Source: http://www.maine.gov/pfr/insurance/company/exam_reports/2008/2008gab_robins_north_american.htm
Timestamp: 2014-07-30 10:04:07
Document Index: 553516526

Matched Legal Cases: ['§ 221', '§ 359', '§ 223', '§ 1474', '§ 153', '§ 359', '§ 359', '§ 359', '§ 359', '§ 1474', '§ 1474', '§ 205', '§ 205', '§ 360', '§ 212', '§ 213', '§ 215']

GAB Robins North American, Inc. : Bureau of Insurance
> Bureau Reports > Agencies and Other Entities > GAB Robins North American, Inc.
GAB Robins North American Inc.
Parsippany, NJ 07054-4412
FEIN: 13-2747054
License # TAF31965
Pursuant to Title 24-A, M.R.S.A. § 221, a Targeted Market Conduct Examination was conducted of GAB Robins North American Inc. I hereby accept this Report of Examination and make it an official record of the Bureau of Insurance.
SCOPE OF ENGAGEMENT........................................................................................................................ 2
ACKNOWLEDGMENT ............................................................................................................................... 7
Pursuant to the certification of findings in accordance with 39-A M.R.S.A § 359(2) from the State of Maine Workers’ Compensation Board (“WCB”) and under the authority of 24-A M.R.S.A. § 223 and in conformity with your instructions, Bureau staff has made a targeted market conduct examination of:
(FEIN: 13-2747054)
The following report is by test. All tests applied during the examination are reported and respectfully submitted.
The Company provides risk and claims management services and solutions to the insurance and self-insured market place. The Company’s headquarters is in Parsippany, New Jersey, and it handles Maine workers’ compensation claims in its East Hartford, Connecticut office.
The material findings and violations contained in this report are summarized below.
The Company is non-compliant with 24-A M.R.S.A. § 1474 regarding nine claims that were handled for one employer.
The Company’s compliance rate for First Report of Occupational Injury or Disease (WCB-1) filings is 29%, which is below the WCB’s performance benchmark of 85%.
The Company’s compliance rate for Memorandum of Payment (WCB-3) filings is 83%, which is below the Board’s performance benchmark of 85%.
The Company’s compliance rate for Notice of Controversy (WCB-9) filings is 50%, which is below the Board’s performance benchmark of 90%.
Pursuant to 39-A M.R.S.A. § 153(9), the WCB established a Monitoring, Audit and Enforcement (“MAE”) program. The functions of the MAE program include but are not limited to audits of payment timeliness and claims-handling practices of insurers in accordance with 39-A M.R.S.A. § 359. The WCB MAE Audit division examined twenty-five (25) claim files for the period under examination (dates of injury between January 1, 2006 and December 31, 2006) in part to determine whether the Company had violated the claims-handling provision of 39-A M.R.S.A. § 359(2). The findings of the WCB Compliance Audit Report dated July 12, 2007 (“WCB Audit”) were:
Failure to file or timely file forms with the Board
Failure to file First Reports electronically
Failure to complete Board forms
Failure to report accurate information on forms filed with the Board
Failure to discontinue benefits properly
Failure to pay approved agreements timely
The WCB determined that the pervasiveness and magnitude of the findings constituted a “pattern of questionable claims-handling techniques”. On December 19, 2007, the WCB and the Company entered into a consent decree, which established the patterns of questionable claims-handling techniques described above and assessed fines therefore.
In accordance with 39-A M.R.S.A. § 359(2), the WCB certified the WCB Audit findings to the Superintendent of Insurance on December 21, 2007. Section 359(2) requires the Superintendent of Insurance to take appropriate action to bring such practices to a halt.
In order to meet the responsibilities set forth in 39-A M.R.S.A. § 359(2), the Superintendent of Insurance decided to determine whether or not the patterns of questionable claims-handling techniques found by the WCB still existed. Therefore, an examination was planned in accordance with the National Association of Insurance Commissioners’ Market Regulation Handbook (“Handbook”). Bureau examiners developed compliance verification procedures based on the Handbook to measure whether the Company timely filed all required WCB forms, accurately calculated indemnity benefits and timely distributed benefit payments as required by the Workers’ Compensation Act (“Title 39-A”) and WCB Rules and Regulations.
The examination period covered all claims with dates of injury occurring on or after January 1, 1993 that were open between January 1, 2008 and December 31, 2008, for employees residing in Maine or claimants involved in losses in Maine. No on-site examination phase was conducted.
Company records indicated a population of forty-four (44) claims during the examination period.
During the examination period the company transferred the National Semiconductor account to another company and did not keep any records as required by 24-A M.R.S.A. § 1474. Bureau staff was not provided access to those nine (9) paper files. Therefore, all conclusions pertaining to those claims are based only on the Company’s electronic financial records and the Board’s records.
A. Company Operations/Management Standard 7
Findings: Records of nine (9) claimants from one employer were not retained pursuant to 24-A M.R.S.A. § 1474
Original claims files were sent to the Bureau instead of the requested copies
Observations: The examiner advised the Company of the above referenced section. The Company’s response was that “we no longer have those files”, and they were returned to the employer.
In addition, the examiner advised the Company of the Bureau’s concern about the receipt of original claim files for examination. The Company’s response was “there is only one file that is active” and “we should have the information needed to move forward”.
Recommendations: It is recommended that the Company implement certain policies and procedures to ensure that the Maine statutes, rules and regulations governing record retention requirements are followed.
The timely cooperation and the professionalism of its management team is acknowledged with appreciation
Verify the timeliness of the initial indemnity payments made in accordance with 39-A M.R.S.A. § 205(2). Bureau staff tested the six (6) workers’ compensation claims that had an initial indemnity payment made.
Verify the timeliness of subsequent indemnity payments made in accordance with 39-A M.R.S.A. § 205(2). Bureau staff tested the four (4) workers’ compensation claims that had one or more subsequent indemnity payments made.
Verify the timeliness of health care providers’ payments in accordance with WCB Rule 5.7(2). Bureau staff tested the thirty-three (32) workers’ compensation claims that had one or more payments made to health care providers.
The Company’s compliance rate for initial indemnity payments is 67%, which is below the WCB’s performance benchmark of 87%.
While the WCB does not have performance benchmarks for the subsequent indemnity payment and payments to health care providers, the above levels are acceptable.
Recommendations: It is recommended that the Company implement certain policies and procedures to ensure that claims adjusters are aware of the Maine statutes, rules and regulations governing the initial indemnity payment.
Verify the timely filing of the following forms with the WCB in accordance with 39-A M.R.S.A. § 360 (1) (A) or (B) and WCB Rules and Regulations as follows:
WCB-1, First Report of Occupational Injury or Disease
39-A M.R.S.A. Section 303, Rules & Regs, Ch 8 Section 13,
Rules & Regs, Ch 3 Section 4
39-A M.R.S.A. Section 303
WCB-2A, Schedule of Dependents and Filing Status
Rules & Regs, Ch 1 Section 1.1,
Rules & Regs, Ch 1 Section 1.3,
39-A M.R.S.A. Section 205(7),
Rules & Regs, Ch 8 Section 12
Rules & Regs, Ch 8 Section 11, Rules & Regs, Ch 8 Section 12
Rules & Regs, Ch 1 Section 1.1
WCB-11, Statement of Compensation Paid Rules & Regs, Ch 8 Section 1,
within 7 days of ER notice
within 30 days of ER notice
within 14 days of ER notice
WCB-11 Interim/ Final
15 days of anniversary date and as a Final Report when no further payments are anticipated
Findings: The Company’s compliance rate for First Report of Occupational Injury or Disease (WCB-1) filings is 29%, which is below the WCB’s performance benchmark of 85%.
The Company’s compliance rate for Memorandum of Payment filings is 83%, which is below the WCB’s performance benchmark of 85%.
The Company’s compliance rate for Notice of Controversy filings is 50%, which is below the WCB’s performance benchmark of 90%.
While the WCB does not have performance benchmarks for the WCB-2, WCB-2A, and WCB-11(Initial, Interim and Final), the above levels are not acceptable.
The Company did not distribute the WCB-2, WCB-2A and WCB-11 forms properly.
Observations: The examiner advised the Company of the inadequate distribution of the WCB-2, WCB-2A and WCB-11 forms. The Company’s response was that “this was an oversite [sic]” and provided a Corrective Action Plan (CAP), “effective immediately”.
Recommendations: It is recommended that the Company implement policies and procedures to ensure that claims adjusters understand the Maine statutes, rules and regulations governing the WCB form filing requirements and that the managers monitor the CAP and adjusters’ performance regularly to ensure compliance.
Claims are accurately paid.
Verify that payments are calculated correctly in accordance with 39-A M.R.S.A. § 212, § 213 and § 215. The Bureau staff tested the six (6) workers’ compensation claims that had one or more indemnity payments made.
Indemnity Paid 5
While the WCB does not have performance benchmarks for the accuracy of indemnity paid, the above level appears to be acceptable.
Observations: The examiner advised the Company of the one claim where the indemnity was calculated incorrectly. The adjuster did not consider the 7-day wait, which resulted in an overpaid claim.
Recommendations: It is recommended that the Company implement policies and procedures to ensure that claims adjusters understand the Maine statutes, rules and regulations governing the WCB calculations for indemnity paid.
Mary Masi, being duly sworn according to law, deposes and says that in accordance with the authority vested in her by Eric A. Cioppa, Acting Superintendent of Insurance, pursuant to the Insurance Laws of the State of Maine, she has made an examination on the condition and affairs of
of Parsippany, NJ for the period January 1, 2008 through December 31, 2008, and that the foregoing report of examination, subscribed to by her, is true to the best of her knowledge and belief.
Carolee Bisson ________________________________