Property SIG Conference Sessions
Who Wants to be a Loss Adjuster?
CILA property SIG members began this year’s conference by attempting to second guess the Financial Ombudsman Service in a ‘who wants to be a millionaire?’-style quiz hosted by Luke Exford and Paul Handy.
The association’s largest SIG saw over 100 members in the main conference hall, divided into ten teams to test their knowledge and skill against one another.
“There are various topics and issues which give rise to different interpretations by loss adjusters,” explained Luke about Who wants to be a Loss Adjuster. “The intention was to get the groups to find consensus about what they feel would be the correct response. A number of the questions related to claims which have gone to the FOS. The serious side to this is that on the back of these discussions, the property SIG will look to put together documents or guides for our site in order to formulate a collective response. It doesn’t mean that these are mandates or that they have to be followed. This is hopefully just the start.”
The game got underway with a relatively simple teaser about an uninstalled flat pack conservatory, lost to a flooding incident.
As with the TV game show, Luke and Paul gave members four potential answers with the right answer to be revealed after every team had made their decision known to the room.
In the case of whether the claimant’s buildings insurer, or their contents provider, neither or both should pick up the bill for the flat pack conservatory, Property SIG members all agreed that without referring to the policy wording, it should indeed have been picked up by the contents cover.
This seemed like a rare moment of agreement to what was a contentious debate regarding claims from numerous walks of life.
Further problems were pitched to members often generating many more questions than answers, such as what was the case of Young V Sun Alliance 1976 in relation to? Mercifully, CILA deputy president Graham Burgess was on hand to remind everyone of the need to know when a flood really is a flood or whether in the case of Monty Young, it was simply an underground spring welling up beneath his service garage.
Recent legal developments affecting the insurance industry
Adjusters will have to be aware of an increased focus by regulators and the courts on electronic disclosure in 2009, with computer data under the microscope like never before.
In his speech on recent legal events affecting the insurance industry, Richard Evans, a partner at one of CILA’s sponsors Beachcroft said that while the Civil Procedure Rules were amended back in October 2005 to emphasise the importance of electronic disclosure, the topic is “gaining increased significance.”
Mr Evans told the CILA property SIG audience that the subject was his “hot tip” for 2009 and that policyholders were often ignorant of their obligations.
“I recently visited a policyholder's factory and during our meeting he confirmed on several occasions that he did not have any relevant contractual documents which I was anxious to see in order to advise on a subrogated recovery claim,” said Mr Evans.
“He took out his paper file for the third party and showed me a few scraps of paper. It was only after a number of further questions that it emerged there were many emails on his computer with this client, all relating to the terms upon which the business had been conducted. He seemed genuinely surprised that these emails were viewed by me as important and significant.”
Mr Evans declared that generally speaking, people consider a contract to be a rather stereotypical image such as a ring-bound document. “We need to make our policyholders understand that agreements can be made informally and orally and all that information may be vital,” he said.
From March 2009 UK financial institutions will have to record and store telephone conversations and electronic communications relating to client orders, under new Financial Services Authority regulations. “It is therefore crucial that key electronic documents are obtained from insureds (and insurers) as soon as possible.
“As a starting point, we need to understand what falls within the definition of documents under the CPR,” Mr Evans continued, listing the following points.
• “email and other electronic communications, word processed documents and databases”
• documents “stored on servers and back-up systems and electronic documents that have been deleted”
• “additional information stored and associated with electronic documents known as metadata”. (For example, such information includes who created/edited a document, the date of its creation and revisions and who the recipients were, including of blind copies.)
Meanwhile, he added that on the books for implementation next April is a Technology Questionnaire, where parties to litigation will have to confirm all the IT systems they use so that it can be checked that discloseable documents from those sources have been included in the disclosure process.
“Such electronic documents are most likely to hold a "smoking gun" in fraud cases,” added Mr Evans who pointed out that metadata was used to exactly that end in a case on which Beachcroft acted, Micro Design Group v Norwich Union (2005).
INSURANCE CONTRACT LAW REFORM
Among the other issues to have a significant impact on the insurance sector during 2009, include the ongoing review of insurance contract law, said Mr Evans, who pointed out that the Law Commission will be releasing its summary of responses relating to business insurance reform during October 2008.
“A summary of those responses relating to consumer reform was released at the end of May this year. Due to the continuing level of support for urgent reform, the Law Commission has now advised that draft legislation reforming consumer insurance law is now planned for next summer, 2009. It remains to be seen that whether the original idea of one all encompassing ‘Insurance Bill’ for 2010/2011 will still happen, but throughout the whole process, it has been clear that customer expectation has been the touchstone for the reforms. While I think consumer reforms seem almost inevitable, a wider reform of insurance law affecting businesses is perhaps rather more uncertain at the moment.”
Ralph Savage