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Alliance Urges Caution on Coding Requirements of IL Mold Rule
Property and Casualty
December 18, 2002
Downers Grove, IL -- A bulletin recently filed by the Illinois Department of
Insurance concerning mold will create burdensome reporting requirements for
insurers that will result in imprecise data, according to the Alliance of
American Insurers.
The bulletin outlines the department's requirements for insurers to file and use
mold-related exclusions and limitations and requires insurers to maintain and
track all mold-related claims and to make the information available to the
department upon request.
"The Alliance opposes any new governmental requirements for insurers to
specially code, capture and quantify mold losses," said Kirk Hansen, Alliance
director of claims. "Insurers face a unique problem of identifying what mold
claims are. Though most insurers code claims to denote water damage, few
insurers currently have the ability to record the existence of mold. Even if
insurers generally coded for mold, the data collected would be questionable at
best."
Typically, insurers enter coding for claims upon their receipt and initial
set-up, Hansen explained. "Though most mold claims result from water damage
claims, the mold is rarely reported or claimed by the insured with the initial
report. The initial coding, therefore, would not capture a significant
percentage of mold claims," he said.
The Alliance of American Insurers, based in Downers Grove, Illinois, is a
national trade association representing 340 property/casualty insurance
companies.
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