W000022
Tuesday, November 06, 2001 7:50 AM
Recommendations
I am a Vice President of Claims for an insurance company and have spent 22
years in this field. I have recommendations on the process, and who should
run it.
I recommend that you establish a needs based system for distribution of
funds. The first tier is evaluation of individual economic need, wherein you
establish a victim profile based on mortgage and home costs, an education
cost per child by age assuming a 4 year public institution degree, fixed
health costs including costs for existing illnesses and conditions, and a
general cost of living factor by family. The next tier should be collateral
source, evaluating life insurance recoveries, other insurance recoveries,
existing financial assets and projected future revenue from sale of
businesses or other assets.
After compiling this data, develop a tiered system for categorizing victims,
set a fixed amount per family, use a multiplier based on number of children
and other factors. Then, rather than paying fixed amounts, buy annuities to
ensure stable ongoing income and funds available for future expenses such as
college. This will also maximize each dollar paid.
Finally, set up a catastrophic medical cost fund. This is a separate fund
that will be used to pay for future large unexpected and currently
undiagnosed medical expenses resulting from injury or illness to victims. You
could back this up with the purchase of a health insurance policy.
One last comment. Do not let trial lawyers determine who receives what.
Lawyers interests are in maximizing recoveries for individual clients, in
part to capture the largest fee possible. Although lawyers have agreed not to
take a fee, on an individual basis, conceptually, they have limited ability
to objectively consider the needs of the victims as a whole. Further, there
is a component of self-interest; they are involved to expand their practice,
image and for further client development. This will breed competition among
lawyers, which is not healthy for the process or the victims.
Claims managers such as myself are responsible for determining the value of
claims based on objective criteria, known facts and with no consideration for
anything other than indemnification of the claiming party. The mindset is
different from that of personal injury lawyers. It is process driven, and
ensures equitable distribution across a large group of claimants. Therefore,
I recommend you set up a team of experienced claims managers and
professionals to manage the distribution process.
I would gladly volunteer my available time to participate.
Individual Comment