CLAIMS PANEL

Wednesday, October 8th

, 2013

8:30am – 10:30am

RICK CURRYIAM Governing Member at Large

President, Gateways International, Inc.

BRETT COAKLEYAttorney-Advisor

U.S. Air Force Claims Service Center

STEVEN R. KELLYChief of Personnel Claims Branch

U.S. Army Claims Service Center

KEVIN SPEALMANVice President & General Manager

National Claims Services

New Claims Business Rules

by Kevin SpealmanNational Claims Services, Inc.

New Claims Business Rules

• Industry and MCO Personnel have been meeting since March, 2010 – they went into effect July 2, 2013

• Rules are to apply to all types of military shipments – no separate rules for NTS, etc.

• Good cooperation between MCOs and industry – nobody got everything they wanted

High Value/High Risk

• High Value Items - no longer limited to the previous exclusive listing

• 1.7.1. High value/high risk items may include but is not limited to currency, coins, jewelry…

• This affords additional protection to industry, in capping liability at $100 for items not noted on the form, and additional protection to the customer in that ALL valuable items are afforded the additional protection

Notice of Loss/Damage

• TSP must enter delivery info in DPS within 3 days of delivery, or 75 days will not begin until info is in DPS

• If member asks for extension, TSP must contact MCO before denying

• Day for day extension for TDY so long as TDY fell within the 75 day notice period

• TSP should ensure member gets an email address and toll free number to call

Appearance Allowances

• TSP liability is still the lesser of repairs vs. replacement

• While we were unable to get language that would have “legitimized” the appearance allowance, it does remain an option for the TSP in cases where the member is in agreement

• TSP should not ONLY offer an appearance allowance

• This option is appropriate where member prefers a cash allowance rather than actual repairs, or does not want to give up a replaced item for salvage

Salvage

• TSP is not limited to 25% deduction when it knows that member won’t give up an item for salvage (member does NOT have the option of getting 75% of the replacement cost AND keeping the item)

• Any appropriate appearance allowance (cash out) can be made to claimant in lieu of salvage

• If the customer is willing to give up the item for salvage, and the item is beyond economical repair, the TSP is obligated to pay the full replacement cost

Time Limitations

• Definition of what constitutes a claim requires a specific  or “determinable” amount of money (lack of an amount claimed does not necessarily mean that it’s not a legal claim)

• Claimant must respond to an offer made by the TSP, although they can still forward to MCO if no offer made within 30 days.

• TSP must submit requests for extensions for the 9 month or two year deadlines

Horse Trading Section(Partial Settlements)

• New verbiage replaces poorly written section in 400NG

• We can now make an offer that is “valid as a whole,” or includes contingencies

• Offers of this kind must be clear, in writing, and adhere to the format and process as specified in the new business rules (TSP must first make specific offers for each item, and subsequent alternative agreements must be drafted by TSP, written with certain verbiage in bold face type, and signed by both parties, etc.)

Sets & Pairs

• MCOs viewed Sets and Pairs provision as a necessary element of FRV

• This is possibly the worst change for the TSP community. TSPs now obligated to replace the entire set when they are otherwise unable to fix or replace the part of the set that is damaged

• May not be as bad as it seems however, as many customers are reasonable and TSPs can still “horse trade”

Miscellaneous

• New language does require the TSP to send the service member a copy of the estimate if the member requests it (previously TSP had to provide only the MCO with a copy)

• MCO must ask the TSP for relevant information from their file (to get the TSP’s side of the story) before settling a claim that has been forwarded to the MCO

• Any repairs must be to the “reasonable satisfaction” of the claimant

Other Resources

• See also Army Guidance document provided by Mr. Steve Kelly of USARCS

• Actual business rules – go to SDDC website and search on Claims Liability Business Rules

• www.ncsclaims.com – and go to “The Military Claims Blog”

TYLER SMITHSenior Manager, Claims & Quality Assurance

Government Logistics N.V. (Gov/Log)

Mold Business Rules

Tyler L. SmithGovernment Logistics N.V.

SDDC Subcommittee on Mold

• Formed in Feburary 2012.• Military Panel members are from SDDC, AMC, MCO

Chiefs/Deputies, Transcom, Army, Air Force, Navy and Marine Corps Transportation Commands, various PPSOs.

• Industry Reps, Tyler Smith (Government Logistics), Kevin Spealman (National Van Lines), Sandra Maier (Jet Forwarding)

Why New Business Rules?

• Originally the Military Transportation Commands felt that Industry wasn’t doing enough to prevent mold in shipments.

• Marine Corps HQ had led the quest for changes primarily due to a sudden increase in mold-damaged shipments.

How Mold Damage is Occurring

• Code T and J shipments being allowed to sit on uncovered tarmacs in severe inclement weather for extended time periods.

• Shipments coming out of areas with known high humidity and mold problems (Guam, Okinawa, Japan, Korea, etc.)

• Service Members living in Government-Owned Quarters, identified as being sub-standard with mold problems.

• Inherent Vice: No water penetration into containers.• Small minority of shipments getting wet during loading or

transit.

Changes

• Advance Payments to mitigate shipments such as Code T/J.• Transportation will send QC to physically inspect the contents of

containers that appear to be contaminated; if QC does not come out, TSP will be absolved from mitigating the damages.

• If PPSO orders testing for Mold, and no Mold is present, PPSO will pay for the testing.

• Customer may refuse items remediated, but will only receive the costs TSP paid or would pay to remediate the item and not FRV.

• On shipments where the TSP is relieved of liability Code T/J, “Acts of God,” all additional labor, remediation costs, storage, handling, and multiple transport costs will be reimbursed to the TSP.

Code T/J Water Damages

• Work with your Port Agent• AMC (Airlift Mobility Command) will generally not allow

Inspections (breaking down of the pallets) by the TSP at the Military Terminal.

• Port Agent when breaking down the pallets in their warehouse, must note if any shipping containers are wet or were once wet!

• Take pictures! Prepare a report! • Port Agent must send the report and pictures to a POC at the AMC

Terminal.• Send Pictures and report to the TSP.• Deny Liability if the Port Agent notes water damages and reports it

to AMC.

Recent Developments

• Airlift Mobility Command (AMC) has instituted the following new changes for Code T/J shipments:

• Complete and document 100% visual inspections of PPTY at originating, en-route and terminating stations.

• When palletizing PPTY, Port Agents and Aerial Ports will ensure PPTY shipments have TWO NEW Plastic Pallet covers secured under the Net-Set.

• In rare cases where no options are available, PPTY will be the last commodity temporarily stored outside. When all other resources have been exhausted and PPTY must be temporarily stored outside, Ports will utilize an industrial grade multi-use pallet cover that is tear and UV resistant, water/mildew proof, and has reinforced corners and seams. Procure reinforced covers using unit funds.

• When stations identify wet/damaged shipments, they will notify HQ AMC of all occurrences within 24 hours and maintain a local database.

ALAN R. JOBEExecutive Director

Claims Prevention & Procedure Council, Inc.

What or who is the CPPC?What can it do for me?Can it make a difference?

Claims Prevention and Procedure Council, Inc.

or

CPPC for short.

The Mission of the CPPC:

• We are a growing, active, non-profit organization of claims

professionals in the moving and storage industry, and

professional service providers such as furniture repair

professionals, appraisers, adjusters, attorneys, etc.

• Our twin goals are:

(1) to prevent claims (such as damaged and/or missing items) in

the moving and storage industry, and

(2) to handle claims professionally once they do indeed occur.

• If it has to do with claims in the moving and storage industry, our

900 plus members are involved!

The CPPC:

• Connects you to Qualified Individuals to be your front-line customer service.

• Can handle Emergencies.

• Can handle normal transit claims.

• Can save you from paying non-transit related claims or simply cashing out a customer because you do not know what other options you may have.

Cashing out a claim to a customer is not always the right answer!

• Repairing an item will make a customer whole again and will remove the damage from the customer’s vision.

• Removing damaged items that are not repaired from a customer’s home will get them out of sight and prevent them from being transported again.

• Cash outs are necessary, but simply paying a customer to mark the claim closed can cost you far more in the long run.

CPPC Website:www.claimsnet.org

CPPC MembershipMember Search of Data Base

By Name

By State

By Zip Code Service Area

By Type of Services

By Zip Code with mileage qualifier

Monthly Publication

Hardcopy and Digital

R-kived past publications

Searchable options

Educational Library being established

The CPPC is here to link you to who you need to extend your service to your customer. Join us today and

know you have representation at the end of the move, when and where

you need it.

Alan Jobe, your CPPC Ambassador

BILL ROSEPresident

Willis Relocation Risk Group

FRIEND OR FOE

COMMERCIAL HHG CLAIMS

Date: Oct 9, 2013

WILLIS RELOCATION RISK GROUP

Title of Presentation – edit in master | 39

Willis Group• Third Largest Insurance Broker in World• HQ in London and New York• $3.5 Billion in Revenue• 17,000 Associates in 150+ Countries

Willis Relocation Risk Group• Housed in Washington DC / London • Focus on Mobility Risk• Arrange Coverage on 35,000 Shipments Per Year• 5% Military 25%GSA 70% Commercial• Settle some 8,000 Claims Annually• Focus Today on Commercial Claim

• Compare / Contrast Military / GSA / Commercial

Title of Presentation – edit in master | 40

Title of Presentation – edit in master | 41

HHG Claims Are …….

• Inevitable• A Hassle• Result of Internal Service Failures• Someone Else’s Fault / Responsibility• Something for the Insurance Folks to Deal With• Bad Luck• Expensive (Direct or Indirect Costs)• Shippers’ Last Memory of The Move• Customer Service Opportunity• Learning and Improvement Experience• Risk Management Tool• Dependent on Circumstances• What You Make of Them• Response is Driven by Organizational Culture

Title of Presentation – edit in master | 42

Developing a Strategic Relationship With HHG Claims

Risk Profile

Claims Data and Context

Claims Adjusting Culture

Analysis / Communication

Improvement Strategy

Title of Presentation – edit in master | 43

Step 1: Identify Risk Profile

Program Cost Influencers

• Loss Frequency • Loss Ratio• Estimated Loss vs Total Payout• Total Claims Paid and Reserved• Shipment Values• Adjusting Practices / Including Subrogation• Conveyance Breakdown• Origin and Destination Countries and Cities• Origin and Destination Agents• Customers (Corporate)• Shipper Expectations and Behaviors• Shipper Counseling Pre Move / Post Loss

Rates and Corresponding Premiums Program Management Costs

Factors that Impact Your Organizational Risk Profile

Title of Presentation – edit in master | 44

Step 2: Identify Risk Profile / Create Loss Model

Title of Presentation – edit in master | 45

Loss Frequency

Severity and Ratio

ConveyanceSea, Air and

Truck

Regional Route

Supply Chain

Partners OA and DA

CustomersShipment Values

Severity of Loss

Cause of Loss

Step 3 Identify Risk Profile / Claims Adjusting CultureExamine The Current Claims Adjusting and Subrogation Process and Culture

Title of Presentation – edit in master | 46

Current Claims System

and Culture

Who Adjusts / Who is

ResponsibleFlow Chart

the Existing Process

Claimed vs. Paid Audit

Time from Filed to Settled

Claims Paid Stratificatio

n

Subrogation Procedure

Large Loss Review / Info to Correct

Recipients

Claims Reduction Strategy(Historical Perspective)

Pre Loss• ID high value items• Paperwork (exceptions / legible)• Electronics (note age / condition)• Parts Box / Hardware• Rugs: Roll…not fold• Clothing: Hangar damage• Packing Materials: Labels etc.• High Value items: Proof of value• Unattended vehicles / goods in same• Courtesy

• Develop Mold and Mildew Protocol

Post Loss• Implement Mold / Mildew

Protocol• Mold / Mildew: No Delivery• Legible Delivery Report• DA Opinions (keep to yourself)• Keep Damaged Items• Do Not Attempt Repair• Send Docs ASAP• Immediate Contact to Claims Partner• Empathy / Courtesy: Manage

Emotion

Claims HappenDevelop a Culture to Learn from Them

and Improve

CLAIMS PANEL

Wednesday, October 8th

, 2013

8:30am – 10:30am