Howard’s End: ACC A World Leader?

The Accident Compensation Corporation is publicly claiming to be "a world leader in personal injury insurance" while some of the largest accident and disability insurance companies in America are now receiving multi-million dollar damages awards and fines for wrongly dumping claimants – the same criticism made in NZ against ACC. Maree Howard writes.

Whistleblower's and lawyers in America are revealing to Federal Courts that the disability insurance industry use of a computor system called "Colossus" is gaining momentum throughout the industry which removes the human element and compassion from accident and disability claims settlements and deliberately sets out to dump claimants.

America's largest accident and disability insurance company, UnumProvident, has been hardest hit by damages award and fines with its Chief Executive recently sacked while Insurance Commissioner's across the country investigate further allegations of defrauding claimants.

It has now been revealed by a Seattle Post-Intelligencer newspaper investigation that claims adjusters at Farmers, Allstate and other insurance companies used to have authority to evaluate personal injuries themselves and offer settlements but the insurance companies have latched on tothe "Colossus" computor system to remove the human element of claims settlement.

But even before "Colossus" the newspaper investigations have revealed, through insurance company whistleblowers, that claims managers played hard-ball offering the lowest possible settlement they believed a client would accept.

"An adjuster's success is measured by his negotiating talent" whistleblower Robert Dietz told the newspaper: "There's so much pressure on you to settle for the least amount possible," he said, adding that early in his career he even low-balled a friend.

In New Zealand, the job specifications of ACC case managers requires negotiating skills although claimants wonder why when the entitlements of injured people are supposedly provided by statute in the ACC legislation as assessed to be needed by appropriately qualified and independent assessors.

That ACC is also able to publicly claim to be a "world leader in personal injury insurance" when, according to the legislation, it is not supposed to be an insurance company at all, is now raising eye-brows in both legal and political circles.

Another American disability insurance whistleblower, Christy Klein, has told the Seattle Post-Intelligencer newspaper that both Farmers and Allstate got employees to abandon their scruples by keeping a highly competitive internal environment.

Scores, determined by how much money was paid out, are posted in the office and the companies would offer monthly incentives to pay less with typical incentives being gift certificates or a pizza party for the team, Klein said.

Scoop has seen documents where New Zealand ACC claimants are also being dumped from the scheme before they have received their rehabilitation entitlements forcing claimants to stressful and expensive reviews and appeals and who often end-up on welfare benefits meaning the taxpayer is paying for welfare benefits while at the same time ACC still collects money from the public to rehabilitate injured people who have been dumped.

ACC Minister Ruth Dyson has signed a specific agreement with ACC to "exit" 1500 claimants this year.

ACC Claimant's say it is the worst scam of taxation/levies double-dipping they have come across which is obviously supported by the Government because ACC is a Crown entity and its Minister has an agreement to rid ACC of 1500 claimants.

Klein also told the American newspaper, "We were supposed to get you back where you belong, but we kept their lives in ruin for such small things."

Klein and Dietz say they are not proud of their behaviour but the "Colossus" computer system made them worse.

Farmers insurance started using "Colossus" nationwide in March 2000. A couple of months later the company asked Computer Sciences Corp, the Californian company that licenses Colossus to modify the program to suit its own needs. They called the modification program "tuning."

Deitz said when he came back from the Colossus "tuning" workshop he was instructed to get people in the company excited about it. "A couple of months later we all discovered that "Colossus" had become the authority to settle claims."

Despite a career built around offering less-than-fair settlements, Deitz said the Colossus values he was forced to offer were "disgusting to me, it was humiliating."

Just how humiliating and stressful it was for his claimants is now being shown by the multi-million dollar awards and fines being made against American accident and disability insurance companies.

In New Zealand Scoop is aware of one major misfeasance case lodged against ACC and eight of its former and current case managers in the High Court with the lawyer claiming that ACC is operating parallel to American insurance companies.

He was not shocked when Scoop told him that ACC was publicly claiming to be "a world leader in personal injury insurance" and that ACC planned to have more than $5 billion invested by 2005.

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