By signing the CPR Insurance Industry Dispute Resolution Commitment (the "Commitment") an Insurer agrees on behalf of itself and its insurance subsidiaries to attempt to resolve commercial lines coverage disputes with other insurers, with certain exceptions, through confidential negotiation or nonbinding mediation under the auspices of the CPR Insurance Mediation Forum. The following is a summary of the terms of the Commitment. To download a PDF of the Commitment, click here.
Covered Disputes. The Commitment applies to any insurance coverage dispute (as defined) among Insurers (defined to exclude reinsurers) issuing commercial lines policies (as broadly defined) to the same insured, except any pollution, environmental and/or asbestos or other long term exposure related insurance coverage dispute, and except for a dispute solely involving personal lines.
Two Step Procedure. Initially, authorized representatives of the Insurers will negotiate in a good faith effort to resolve the dispute without the assistance of a neutral third party. If the negotiators have not resolved the matter within 45 days of receipt of the Notice of Negotiation, any party may give a Notice of Mediation, whereupon a mediation will take place under the Procedure attached to the Commitment as Appendix B.
Non-Signatory Insurers. Any non-signatory Insurer involved in the dispute will be invited to participate. If the invitation is declined, the procedure will go forward, unless an absent party is indispensable to resolution. (Commitment, Par. B-3.)
Involvement of Policyholders. Any participating Insurer may invite the policyholder to participate, and an Insurer will do so if it considers the policyholder's presence necessary. If the policyholder declines the invitation, the procedure will go forward without the policyholder, unless (a) the latter objects, and (b) an Insurer objects. (Commitment, par. B.4).
Commencing Litigation. A party may commence legal action and may defend any lawsuit, but despite such action the parties will continue to participate in good faith in the specified procedures. (Commitment, Par. B.5).
Mediation Procedure. Attached to the Commitment as Appendix B is the Procedure for Insurance Dispute Resolution which provides that the entire process is confidential, spells out the procedure for selection of a mediator with the assistance of CPR, and stipulates the ground rules of the mediation. Any party may terminate the procedure 90 days after selection of the mediator if the dispute remains unresolved. A form of notice is attached to the Procedure.
Miscellaneous. No party waives any rights by participating in the procedures. In the event of a conflict between the Commitment and contractual dispute resolution provisions between the parties, the latter will govern. Any signatory may terminate its Commitment on 90 days' written notice to CPR. The Commitment creates no rights in third parties.
Insurance Panel. CPR has organized an Insurance Panel, consisting of attorneys with extensive insurance experience and of active and recently retired senior insurance executives, who will be available to serve as mediators.
Supervisory Board Each signatory of the Commitment has appointed a senior executive as its ADR Executive. The ADR Executives constitute the Board of Supervisors which oversees and guides the operation of the CPR Insurance Mediation Forum.