimant is typically uniformed – the claimant is literally at the adjuster’s mercy during the claim experience.

Most adjusters do not intend to be unkind or unreasonable. Adjusters are busy; there is a constant flow of new claims, phone calls, paperwork, meetings and more. These pressures may present as impatient or uncaring.

Further, with the monotony of minor claims, adjusters may slip into a routine of dismissing these claims as minor or, worse yet, fraudulent. This, however, is unacceptable.

Adjusters must remain attentive for claims that appear minor, but, in fact, are not. Minor traumatic brain injuries are an excellent example, and adjusters must be willing to listen to claimant concerns, read the pertinent reporting, arrange examinations as warranted, and give genuine consideration to every claim.

In this situation, the adjuster was unethical. If he believed he was unable to increase the limits of coverage, but the claimant continued to push, he could have consulted with management to confirm the determination. Otherwise, the adjuster should have ensured the claimant understood her rights to dispute the determination.

As for the adjuster overhearing the exchange, this individual should have provided peer coaching afterward. If the secondary adjuster felt that the handling adjuster erred significantly, then he should have reported his concern to management.

The employer should be concerned about the lack of professionalism and the display of bad faith by the handling adjuster. Insurers should attend to the professionalism of their staff to ensure that interactions are fair, respectful and compassionate.

Adjusters who act inappropriately in their claims handling should be directed to develop their customer service skills and technical abilities, or otherwise receive disciplinary action.

Pam Pabla, CP Dipl., CIP
Accidents Benefits Claims Advisor
Desjardins General Insurance Group

Adjusters are trained and expected to maintain ethical conduct in all interactions, encourage an equitable resolution and leave lasting and positive impressions with the client. As a first contact advisor, it is important to set the quality of service expectations to encourage open dialogue and trust moving forward.

In this scenario, the adjuster’s conduct was unfair. The adjuster had an opportunity to understand the emotional process the client was experiencing, show empathy and adopt the appropriate behaviours to ensure a successful client interaction.

While there may be a few reasonable motives for the adjuster to behave in such a manner (including an attempt to minimize the claim cost and/or manage the file from a purely monetary perspective), it was unfair from the perspective of the client and the insurer.

The adjuster could have discussed the file with a higher authority or senior colleagues for input, or accessed other available resources. The actions of the adjuster may be viewed as unethical as he did not take time to address the client’s concerns or show empathy.

The adjuster should have provided the client with further explanation regarding any additional necessary information.

In regards to the adjuster who overheard the conversation, this individual should have talked to his colleague directly, and offered the opportunity to provide his colleague with insight and understanding of the client’s needs.

The employer would not be pleased with the attitude, passiveness and judgment of both personnel involved.

The organization would likely recommend more training on client experience to help develop both participants’ customer service skills through coaching and active listening, and improving communication skills.

Adjusters should follow a collaborative approach that is friendly and shows a willingness to negotiate and appreciate the client’s challenges and inconveniences, as well as their vulnerability in certain circumstances. Commitment to a support plan shows sincerity, respect and professionalism, while moving the client towards active participation in his or her health plan outcome.

Greg Smith, MBA, FCIP, CRM
Senior Vice President, Administration
Crawford & Company (Canada) Inc.

Representatives who are entrusted to act on behalf of the insurer have a legal and ethical obligation to act fairly, professionally and with empathy when adjusting a claim.

Adjusters help policyholders with queries every day, and in the majority of cases, they do an excellent job delivering on the insurance carrier’s promise to pay during these moments of truth. Unfortunately, this scenario highlights several behaviours and actions that companies strive to prevent through education, training, coaching, and quality and audit.

It is clear that the insurance carrier and adjusting firm have policies and procedures in place to ensure appropriate settlements are achieved – the description of settlement ranges that can be used at the discretion of the adjuster shows they understand that each claim is different and allows adjusters to apply their professional judgment to work within those ranges.

The adjuster’s motivation for trying to achieve a settlement at the low end of the range might be driven by a lack of understanding of the insured’s injuries or rehabilitation requirements and/or the coverages afforded under the insurance policy in place. Regardless of the reason, it is unfair.

The adjuster should have consulted with a manager or supervisor to find the most positive outcome possible – even if the financial limits of a settlement are exhausted, there is knowledge and expertise that can be applied to help maximize how those benefits are utilized.

Clearly, the adjuster’s colleague is familiar with the company’s claims-handling philosophy and guidelines, and does not see them being followed. The colleague should speak up immediately and address the situation with the supervisor so that the claim can be reviewed and the adjuster’s behaviour corrected.

There are also some privacy issues to address with the initial adjuster conducting a meeting in an area that could be overheard by colleagues.

A supervisor or a manager needs to be aware of these issues so they can be corrected promptly. If the secondary adjuster is not comfortable speaking up, most companies have options for reporting unethical behaviour anonymously and confidentially.


Adjusters work in fast-paced environments and are regularly required to juggle multiple tasks. However, as one of the first points of customer contact, adjusters must maintain a professional demeanour by listening, showing empathy and ensuring clients feel at ease.

While these attributes are not necessarily ethical codes of conduct in the insurance industry, they do display customer service that is required to create lasting relationships with clients.

That being said, there are a few unethical actions occurring. The primary adjuster working with the client had an ethical obligation to bring this situation to the attention of the supervisor or manager – the client has the right to a second opinion.

The second unethical action was with the adjuster overhearing the conversation; it is unethical for an employee to overhear an unethical situation and not take further action. The second adjuster could have spoken to his co-worker or he could have openly or anonymously reported the situation to the employer.

Had either adjuster taken this situation to a higher level of management, the claimant may have left with more peace of mind regarding her case, and both adjusters may have received further customer service and new legislation training for better customer relations going forward.

The CIP Society represents more than 17,000 graduates of the Insurance Institute of Canada’s Fellow Chartered Insurance Professional (FCIP) and Chartered Insurance Professional (CIP) Programs. The CIP Society, through articles such as this, is working to bring ethical issues to the forefront and provide learning opportunities that enhance the professional ethics of all insurance professionals.

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