CFO Sink Urges Claims Administrator Feinberg to Improve Claims Process
CONTACT: Jerri Franz or Jayme O’Rourke, 850-413-2842
TALLAHASSEE – Florida CFO Alex Sink today sent a letter to Kenneth Feinberg, the independent claims administrator for the new $20 billion escrow account for Gulf oil spill claims from BP, urging him to implement changes that would improve and expedite the claims process for affected Floridians. The recommendations are based on CFO Sink’s role overseeing the Department of Financial Services, which assists consumers with financial and insurance issues, including insurance claims.
“As Floridians began to work with the BP claims process, they turned to my department and our Insurance Consumer Advocate with their questions and frustrations,” said CFO Sink. “After having worked with frustrated small business owners for weeks and utilizing my department’s insurance claims background, I offer the following recommendations on how you can improve, simplify, and expedite the new claims process.”
A copy of the letter follows below:
June 29, 2010
Mr. Kenneth Feinberg
Willard Office Building
1455 Pennsylvania Avenue, NW
Washington, DC 20004-1008
Dear Mr. Feinberg:
I am very encouraged by your appointment as the independent claims administrator for the new escrow account for Gulf oil spill claims from BP. Your reputation and experience in handling claims in difficult situations like this fairly and efficiently is just what we need throughout the Gulf Region to remedy many of the problems facing our small business owners and citizens. I look forward to meeting you and working with you on behalf of the people of Florida.
As a statewide elected member of the Florida Cabinet and Florida’s CFO, I oversee the Department of Financial Services (DFS). One of my key roles is to aid consumers through a transparent and accountable process with financial and insurance issues, including insurance claims. My Consumer Services call center receives more than 25,000 calls a year relating to insurance claims issues.
As Floridians began to work with the BP claims process, they turned to my department and our Insurance Consumer Advocate with their questions and frustrations. After having worked with frustrated small business owners for weeks and utilizing my department’s insurance claims background, I offer the following recommendations on how you can improve, simplify, and expedite the new claims process.
· Prompt timelines must be established for every step in the claims process (reporting, acknowledging, evaluating, denying, deficiency and paying claim, etc…).
· The documentation that is required of individuals and businesses must be consistent and necessary. In speaking with impacted businesses in Florida, the biggest complaint about the BP claims process is the excessive documentation that is required.
· The appeals process must be simple, fast and impartial. Claimants deserve an appeals system that is straight-forward and will not linger on for months. For the appeals process to work smoothly, claimants must be provided specific reasons for any denial. In addition, the claims facility should provide claimants with information as to all their rights once a claim is denied.
· Adjusters must be educated as to the type of businesses that will likely make claims and the various claim types that each business may present. For example, here in Florida, it is apparent that the BP claims adjusters are unfamiliar with the accounting practices of the various affected businesses. Fishermen, bait shop owners, restaurateurs and hoteliers have needs that are specific to their industries. An adjuster can not apply the same standards to a restaurant owner that apply to a commercial fisherman.
· A system for dealing with recurring claims must be established. For example, how will the facility treat a claim by a restaurant owner or charter fishing business whose losses continue to mount each month? Will they have to make a claim with the facility each month? Will the facility cut a check each month based on its own investigation? Will the facility be empowered to give a lump sum payment to the restaurant owner or charter fishing business that will cover all losses up to a prescribed period of time?
· A claims representative must retain all documents related to a claim in a file that is organized so that the information is readable and easy to follow. Moreover, there must be a transparent method for claimants and interested parties to track claims. It would be ideal if a claimant could use an internet-based program to track claims. Claimants should be able to submit their initial and supplemental claims online as well.
Based on my experience, these six items provide a framework for a claims system that will quickly get money into the hands of people who have been affected by the Deepwater Horizon incident. We stand ready and willing to provide any further assistance as you develop claims standards.
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