G en. 123] 123 W OR KE RS ’ CO M P E NS AT I ON
I NT E RPR E T AT I ON OF R EQ U IREMENT T HAT I NS UR E R H A VE “C OM PETENT I NDI V I DUALS ” I N THE S T AT E T O H AN DL E AN D A DJUST D I SP UT E D C L A I MS

J une 21, 2004

T h e H o n o ra b le T

h o m a s P a tric k

O ’R e ill y C hai r m an, W

or ker s ’C om pens at i on C om m is s i on O n behal f of t h e W or ker s ’ C om pens at i on C om m i s s i on (“ C o m m iss io n ” ), y o u h a v e a sk e d f o r g u id a n c e o n th e re q u ire m e n t in t he W or ker s ’ C om pens at i on A ctthati n su rers and s el f- i ns ur ed e m p lo y e rs “ h a v e in th e S tate c o m p e ten t in d iv id u a ls w h o : (1 ) h a n d le a n d a d ju st e a c h d isp u ted w o rk e rs’ c o m p e n sa tio n c laim in th e S tate

. . . and ( 2) pos s es s t he know l edge a nd exper i ence to h andl e and adj us teac h d isput ed cl ai m
. ” Speci fi cal l y , y ou as k foran i nt erpr et at i on of s ever al keyphr as es i n t hatpr ovi s i on: 1. Dis p u t e d c l a i m: W hen does a cl ai m become “di s put ed”?
2. C om

pet ent i ndi vi dual : W h at i s the m ea n ing o f th e term “compet en t indi vi dual ”? M or e s peci fi cal l y , i s anys peci al t r ai ni ng orabi l i t yr equi r ed fora per s on t o be a “ competen t ind i vi dual , ” or w oul d a M ar y l and att or neybe pr es um ed t o be a “ compet ent i nd i vidual ” w hen repr esent i ng an i nsurer i n a dis pu ted w orkers ’ c o m p e n sa tio n m a tter? D o e s an a tto rn e y w h o se o f f ice is lo c a ted o u tof-st at e, b u t w ho i s adm i t t ed to pract i ce i n M ary l and , qu al i fyas a “compet enti ndi vi dual ” und er the l aw ? D oes t he us e of the undefi ned phr as e “c om pet enti ndi vi dual ” r endert he l aw uncons t i tut i onal l yvague?
3. H a n d le a n d

a d ju st in th e S ta te : I s a cl ai m bei ng handl ed and adj us t ed “i n t he St at e” w her e the att or neyi s r equi r ed t o pl ace a cal l t o an out

- of- s t at e i ns ur erforauthor i t yt o s et t l e orr es ol ve a d i s p u t e d c l a i m?
F o r th e re a so n s g iv e n b e lo w , itis o u r o p in io n th a t: 1. A cl ai m i s “di s put ed” unl es s and unt i l i t i s det er m i ned that t he cl ai m w i l l be uncont es t ed. A cl ai m i s no l onger“di s put ed” onc e anyi s s ues have be en r es ol ved.1 2 4 [8 9 O p
. A tt ’y 2. F or purpo ses of t he A ct , a “com petenti nd i vidual ” i s a p e rso n w h o h a s s u f

f icie n t sk ill , kn o w led g e , an d e x p e rie n c e to h a n d le and adj us tw or ker s ’ compensa t i on cl ai m s
. A n at t or neym ays at i s fy t h a tr e q u i r e me n t , b u t t h e r e i s n o p r e s u mp t i o n t o t h a te f f e c t

. An at t or neyw ho w or ks out s i de M ary l and i s nota compet enti ndi vi dual

“ in th e S tate ,” ev e n if th e a tto rn e y is ad m itt e d to p ra c ti c e in M ary l and. T he us e of the phr as e “c om pet enti ndi vi dual ” does not r endert he l aw uncons t i tut i onal l yvague. 3. T he l aw does notpr ecl ude an out

- of- s t at e i ns ur erfr om exer ci s i ng over s i ghtof i t s adj us t er s and at t or ney s i n M ary l and. H o w ever, i f an a t t orneyrepr esent i ng an insur er m ustrout i n e ly c o n tac t a n o u t-o f

-sta te re p re se n tativ e o f th e in su re r f o r a u th o rityto se ttl e a n yc laim , tho se c laim s a re n o t b e in g h a n d led a n d a d ju ste d “ in t he St at e. ”
I
I nt roduct i on A. Statutor

y Pr ov is i ons T he M ar y l and W or ker s ’ C om pens at i on A ct , A nnot at ed C ode of M ary l and, L aborand Em pl oy m entA r t i cl e ( “LE ”) , §9- 101 et s eq. , sets ce rt ain st an d ard s fo r an insu rer’s ac ce ssibil ityto claim an ts. In p a rticu lar , itsta tes :

A n insur er that pr ov i des w orkers ’ compensa t i on i ns ur ance i n t he St at e s hal l have i n t he St at e compet enti ndi vi dual s w ho: ( 1) handl e and adj us teac h di s put ed w or ker s ’ compensa t i on cl ai m i n t he St at e for t he i ns ur er ; and ( 2 ) p o s s e s s t h e know l edge a nd exper i ence t o handl e and a dj us teac h di s put ed c l a i m. L E §9- 410( a)

. T he st atut e al s o r equi r es t hatt he i ns ur eres t abl i s h a t ol l

- fr ee t el ephone num ber for us e dur i ng nor m al bus i nes s hour s by cl ai m ant s and i ns ur ed empl oy er s
. L E §9- 410( b)

. T he A cti m pos es sim il ar req u ir em en ts on em p loy ers w h o self-insu re. L E § 9 -40 5 (d). T he C o m m i s s i on i s author i zed t o i m pos e a f i ne of up t o $1, 000 onG en. 123] 125

In the rem ain der of

thi s o pin ion , w eus e thete rm “ ins ure r”to 1 e nc omp a ss b oth

ins ure rs and

se lf -i ns ure d e mpl oye rs
. The phra se “undisputed wor kers’ compensation claim” does not 2 appea r in the statute or othe rwise in the regulations. Nor does the definition appea

r to cove r claims for which no issues are ever filed a nd that there forearenot the subject of a ny dispute. Its presenc e in the de fi nitions se c tio n o f C OM AR 14 .0 9. 01 a

pp e ars de signe d s imp ly

to c lari fy wh e n th e Commis sio n w illc on sid e r a fo rm e rly “ dis pute d” claim to no longe r be “ disputed.” an i nsureror sel f-i nsured em ploy er w ho fai l s t o co m plyw i t h these 1 req u ir em en ts. L E § § 9 -40 5 (d)(3 ), 9 -41 0 (c).
B. Regul

ati ons For purpos es of t hi s l aw , t he C om m i s s ion h as adopt ed r egul at i ons t o di s t i ngui s h betw een “ di s put ed” a nd “undi s put ed” w or ker s ’ compensa t i on cl ai m s
. T hos e r egul at i ons s t at e:

( 2 ) “D i sputed w o rkers’ compensa t i on cl ai m ” means a:

( a ) N ew cl aim in w hi ch i s s ues have be en fi l ed;

( b) Pendi ng cl ai m i n w hi ch one orm or e i s s ues have be en fi l ed; or

( c ) C l ai m tha t i s pendi ng o n a p p e a l. ( 3 ) “U nd i sputed w orker s’ c o m p e n sa tio n c laim ” m e a n s a c laim in w h ich a ll i ss u e s h a v e b e e n : ( a) W i t hdr aw n; ( b) R es ol ved bya dec i s i on of t he comm i s s i on t hat i s notappea l ed; or (c ) R e so lv e d o n a p p e a l.
C O M A R 1 4

. 0 9

. 0 1

. 0 1 B (2)-(3). 21 2 6 [8 9 O p
. A tt ’y T he C om m i s s i on has al s o adopt ed re gul at i ons for enfor cementof t he s t atut or yr equi r ement s
. C O M A R 14. 09. 06 (Lo cal O ffi ce R equ i rem ents for I nsurer s)

. In l a rg e part , t ho se r egul at i ons m i r r ort he l anguage of t he s t atut e. H ow ever , i n s ever al i ns t ance s , t hey el abor at e on t he s t atut e. For exampl e, t he r egul at i ons sta te th a t, i f

a n in su re r f

iles iss u e s to d isp u te a c laim , the f ili n g itse lf m ustbe m ade b yt he “co m petent i nd i vidual s” w ho han dle and adjust cl ai m s for the i nsurer
. C O M A R 14

. 09

. 06

. 02 B

. T he r egu l at i on s al so s peci fyt hat a fine of up t o $1, 000 m aybe i m pos ed foreach vi ol at i on, t h at ea ch dayan i ns ur eri s outof compl i ance w i t h t he s t atut e cons t i tut es a s epar at e vi ol at i on, and thata s el f-insure d empl oy err i s ks r evoca t i on of s el f- i ns ur ance appr oval i f t he empl oy er does notcompl y
. C O M A R 14. 09. 06. 03. Fi nal ly , t he r egul at i ons det ai l hear i ng and appe al pr ocedur es fort he adj udi cat i on of vi ol at i ons
. C O M A R 14. 09. 06. 04-

. 05.
II
L egi s l at i ve H i s t ory A. Loc al

O f f i c e Requir e m e nt
F ro m t he earl i estday s of t he M ary l and w orkers ’ compensa t i on l aw unt i l veryrec en tl y , t he l aw r equi r ed thateac h i ns ur erm ai nt ai n a “l ocal offi ce” t o handl e w or ker s ’ compensa t i on m a tte rs
. See C hapt er 456, §29, L aw s of M ary l and 1 9 2 0

. T hat requi rem ent or i ginal l yread as fol l ow s:

A nyi ns ur ance companyoremploy er c a rry in g h is ow n in su ra n c e , d e sirin g to do comp e n s at i on i ns ur ance i n t hi s St at e, s hal l be re qui r ed t o keep and m ai nt ai n a l oca l o f f i c e i n c h a r g e o f

a c o mpe t e nt per s on w ho s hal l h an dl e al l t he compensa t i on w or k fors ai d i ns ur ance co m p an yo r self-insu rer. I d. A l t hough w e coul d l ocat e no l egi s l at i ve hi s t or yconce r ni ng t he o rig in o f th is p ro v isio n , itse e m s e v id e n t th a t its p u rp o se w a s to ens ur e t hatcl ai m s w o u ld b e handl ed pr om pt l yand ef fec t i vel yand t hatan i ns ur erw oul d be r es pons i ve t o i nj ur ed empl oy ees and i ns ur ed empl oy er s
. T hi s req u ir em enthas r efl ect ed the conc ern t hat “[c ] om pens at i on admi ni s t r at i on w i l l be i m pede d if t he eve r y day handl i ng of cl ai m s r equi r es t he cont act i ng of d ist ant i ns ur ance o ffi ces
. ” W

or km en’s C om

pens at i on and R ehabi l i t at i on Law , The C o u n c il o f

S ta te G o v e rn m e n ts (1 9 7 3 ).G en. 123] 127

That l eg islation also recodifie d the “local office ”re quirement for 3 worke rs’ c ompensation insurers f rom the Insuranc e Ar

ticle t o th e L abor and Employ

ment Article, whereit was codi fi ed with s imilar provisions pertaining to self- insured emp l o yers a nd g overnme ntal self-insura nce gro up s. Insurer s were require d to make the toll-fre e telephonenumber

4 availa blefo r i ns ure ds , a s w ell as e mpl oye e s, c la ima nts , a nd the ir representatives. B. Ef f or t to Elim inate Loc al

O f f i c e Requir e m e nt Som e have view ed the l ocal offi ce r equi r ement as unnece s s ar yi n l i ght of m odern comm uni cat i ons
. T hi s has pr om pt ed e f f o rt s to m o d if

yth e re q u ir e m e n t. 1. 2000 L egi s l at i on I n 2000, a bi l l w as i nt r oduced t o l i m i t t he l ocal offi ce r equi r ement fori ns ur er s by m aki ng i t appl i cabl e onl yt o “cont es t ed cl ai m s
. ” H ous e B i l l 1257 ( 2000) ( fi r s t r eadi ng)

. T hatbi l l w as s ubs t ant i al l yamended, w i t h t he r es ul tt hat the loc al offi ce re q u ire m e n t w a s re tain e d f o r a ll cla im s a n d re sp o n sib ili tyf o r its enfor cement , w i t h r es pectt o i ns ur er s , w as s hi ft e d f r o m t he I ns ur ance C om m i s s i onert o t he C om m i s s i on. C hapt er468, L aw s of M ary l and 2000. I n addi t ion , the L egi s l atur e adde d a r equi r ement t hateac h

3 i ns ur erm ai nt ai n a t ol l

- fr ee t el ephone num bert hr ough w hi ch a cl ai m antorr epr es ent at i ve of a n empl oy ee orcl ai m antcan make d ir e c t te le p h o n e in q u ir ie s d u ri n g re g u la r b u s in e s s h o u rs
. I d. 4
2. 2001 L egi s l at i on T he nexty ear , l egi s l at i on w as pr opos ed t o el i m i nat e the re q u ire m e n t th a t an in su re r m a in tain a “ lo c a l o f f ice ” a n d to s ubs t i tut e a r equi r em entt hatt he i ns ur erhave a “compet ent i ndi vi dual ” i n t he St at e t o “handl e” di s put ed cl ai m s
. Senat e B i l l 592 (2 0 0 1 ) (f irs t r e a d in g ). P rio r to p a ss a g e , the b ill w a s a m e n d e d to s peci fyt hatan insur erm us thave “ i n t he St at e compet ent i ndi vi dual s w h o
. . . handl e an d a djust each d i sputed w orkers ’ c o m p e n s a tio n c la im in th e S ta te

... and w ho pos s es s the knowl edge a n d ex p e rie n c e to h a n d le a n d

a d ju st ea c h d isp u tedc la im

. ” C hapt er 609, L aw s of M ar y l and 2001 ( emphasi s added)

. T he el i m i nat i on of a p h y s i c a l o f

f i c e r e q u i r e me n ta n d t h e l i mi t a t i on t o d i s p u t e d c l a i ms re m a in e d in th e b ill.1 2 8 [8 9 O p
. A tt ’y T he del et i o n o f t he “br i cks and mort ar ” r equi r ement w as a p p a r e n t l ya r e s p o n s e t o t e s t i mo n yb yi n s u r e r s th a tc e n t r a l i z e d c l a i ms o p e ra tio n s w o u ld re s u lt in a d m in is tr a tiv e e f f ic i e n c y
. See B ill A n aly sis of

S en ate B il l 59 2 fo r S en ate F inan ce C o m m ittee (2 0 0 1 ). Pr oponent s of t he bi l l ar gued thatdevel opm ent s i n comm uni cat i ons te chnol ogyw oul d al l ow uncont es t ed cl ai m s t o be handl ed mo re e f f ic ie n tly in a c e n tr a liz e d lo c a tio n
. See T est i m onyon behal f of M A C R i s k M anage m entbefor e Senat e Fi nance C om m i tt ee conce r ni ng SB 592 ( M ar ch 13, 2001)

. Si m i l ar l y , a r epr es ent at i ve of G ia ntFood st at ed thatt he bi l l w oul d al l ow fors t r eaml i ned pr oces s i ng of t he 85% of i t s cl ai m s t hatar e uncont es t ed. L et t erof B a rryF . S c h e r to S e n a to r T h o m a s L . B ro m w e ll (M a rc h 7 , 2 0 0 1 ); s ee als o L et t er of

D ol or es M

. Skal s ki , Pr es i dentof M i d- A t l ant i c Food D eal er s A s s oci at i on, I nc. t o Senat or T hom as L

. B r om w el l ( M ar ch 8, 2 0 0 1 ).
T he t es t i m onyon t he bi l l echoe d pr es ent at i ons m ade t o t he W orker s ’ C o m p en sati o n B enef i tand I ns ur ance O ver s i ghtC om m i tt ee dur i ng t he 2000 i nt er i m
. T hatC om m i t t ee r epor t ed that

carr i er s as s er tt hatt he pr oces s w oul d be m o re e f f icie n t if th e yc o u ld se n d b ill s forcert ai n s i m pl e cl ai m s t o a ce nt r al p l a c e , p o s s i b l yo u to f S t a t e
. S o me i n s u r e r s e x p r e s s e d i n t e r e s ti n s e n d i ng s i m pl e “m ed ic al onl y ” cl ai m s t o a centr al pr oces s i ng l ocati o n , w h il e o thers s t r es s ed the nee d t o go br oaderand s end a l l s i mpl e “ un c o n t e s t e d ” c l a i ms r egar dl es s of w hether t heyar e “medi cal onl y
. ”
W or ker s ’ C om pens at i on B enef i t an d I ns ur ance O ver s i ght C om m i t t ee, R epor tof t he 2000 I nt er im , p
. 2. Pr oponent s of a l i m i t ed pr es ence r equi r ement t es t i fi ed thatt he bi l l w oul d all ow i ns ur er s t o red u ce co st s beca us e bi l l s w oul d be s entt o a ce nt r al p la c e , a n d th u s e n a b le a n in s u re r t o b e tte r s e rv e e m p lo y e e s
. Id ., p. 26.
C oncerns w er e expr es s ed, how ever , t hat ther e w oul d be d el ay s and thatr emot e off i ces w oul d be unfa m i l i arw i t h M ary l and w or ker s ’ compensa t i on l aw and w i t h r es our ces avai l abl e fori nj ur ed w or ker s i n M ary land. T es t i m onyof C hes apea ke A s s oci at i on of R e h a b il ita tio n P ro f

e ss io n a ls in th e P riv a te S e c to r b e f o re S e n a te Fi nance C om m i t t ee ( M ar ch 13, 2001) ; L et t er of C haneyE nt erpr i s es to S en ator A rt h u r D o rm an (M arc h 1 3 , 2 0 0 1 ).G en. 123] 129 Th e a me n d e d bi l l t hatemer ged s oughtt o addr es s t he conc erns of bot h s i des byr equi r i ng t hatdi s pute d cl ai m s be handl ed and a d j u s t e d i n M a r y l a n d whi l e , a t t h e s a me t i me , a l l o wi n g for centr al i zed p rocess i ng of u nd i sputed cl ai m s. In o t her w ords, d isp u ted o r c o n tes ted c laim s w e re to b e h a n d led in M a ry lan d , w h ile uncont es t ed cl ai m s coul d be handl ed out

- of- s t at e. III
A n a ly sis
A . D isp u ted Cla im s U nd er LE §9 -410(a) and §9 -405(d), a “ dis pu t ed” w orkers ’ compensa t i on cl ai m i s t o be “ha ndl ed and adj us t ed” bya compet ent i ndi vi dual i n t he St at e. Y ou have a s ked w hen a c l ai m i s cons i der ed “di s put ed. ”
T he W or ker s ’ C om pens ati on A ctdoes notdefi ne “di s put ed w o rk e rs’ c o m p e n sa tio n c laim .” H o w e v e r, th e A c t se ts f o rth c e rta in p r o c e d u r e s f

o r a n e mpl o y e ro ri n s u r e rt o c o n t e s ta c l a i m. Und e rLE §9- 713, aft er a cl ai m i s fi l ed w i t h t he C om m i s s i on, t he empl oy eror i t s i ns ur er m us t ei t her begi n pay i ng benef i t s orfi l e an i s s ue w i t h t he C o m m iss io n to c o n tes t th e c laim . A s yo u n o ted in y o u r re q u e st, s om e i s s ues m ayal s o be fi l ed w i t h t he C om m i s s i on l at eri n t he pr oces s – forexampl e, w hen a cl ai m ants eeks r ei ns t at ement of t em po raryt otal dis abil i t yben efi t s. T he C om m i s s i on’ s r egul at i ons r efl ect thi s pr ocedur e by d e f in in g th e p h ra se “ d isp u ted w o r k e rs’ c o m p e n sa tio n c laim ” to i nc l u d e a n yc l a i ms i n whi c h i s s u e s a r e f i l e d wi t h t h e Commi s s i on, as w e ll a s ap p ea ls of

tho se c lai m s. C O M A R 1 4

. 0 9

. 0 1

. 0 1 B (2). “Und i s p u t e d ” c l a i ms a r e t h o s e f o rwhi c h i s s u e s h a v e been w i t hdr aw n orot herw i s e re s ol ved. C O M A R 14. 09. 01. 01B ( 3)

. T he r egul at i ons ar e s i l ent on w hether a cl ai m s houl d be cons i der ed “di s put ed” or“undi s put ed” dur i ng t he per i od betw een i t s fi l i ng and th e d e a d lin e f

o r f ilin g is s u e s
. I n o u r o p i n i o n , a p e n d i n g c l a i m s h o u l d b e t r e a t e d as “di s put ed” pr i or t o t he deadl i ne for fi l i ng i s s ues , i f t he i ns u rer h as notcomm ence d paym ent o f b enefi t s
. A s out l i ned above , t he L e g isla tu re m o d if

ied th e lo c a l o f

f ice re q u ire m e n t in 2 0 0 2 to lim it i t t o “di s put ed” c l ai m s
. I ti s evi dent fro m t he l egi s l at i ve hi s t or yt hat t he p u rpos e of thatamendm entw as t o i ncr eas e admi ni s t r at i ve eff i ci encybyal l ow i ng an i ns ur ert o cons ol i dat e the handl i ng of1 3 0 [8 9 O p
. A tt ’y

T h i s conclusion is consistent with advice previously provided 5 by this Office

. SeeL etter of Assistant Attorney Gene ral Kathry n M. Rowe to Sen ator Thomas L . Bromwell and De leg ate Micha el E. B usch (September

18, 2001). For a brie f period, the Commi ssio n ’s re gulations defined 6 “compe tent individual” as “a n individual possessing th e knowledg e and e xpe ri e nc e to h andlec la ims ari singun de r t heMa ry land W ork ers ’ Compensation L aw.” That definition, which ref erred to the handlingbut not the adjustment of claims, wa s adopted in 2001, but eliminated the followingyear
. See28:10 Md. R. 949 (May 18, 2001); 29:17 Md. R. 1382 (Augus t 23 , 2 00 2) . Wh e n th e Co mm is sio n e lim inate d th e de fi nition in 2002, it also a dded a new regulation trackingthe statutory languag e that requ i res “competent individuals who ... possess the knowle dg e and experienceto handle and adjust each disputed c laim.” Id. u n c o n tes ted c laim s tha t lar g e ly in v o lv e a d m in istra tiv e p ro c e ss in g , if th e in s u re r f

in d s it m o re e f

f ic ie n t to d o s o
. T hus , dur i ng t he per i od betw een the fi l i ng of a c l ai m and the d e a d lin e f

o r f ilin g is s u e s , th e c la im s h o u ld b e tr e a te d a s “ d is p u te d ,” u n less the i ns ur erhas comm ence d pay i ng t he cl ai m
. I f i s s ues are 5 f i l e d , i tr e ma i n s a d i s p u t e d c l a i m un t i l t h o s e i s s u e s a r e r e s o l v e d. O nce i ti s det erm i ned thata cl ai m w i l l be uncont es t ed and thatno i s s ues w i l l be fi l ed, i t i s not “di s put ed” and need notbe handl ed by an i ndi vi dual i n M ary l and. I f i s s ues ar e l at er fi l ed for s om e r eas on, t he cl ai m w oul d t hen bec om e “di s put ed” fo rpurpos es of t he l ocal h a n d lin g re q u ire m e n t.
B
. Competent I

ndi vidual
A s not ed above , t he A cthas r equi r ed s i nce 1920 thatan in su re r h a v e a “ c o m p e ten t in d iv id u a l” in M a ry lan d in c h a rg e o f its w or ker s ’ compensa t i on bus i nes s
. C u rrent l y , t he A cts peci fi es t hat an i ns ur erm us tr el y on t he s er vi ces of “c om pet enti ndi vi dual s w ho

. . . pos s es s know l edge a nd exper i ence t o handl e and ad just eac h dis pu t ed clai m
. ” Y ou hav e asked several qu est i on s r el at ed to t he u se o f th e p h ra s e “ c o m p e te n t in d iv id u a l.”
1. M e ani ng Y ou as k fi r s tt he meani ng of t he phr ase “compet ent i ndi vi dual

. ” T hat phr as e i s not defi ned i n t he st atut e. T he comm on 6 d ic tio n a ry m e a n in g p ro v id e s a u s e f u l sta rt in g p o in t. See M a rr io tt Empl o y e e s F e d e r a lCr e d i tUni o n v
. M VA , 346 M d. 437, 447, 697 A

. 2d 455 ( 1997)

. O ne di ct i onary defi nes “compet ent ” a s “havi ngG en. 123] 131

W hi le th e te rm s “ ha

ndle ” and “ a dju st”areno t sp e c if

ic a lly 7 define d in the statute, their meaning is w ell understood in the conte x t of insurance . A treatise on insurancelaw explains that “[o] nce the insured has provided ade qu at e n o tice and proof of loss, or noticeof claim or occur renc e, the insure d ’s cl aimis in the hands of the insure r”, which marks the be g inning of

th e “c l ai m s handlingproce ss.” 14 Couch on Insurance3d 198:1. To “adjust”a n insurance claim i s “to determine the amount that an insurer

will pay an insured to c over a

loss.” Black’

s Law Di c tio na ry

43 (7 e d. 19 99 ); se eals o 46A C.J .S. Insurance §1343

th (“ a dju ster”is o ne “ wh os e bu sin e ss it is to a sc e rt a in the los s and a gre e wi th insured on the se ttlement”). s ui t a b l e o rs u f

f i c i e n ts k i l l , k n o wl e d g e , e x p e r i e n c e f o rs o me purpos e. ” R andom H

ous e D i ct i onar

y of the Engl is h Language 417 (2 e d . 1 9 8 7 ). In th e p re se n t co n tex t, th e p u rp o se , as th e sta tu te nd i ndi cat es , i s t he handl i ng and adj us t m entof w or ker s ’ compensa t i on cl ai m s
. T h u s, a “c om pet enti ndi vi dual , ” forpurpos es of LE §9- 4 1 0 (a ) a n d § 9 -4 0 5 (d ), is a p e rso n w h o h a s su f f icie n t sk ill , kn owl e dg e , a nd e xp e r i e nc e t o h a nd l e a nd a dj us tw orkers’ c o m p e n s a tio n c la im s
. 2. A t t orney as C om pet ent I ndi vi dual
Y o u a lso a sk w h e th e r a n ysp e c ial tra in in g o r a b ili tyis r equi r ed for an i ndi vi dual t o qual i fy as a “compet ent i ndi vi dual , ” and w hetheran att or neyr epr es ent i ng an i ns ur erw i t h r es pectt o a d isp u ted c laim c a n b e p re su m e d to m e e t th a t sta n d a rd . T h e sta tu te does notr equi r e anypar t i cul art r ai ni ng, butr atherknow l edge a nd exper i en ce in the h an d li n g an d ad justm en t of

w o rke rs’ co m p ens at i on cl ai m s
. T he C om m i s s i on coul d i s s ue i nt erpr et at i ve r egul at i ons

7 e la b o r a tin g o n th e s ta tu to ry re q u ir e m e n t. See 75 O pi ni ons of

the A t t or ney G eneral37, 49- 50 ( 1990) ( des cr i bi ng t he ef fec tof in ter p re tativ e ru les ). A n a tto rn e yc o u ld m e e t th o se q u a lific a tio n s if t he at t orneyhas had exp eri ence in han dli ng and adjust i ng cl ai m s. H ow ever, given t hat m ostat t orney s do not han dle or adj ustw orkers ’ compens a t i o n c l a i ms , t h e r e i s n o p r e s u mpt i o n t h a ta n a t t o r ney s at i s fi es t he s t atut or yr equi r ement fora “c om pet enti ndi vi dual w ho ... p o s s e s s [ e s ] t h e k n o w le d g e a n d e x p e ri e n c e to h a n d le a n d a d ju s t ... di s put ed cl ai m [s ]

. ”
Y ou as k w hetheran att or neyw hos e off i ce i s l ocat ed out

- ofs t at e, butw ho i s admi t t ed t o pr act i ce i n M ary l and, coul d qual i fyas a “c om pet ent i ndi vi dual ” for purpos es of t he w or ker s ’ compensa t i on l aw
. E ven i f t he att or neyot herw i s e qua li fi ed as a “c om pet ent in d iv id u a l” b a se d o n h is o r h e r k n o w led g e a n d e x p e rie n c e in handl i ng and adj u sti ng cl ai m s , t he att or neyw oul d notbe “i n t he1 3 2 [8 9 O p
. A tt ’y

We assume the re ferenceto an “out-of -state of fi ce ” in your 8 qu e sti on me ans that th e atto rn e y

wo uld behan dl in gor

a dju sti ngc la ims from that off

ice. The mere fac t that an attorne y has an out-of

-state of fice does no t , b y

itself, disqualify

the attorne y

from handlingor adjusting c la ims

. St at e” i f t he att or ney p erf or m ed s uch w or k i n an off i ce out s i de M ary l and. 8
3. W he t he r t he Phra s e i s U nc ons t i t ut i ona l l y V ag ue Yo u s t a t e t h a t , i n a n e f

f o r t t o i n s u r e c o mp l i a n c e wi t h t h e l a w, t he C om m i s s i on has r equi r ed t hatan att or neyr epr es ent i ng an i ns ur er cert i fythatt he cl ai m had bee n “handl ed and a dj us t ed bya compet ent i ndi vi dual w i t hi n t he St at e. ” A ppar ent l y , m ember s of t he defens e bar obj ectt hatt heyar e unabl e t o cert i fyt hata per s on i s a “c om pet ent i nd i vidual ” beca use t he ter m “com petent ” i s not defi ned

. Y o u ask w hethert he lack of a st atutor ydefini t i on renders th e ph ras e uncons t i tut i onal l yvague. T h e v o id -f

o r-v a g u e n e ss d o c trin e is ro o ted in th e F o u rte e n th A m e n d m e n t’ s g u a ra n te e o f p ro c e d u ra l d u e p ro c e s s
. F i n u can v. Mar yland B oar d ofP hys i ci an Q ual i t y Ass ur ance , 380 M d. 577, 846 A .2 d 3 7 7 , 3 8 5 (2 0 0 4 ). It e m b o d ies tw o b a sic p rin c ip les : (1 ) th a t a s t atut e gi ve “f

ai rnot i ce” t o per s ons of or di naryi nt el l i gence of w hat i s pr ohi bi t ed; and ( 2) t hati tpr ovi de l egal l yfi xed s t andar ds and adequa t e gui del i nes forpol i ce, j udi ci al o ff ic er s , t r i er s of fa ctand o th e rs w h o a re o b lig e d to e n f o rc e , a p p ly, a n d a d m in is te r t h e la w
. Id at 38 5 -86

. T h e v o id-fo r-v a g u e n ess d o ctri n e d o es n o t r eq u ir e abs ol ut e pr eci s i on. T her e i s n o r equi r ement t hateac h t er m i n a sta tu te b e d e f

in e d in th a t s tatu te. N o r is a sta tu te u n c o n stitu tio n a lly vague mer el ybeca us e i tal l ow s forthe exer ci s e of s om e di s cr et i on on t he partof age ncyoffi ci al s
. “I t i s onl yw her e a s t atut e i s s o br oad as t o be s us cept i bl e t o i r r at i onal and s el ect i ve patt erns of enfor cement tha ti tw i l l be hel d uncons t i tut i onal

. . . . ” Id ., quot i ng B o w e rs v . S ta te , 2 8 3 M d

. 1 1 5 , 1 2 2 , 3 8 9 A

. 2 d 3 4 6 (19 7 8 ).
A s not ed above , t he s t atut or ypr ovi s i ons r equi r i ng t hat insu rers h av e “ co m p eten t ind ividu als” in the S tat e sp ec ifythe n ature of t he compet ence r equi r ed – know l edge a nd exper i ence i n t he handl i ng of cl ai m s – and the ci r cum s t ance s underw hi ch that compet ence i s t o be exe r ci s ed – di s put ed cl aim s. T hus , t hey s uffi ci ent l yi nfor m an i ns ur erof t he obl i gat i on im p o sed byt he s t atute. T h ey s t at e t hatobl i gat i on i n pl ai n l anguage t hatcan be u n d e rs to o d b yp e o p le o f o rd in a ry in te llig e n c e
. See U nnam edG en. 123] 133 P hys i ci an v. C om m is s i on on Medi cal D is ci pl i ne , 2 8 5 M d

. 1 , 1 5 , c e rt. deni ed , 444 U

. S. 868 ( 1979)

. Fi nal l y , w hi l e t he st atut es do gi ve the C o m m iss io n so m e d isc re tio n to d e ter m in e w h e th e r a n in d iv id u a l is compet enti n handl i ng and adj us t i ng cl ai m s , t hat d is cr et i on i s not u n f e ttere d . T h u s, th e lo n g sta n d in g re q u ire m e n t o f th e S tate W or kers’ C o m pens at i on A ctt hatan i ns ur erus e “c om pet ent in d iv id u a ls” w ith in th e S tate to h a n d le a n d a d ju st c laim s is n o t v o id for vag uen ess. C
. Consultati on w ith O ut - of

-State O f f i ce Y o u s t a t e t h a tt h e C o m m i s s i o n h a s r e q u i r e d a t t o r n e ys re p re se n tin g in su re rs to c e rtify th a t th e y w ill “ h a n d le a n d a d ju st” cl ai m s w i t hi n t he St at e. Som e att or ney s have obj ect ed t o t he us e of t he term “adjust , ” st at i ng t hat they recei ve aut ho ri t y t o co m prom i se c laim s o n a c a se -b y -c a se b a sis b ytele p h o n e f ro m a n o u t-o f

-sta te adj us t er
. Y ou as k w hether a cl ai m i s bei ng “handl ed and a dj us t ed by a compet enti ndi vi dual w i t hi n [M ary l and] ” i f an a t t or neyi s r equi r ed t o cal l an out

- of- s t at e i ns ur erforauthor i t yt o s et t l e orr es ol ve a d is p u te d c la im

. If a n insu rer’s prim aryo ff ice is lo ca ted in an o ther state, th ere u n d o u b ted lyw ill b e o c c a sio n s w h e n a “ c o m p e ten t in d iv id u a l” d e sig n a ted to h a n d le a n d a d ju st c laim s in M a ry lan d w ill n e e d to cont actt hatoffi ce t o di s cus s t he i ns ur er ’ s pol i ci es and pr ocedur es or e v e n a p a r t i c u l a r c a s e
. S u c h c o n s u l t a t i o n s d o n o tme a n t h a tc l a i ms ar e bei n g h a n d l e d a n d a d j u s t e d o u t s i d e M a r y l a n d

. On t h e o t her h a n d , if th e in su re r’s re p re se n tativ e in M a ry lan d h a s n o a u th o rityto se ttl e c laim s w ith o u t f

irst c o n tac tin g th e o u t-o f -sta te o f f ice , in r e a lity t he cl ai m s ar e bei ng adj us t ed by t he out

- of- s t at e offi ce. T hus , i f an a tto rn e ym u st ro u tin e lyc o n tac t an o u t-o f -sta te o f f ice o f a n in su re r to s et t l e cl ai m s , t he i ns ur eri s noti n compl i ance w i th t he l ocal offi ce r equi r ement of t he M ary l and s t atut e.

IV
C onc l us i on In su m m a ry , itis o u r o p in io n th a t: 1. A cl ai m i s “di s put ed” unl es s and unt i l i ti s det er m i ned t hatt he cl ai m w i l l be uncont es t ed. A cl ai m i s no l onger“di s put ed” once a nyi s s ues have be en r es ol ved.1 3 4 [8 9 O p
. A tt ’y 2

. F o r p u rp o se s o f

th e A c t, a “ c o m p e ten t in d iv id u a l” is a p e r s o n w h o h a s s u f

f icie n t sk ill , k n o w led g e , an d e x p e rie n c e to handl e and a dj us t w or ker s ’ compensa t i on cl ai m s
. A n at t or neym ay sa tisf y th a t re q u ire m e n t, bu t th e re is n o p re su m p tio n to th a t ef f e c t. A n at t or neyw ho w or ks o u tsi d e M ary l and i s nota compet ent i ndi vi dual “i n t he St at e, ” even i f t he at t or ney i s admi t t ed t o pr act i ce i n M ar y l and. T he us e of the phr as e “compet ent i ndi vi dual ” does not r endert he l aw uncons t i tut i onal l yvague. 3. T he l aw does notpr ecl ude an out

- of- s t at e i ns ur erfr om exer ci s i ng over s i ghtof i t s adj us t er s and at t or ney s i n M ary l and. H o w ever, i f an a t t orneyrepr esent i ng an insur er m ustrout i n e ly c o n tac t a n o u t-o f

-sta te re p re se n tativ e o f th e in su re r f o r a u th o rityto se ttl e a n yc laim , tho se c laim s a re n o t b e in g h a n d led a n d a d ju ste d “ in t he St at e. ”
J. Jo sep h C u rran , Jr. A t t or ney G ener al
K im b erlyS

. W ard A ss i s t ant A tt orney G eneral
R o b e rt N . M c D o n a ld C hi ef C ouns el O pi ni ons and A dvi ce