Canadian Underwriter
Feature

The Recruiter


January 1, 2004   by Sean van Zyl, Editor


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The job of the claims adjuster is unlike that of any other profession, says Frank Castaldo, president of the Ontario Insurance Adjusters Association (OIAA) for the 2004 term. “We never do the same thing twice, which is really its [the job’s] appeal,” he observes. “Every year adjusters seem to face something new, the field is becoming increasingly complex which definitely means more stress and work, but that’s what makes it interesting.”

Indeed, the claims adjusting profession has experienced rapid change over recent years – some of the influences internal and others external. The most significant “external factor” confronting adjusters at present, Castaldo says, is the new federal privacy legislation under the Personal Information Protection and Electronic Documents Act (PIPEDA), which the insurance industry had to comply with from the beginning of this year. The biggest “internal” concern for the adjusting profession is the dwindling number of new entrants into the field, Castaldo notes. Both issues are high on the OIAA’s agenda in the year ahead, he says, with new entrant recruitment very much a personal passion.

PRIVACY PANIC

Like most insurance professionals, adjusters and claims staff had been preparing for when the federal privacy legislation would kick into effect for the industry, Castaldo observes. In response, the OIAA has adopted a formal “privacy policy” to provide procedural guidance for its members. The association will also add additional privacy training seminars this year to its array of educational courses.

While there remains a great deal of confusion to how the privacy legislation will impact adjusters on a day-to-day basis, and particularly how the government will respond to any unintended violations, Castaldo believes that the hyped concern that developed in advance to the effective date of the new law has been something of a “storm in a teacup”.

There is no question that the privacy legislation will affect the way adjusters go about their work, Castaldo notes, with the more obvious nuisance being that claims handlers will no longer be able to exchange claim-related information directly. “This will mean more leg-work, and more paperwork, as adjusters will have to get an ‘information release’ from the claimant before doing so. But, the regulations don’t change how we perform our work. I think the concern [over the privacy legislation] out there [in the industry] is being driven by the fact that not many adjusters understand the new privacy law. Which is why the association is presenting its privacy seminars. I think things will settle down within six months.”

While the privacy legislation will not be overly disruptive to the procedural aspects of claims adjusting, the law does open an unwelcome door in liability exposure, Castaldo says. The new legislation could provide a tempting opportunity for litigators looking for new ways to get cash settlements from insurers. “It [the privacy legislation] does have to be taken seriously as it is a new exposure in litigation – a way for lawyers to get more,” he notes. However, Castaldo believes that the government will likely adopt a lenient approach with industries having just come under the privacy rules. “Nobody really knows what the impact or penalty will be for any wrongdoing. But, I think the regulator will be fair in dealing with insurers and their service providers while they settle in with the legislation.”

JOB FAIR

“As a profession, we have a problem in that the younger people coming into the insurance industry are not looking at the adjusting field,” observes Castaldo. In order to raise the profile of the profession, the OIAA will host a “job fair” at its claims show to be held in Toronto in February, he says, which will be a “first time event” for the association.

Castaldo is particularly excited with the advent of the job fair, which has involved development with several colleges offering insurance-related programs. “The objective is to invite students to attend the trade show and gain a first-hand experience at what the profession is about.”

Castaldo points out that his involvement with new entrant initiatives is not something new, that in fact he has for several years addressed students at schools to stir interest in claims adjusting. As such, Castaldo says the OIAA is currently working to get its “Without Prejudice/WP” trade journal into college libraries. “I personally have received calls from students, so I think our approach [through the colleges] is producing positive results. This [claims adjusting] is a great career for those with an inquisitive nature. It will appeal to the kind of person that ‘asks questions’, because that is what the job’s all about.”

PROFESSIONALISM

One of the bigger steps taken by the OIAA recently has been a joint initiative with the Canadian Insurance Claims Managers’ Association (CICMA) and the Canadian Independent Adjusters’ Association (CIAA) to develop a professional standard for licensing qualification of claims adjusters, Castaldo says. The three associations have adopted a standard set of questions/knowledge requirements for the grading of adjusters. This “standardization” will not only enhance the professionalism of the adjusting profession overall, but will create a better and more balanced knowledge base between company claims handlers and independent adjusters, he adds. In evaluating the professionalism of Canadian adjusters, Castaldo regards them to be among the best trained and most knowledgeable globally.

EDUCATION DRIVE

The OIAA is also working with CICMA and the CIAA to develop professional education programs. By sharing resources, the associations can better determine the type of ongoing educational programs to accommodate the needs of independent versus company adjusters, Castaldo says.

He points out that company claims staff benefit from inhouse training while independent adjusters rely to a greater extent on the ongoing training/educational programs available through the associations. The “educational role” played by the OIAA is the prime purpose of the association, Castaldo notes. “Our association [OIAA] puts all of its money back into its members, mostly through education. We gear our programs to benefit both independent and company claims adjusters.” The high quality level of the OIAA’s training/educational programs is the prime reason the association’s membership has continued grow despite the tougher market environment, Castaldo says. The OIAA’s membership, which consists of about 60% company claims adjusters and 40% independent adjusters, rose by almost 8% over the past year to approximately 1,700 individuals, he adds.

Two educational offerings the OIAA will introduce through its upcoming trade fair are “dispute resolution/arbitration in settlement of claim losses between insurers” and an entry-level training seminar on “how to deal with aggrieved insureds”. Castaldo chuckles when asked if the subjects of these courses are a reflection of the current grim state of the insurance industry.

While disputes between insurers have not necessarily risen in frequency, Castaldo says there is now definitely a more serious industry attitude in “keeping a sharp eye on the bottom-line”. The tough marketplace has also caused a more brittle attitude by insureds in dealing with insurance companies, he notes, which with claims handlers being at the “forefront” of dealings with the insured public, adjusters have to be trained how to appropriately deal with potential disputes. In this respect, the insurance industry’s public image is very much in the hands of claims adjusters – how they handle potentially explosive situations can play a vital role in shaping future customer relations, he adds.

BUSTING FRAUD

Surprisingly, the current hard market has not resulted in an obvious increase in frequency of fraudulent claims, Castaldo says. With total claims having actually declined over the past year – which Castaldo believes is mostly due to insureds being reluctant to submit minor losses for fear of their premiums rising – adjuste
rs have had more time to investigate each claim report. Improved training in detecting fraud, combined with more time per claim submission, have more than likely been the major deterrents against the rise in fraud claims, Castaldo surmises.

That said, Castaldo notes that adjusters can ill afford to let their guard down on the job. While outright insurance fraud attempts may be showing decline, the type of fraudulent activities being perpetrated are becoming more sophisticated, are better organized, and involve higher monetary stakes. As a result, the OIAA will hold a fraud training seminar in conjunction with the Insurance Bureau of Canada (IBC) at the association’s “Election Night” to be held in April. The objective of the seminar is to bring adjusters up to date on what kind of claim information the insurance industry needs to collate in its battle against fraud, he explains. “Those involved with fraudulent claims are more sophisticated and organized. You have to think like a crook to beat a crook.”

And, while the “average Joe” is less likely to try his luck at submitting an outright fraudulent claim in the current market, insureds that do submit claims are looking to get as much as they can from the situation, Castaldo observes. Adjusters have to therefore remain aware of any number of possibilities they might encounter on any given job. “This, after all, is what makes the job interesting,” he says with a smile.