DEPARTMENT OF ENVIRONMENTAL PROTECTION BUREAU OF MINING PROGRAMS

Transcription

1 DEPARTMENT OF ENVIRONMENTAL PROTECTION BUREAU OF MINING PROGRAMS DOCUMENT NUMBER: TITLE: Damage Claim Processing EFFECTIVE DATE: November 3, 1997 AUTHORITY: The Coal and Clay Mine Subsidence Insurance Act of August 23, 1961, (P.L. 1068, No. 484) (52 P.S ) and 25 Pa. Code Chapter 401 POLICY: The Department of Environmental Protection (Department) will provide timely and efficient processing of all Mine Subsidence Insurance (MSI) damage claims. PURPOSE: The guidance in this document is to be followed to ensure the thorough, effective, efficient, and economical processing of damage claims and ensure that valid claims are paid. APPLICABILITY: This document applies to the processing of all MSI damage claims. DISCLAIMER: The policies and procedures outlined in this guidance document are intended to supplement existing requirements. Nothing in the policies or procedures shall affect regulatory requirements. The policies and procedures herein are not an adjudication or a regulation. There is no intent on the part of the Department to give these rules that weight or deference. This document establishes the framework, within which the Department shall exercise its administrative discretion in the future. The Department reserves the discretion to deviate from this policy statement if circumstances warrant. PAGE LENGTH: 7 LOCATION: Vol. 12, Tab 93b (BMP/PGM Section VI, Part 02, Subpart 01) / November 3, 1997 / Page 1

2 DEFINITIONS: Authorized Damages - A list of damages that the Department has determined must be repaired and instructions detailing the method and degree of repair. BAMR - Bureau of Abandoned Mine Reclamation BDMO - Bureau of District Mining Operations BMP - Bureau of Mining Programs Bids - Cost estimates submitted by building contractors that detail the costs to repair the authorized damages. Claimant - A policyholder who has submitted to the Department a completed Damage Claim Notice listing all observed damages. Damage Claim Notice - A document that provides information about the damages being claimed. Department - Department of Environmental Protection Emergency Authorizations - Work approved by the MSI Fund to stabilize a structure and prevent or minimize further damage. Estimate(s) - Cost estimate(s) prepared by the Department that detail the costs to repair the authorized damages. Investigator - An employee of the Department assigned to gather information and make determinations about a mine subsidence claim. Life of the Policy - The time between the date of policy issuance and the current expiration date of the policy. MSI - Mine Subsidence Insurance OSM - Federal Office of Surface Mining Sworn Statement of Loss - An agreement signed by the claimant that establishes the terms and conditions of settlement and the settlement amount for a claim. Unauthorized Damages - A list of damages that are identified in the Damage Claim Notice or identified by the investigator or claimant in subsequent inspections but that are not eligible for MSI compensation / November 3, 1997 / Page 2

3 TECHNICAL GUIDANCE: I. DAMAGE CLAIM INVESTIGATIONS A. Damage Claim Notification When a claimant notifies the Department of alleged damages to an insured structure, the Department will mail a damage claim notice to the claimant. (If the claimant indicates that an emergency situation exists, or if the Department believes an emergency exists based on the description of damages, immediate actions may be taken by the Department to expedite the processing of the claim.) B. Emergency Authorizations If the Department determines or deems that the claim is valid (see I.C.), and that the nature of the damages constitutes an emergency, the following procedures should be implemented immediately: 1. The Department will authorize actions to be taken to protect the insured structure from further damages. 2. The claimant must immediately obtain a bid from a building contractor to perform the actions specified by the Department. 3. The Department will estimate the cost to perform the specified actions and adjust the bid, if necessary. 4. A sworn statement of loss will be prepared by the Department and signed by the claimant. 5. Claim payment documents will be submitted by the Department for immediate processing by the Treasury Department. 6. The cost for the emergency actions will be deducted from the final claim settlement. The policy deductible will not be subtracted from the amount to perform the emergency actions; however, it will be subtracted from the final claim settlement. C. Claim Validity Determination Upon receipt of the claimant s completed damage claim notice, the Department will assign an investigator to determine the validity of the claim. In order for a claim to be valid, the investigator must conclude that the damages are not subject to any policy exclusions, the damages occurred during the life of the policy (time between the date of policy issuance and the current expiration date of the policy), and that the damages were caused by mine subsidence / November 3, 1997 / Page 3

4 1. Exclusions from Coverage The investigator must examine the structure and determine whether the claimed damages are subject to any exclusions listed in the Insuring Agreement, prepolicy inspection report including photographic documentation, and other documents that may be contained in the policy file. If all the claimed damages are excluded from coverage, the claim will be denied. If there are any damages not excluded from coverage, the investigator must continue the investigation. 2. Damages During The Life Of The Policy The investigator must determine if the claimed damages occurred during the life of the policy. If the investigator determines that the claimed damages did not occur during the life of the policy, the claim will be denied. Otherwise, the investigator must continue the investigation process. In order to make this determination, the investigator must consider information from any of the following sources which might be available: a. MSI database. b. The pre-policy inspection report and photographic documentation. c. Previous MSI claim files for the subject structure, as well as adjacent structures. d. Investigation files from government agencies (OSM, BMP, BDMO, BAMR), and other sources of information that may be discovered to contain information relevant to the investigation. e. Information obtained from the claimant through interviews or any other means. f. Real Estate Disclosure Statements. g. Any other source of information which may serve to establish the past condition of the structure. 3. Damages Caused By Mine Subsidence The investigator must determine whether the claimed damages were caused by mine subsidence. In order to make this determination, the investigator must consider whether the damages and observed conditions in the subject structure and adjacent areas are consistent with expected conditions that would result from a mine subsidence event that might occur with the given underground mining conditions. If they are not, the claim will be denied. D. Claim Investigation Types If the Department determines a claim is valid, the investigator will complete a thorough investigation of the claim. There are three types of claim investigations: routine, complex and indeterminable. Claim investigations are routine when the / November 3, 1997 / Page 4

5 information needed to be gathered is readily available and the conclusions are evident, complex when routine investigatory methods do not result in evident conclusions, and indeterminable when complex investigatory methods fail to provide sufficient evidence for conclusions. 1. Routine Claim Investigations A routine claim investigation will consist of the following: a. Preliminary site research, including underground mining information, prior claim and investigation history, and geologic and soils-related information. b. Claimant interview. c. Structural inspection and analysis. d. Surface reconnaissance. e. A consideration of potentially unstable areas within the mine, and estimated ground movements and structural response if failure should occur within these areas. f. A comparison of estimated ground movements and structural response to actual observed conditions. 2. Complex Claim Investigations If a conclusion cannot be made at the completion of a routine investigation, other efforts should be considered to assist in the collection of data and information for further analysis. Following are examples of additional activities that may be conducted: a. Conducting elevation surveys on the subject structure and/or adjacent structures and surface features. b. Monitoring the structure and/or adjacent structures and surface features to determine the extent, magnitude, and direction of movement, if any. Examples of monitoring include: use of crack gauges; periodic measurements of a structural location and elevation; and comparisons of photographs of damage to one another and to the structure. c. Conducting subsurface exploratory work to identify soils, overburden, and mine conditions, as well as to observe portions of the structure which are below grade. E. Indeterminable Claim Investigations Situations may arise where the Department has completed all reasonable and economically feasible efforts to collect and evaluate information, and mine subsidence is still considered a possible cause of the claimed damages. In these situations, the / November 3, 1997 / Page 5

6 Department will process the claim as if the claimed damages were caused by mine subsidence. F. Damage Claim Reports At the conclusion of all claim investigations, the investigator must prepare a written report which includes a summary of findings, conclusions, and justifications. G. Denied Claims If the Department determines that the claim is not valid based on the criteria in the report, the BDMO will send a copy of the Claim Investigation Report, with a claim denial letter, to the claimant. Subject to an appeal, the claim file will be closed at this stage, and no further action will be taken. H. Informal Appeals If a request is made from a claimant or his representative to re-evaluate a claim decision, the request will be evaluated by the BDMO to determine what further action, if any, should be taken. Unresolved informal appeals may be forwarded to the BMP s MSI Administrator upon the request of the claimant or the BDMO staff. I. Formal Appeals If a formal appeal is filed with the Environmental Hearing Board, the Office of Chief Counsel will coordinate the Department s defense. II. PROCESSING SUPPORTED CLAIMS A. Authorized Damages When the Department has determined that a claim is valid, the BDMO will prepare a list of authorized damages for which the MSI Fund will accept liability. Authorized damages are listed by location within the insured structure; i.e. basement, kitchen, bedroom and other areas of the structure. Damages are also listed by action words to indicate the extent of restoration; i.e., repair, replace, excavate, and provide support. In addition, any claimed damages determined not to be valid must be identified as unauthorized damages. B. Prepare Cost Estimate The BDMO will prepare an itemized estimate of anticipated restoration costs for the authorized damages / November 3, 1997 / Page 6

7 C. Solicit Contractor Bids 1. The claimant is obligated, under the provisions of the insurance policy, to provide the Department with two bids from building contractors for the repair of the authorized damages. 2. Bid Waiver Option D. Adjust Claim The Department may waive the requirement for submission of contractor bids if the estimate is less than $6,000, or if the claimant has demonstrated an unsuccessful good faith effort to obtain the required bids, as determined by the BDMO MSI Program Supervisor. The low bid should be within ten percent of the estimate and contain a list of items comparable to the estimate. If not, the MSI Fund estimate and/or the low contractor s bid must be adjusted so they contain comparable bid items and so the costs are within ten percent of each other. Estimates may be further adjusted for inflation when, through no fault of the claimant, the MSI Fund fails to provide the claimant with a settlement offer within 60 days of the MSI Fund s receipt of the damage claim notice. Subsequent to the settlement offer, other inflation adjustments may be made to the estimate if a claimant is successful in an appeal. E. Data Management and Processing The BDMO must enter all required data specified by the MSI computer processing business rules into the MSI database, and forward all claim processing documents to the BMP, Division of Environmental Analysis and Support, MSI Section (Central Office) for further processing. Central Office will review the file, and make the final claim settlement offer by sending the Sworn Statement Of Loss prepared by the BDMO to the claimant by certified mail. F. Post-Settlement Inspections The Department will conduct inspections to verify that the authorized damages have been repaired in accordance with the settled claim. If the Department determines that either the insured structure was not repaired or the repairs were not made in accordance with the settled claim, the Department may refuse to issue or renew a MSI policy for the structure / November 3, 1997 / Page 7