Commercial Lines Insurance, Fair Housing Homeowners Insurance, and Year 2000 Disputes

Summary: Founded in 1979, the CPR Institute for Dispute Resolution is an international non-profit alliance of 500 global corporations, leading law firms, and legal academics involved in alternative dispute resolution. The CPR institute evolved from the former Center for Public Resources. The organization assists in mediating disputes well beyond the insurance arena and is available to assist with disputes in 25 business areas. More than 800 companies in these 25 disciplines have signed the CPR corporate policy statement on alternatives to litigation on behalf of themselves and their 3,200 domestic operating subsidiaries. By signing the statement, companies agree to explore ADR when in a dispute with another company that has signed. Insurance-related disputes that may be mediated include those involving commercial lines policies, fair housing homeowners insurance, and Year 2000 issues. CPR promotes self-administered negotiation and mediation and maintains panels of distinguished neutrals who are available as mediators. The mediators are organized into national, international, regional, and specialized panels. One of the specialized panels is for insurance disputes. Those using CPR panel mediators may manage the process independently, or they may call upon CPR to manage it. Some of the advantages that CPR representatives cite for mediation are savings in legal fees and litigation expenses; prompt resolution of disputes; creative, business-driven solutions; preservation of business relations; and privacy and confidentiality.

Topics covered:
Types of insurance disputes resolved
Insurance industry dispute resolution commitment
Procedure
Signers
Major disasters
Fair housing claims regarding homeowners insurance
Year 2000 mediation program

Types of Insurance Disputes Resolved

Insurance disputes that are eligible for the CPR resolution process are those that arise between insurers issuing commercial lines policies to the same or related insureds. Disputes involving reinsurers are not eligible, although excess insurers who may be brought into the dispute may be invited and elect to participate. Disputes solely involving personal lines policies are not eligible. Other ineligible coverage lines are pollution, environmental, asbestos, and/or other long-term exposures whether or not they involve commercial lines policies. Disputes involving both commercial and personal lines policies are subject to the commitment.

The entire resolution process is confidential. Any participating insurer may invite the policyholder to participate, but policyholders are not automatically involved.

Insurance Industry Dispute Resolution Commitment

A keynote of the CPR program in the insurance discipline is its insurance industry dispute resolution commitment, commonly called the commitment. Those who sign the commitment agree to try to resolve eligible disputes in good faith through unfacilitated negotiations and, if such negotiations are unsuccessful, through mediation according to the CPR program. The procedure also applies to non-signing policyholders and insurers who agree to participate, as well as to disputes not normally included but which the involved parties voluntarily agree to include.

The commitment is different from the previously mentioned CPR corporate policy statement on alternatives to litigation, which is a general promise to explore the use of ADR. The commitment spells out the process that those signing have agreed to follow.