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COMPENSATION RECOVERY PROCEDURE CHANGES MAY INCREASE COSTS

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Local government insurer Zurich Municipal is warning local authorities of the significant impact on the cost of com...
Local government insurer Zurich Municipal is warning local authorities of the significant impact on the cost of compensation for injuries that will arise due to changes to the rules governing the procedures of the DSS Compensation Recovery Unit (CRU), taking effect from 6th October this year.

The change, which removes the old arrangement whereby the CRU would not claw back benefits in respect of injury claims settled at o2,500 or less, will have its most immediate impact on those authorities that carry a significant deductible and, therefore, self-fund the majority of their own injury costs.

As this amendment applies to settlements on or after the 6th October - not injuries occurring after that date - it is essential that every case of injury outstanding is revisited and the reserve or estimate held against it revised. Most revisions will be sharply upward and this will lead to a need to review the overall adequacy of the funds to cope with the higher settlement levels.

John Murray, general manager of Zurich Municipal, said:

'These changes to CRU practice have been the subject of much debate and controversy. Retrospective change offends a natural sense of fair play. It is essential that local authorities are able to manage provision for compensation claims with a reasonable degree of certainty.'
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