Connecticut’s New Catastrophe Mediation Program Bill Now In Effect
Friday, October, 11, 2013
A new mediation bill was signed into law in the State of Connecticut by Connecticut Governor Dannel Malloy. Known as Public Act 13-148, the law, which went into effect October 1st, allows the state’s insurance department to put into place a mediation program that will run state-wide and be used to settle insurance disputes over claims involving catastrophic events. The law stipulates that claims handled by the state mediation program must be claims that occur during or following a proclaimed “state of emergency.”
Claims that can be mediated under the program’s umbrella are personal risk policies, condominium association master policies, and condominium unit owners’ association property insurance policies. Private passenger non-auto claims are not included in the program. The program’s main purpose is to assist when there is a discrepancy of value claims on items that have been lost or damaged and the value is more than $5,000.
According to the details of the law, all insurers who are licensed to provide insurance in the state must participate and pay the mediation fee to the mediation provider within 10 business days after it receives an invoice from said provider. Beyond this standard requirement, the insurer will not be held responsible for other costs incurred by the insured, including attorney or public adjuster costs. The law also stipulates that if mediation fails, the policy holder retains the right to pursue other legal settlement through arbitration or litigation unless he or she willingly gives up this right through a settlement reached in mediation.
Public Act No. 13-138 also requires that if a public adjuster is used, there must be an employment contract signed between the policy holder and the public adjuster. On this contract, the terms of the cancellation of the contract must be clearly stated and displayed on the front page of the contract in font that is no smaller than 12-point, boldface type.