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WEST PALM BEACH, Fla. – While credit unions are still reeling from the September 11 tragedy, the business of paying claims plays a huge role in helping shell-shocked New Yorkers get back on track. As hundreds of firemen, police and volunteers dig through the smoking hole that was the World Trade Center, insurance companies – including those serving damaged CUs – are also doing their part for the recovery effort. St. Paul-based Minnesota Life Insurance Company estimates claims from the terrorist attacks will total between $5 million and $10 million. “We expect most of these claims to be covered by reinsurance,” said Robert L. Senkler, chairman, president, and chief executive. “Financially, we are well positioned to handle this extra cost. We are prepared to meet all of our obligations to our customers.” Since day one, CUNA Mutual Group has been busy at ground zero paying claims. “In New York the team consisted of many, but two field staff were particularly instrumental in helping our credit unions with their property, bond and other claims, Corporate Services Account Vice President Willis Reed, and Member Services Account Vice President Jeff Casper,” said CUNA Mutual Group Director of Public Relations Sydney Lindner. “The entire company is proud of their response to this unthinkable situation.” Casper, who was personally touched by the incident losing two neighbors and 30 others from his small community, called headquarters from his cell phone after the attack while en route to meeting with affected credit unions. “I think my feelings run deeper because many of these people are not just clients but friends, and while over 500 CU employees were safely evacuated they may be emotionally damaged forever,” said Casper. “You can’t know how deeply proud and happy I am that we made sure they all received counseling in-house and what we cared about was them. What was most rewarding if such a thing can exist in this type of situation is that I could feel the relief from those I was able to give checks to that day and that we had the tools and used them to help. This has been a life changing experience, and now people here are concentrated on moving forward.” With the exception of Municipal CU, which is in the evacuation zone and has limited access, CUNA Mutual Group has paid all property claims to affected credit unions such as XCEL FCU and FAA Eastern Region FCU and losses have been estimated between $6 million to $10 million. According to Lindner, field representatives and Municipal CU senior staff should be able to get into the credit union to assess the damage sometime soon. In addition, given the total numbers involved, the life portion of claims such as workers compensation, disability and death benefits cannot yet be estimated by CUNA Mutual Group. While insurers deal with the devastation and its effects on their clients they must also balance the looming problem of insurance fraud – later. Given the public scrutiny and skepticism of the industry, experts agree that insurance companies will continue to be under a tremendous amount of public pressure to handle claims as quickly as possible. “Clearly there will be problems with fraud,” said James Quiggle, a spokesman for the Coalition Against Insurance Fraud, a national organization dedicated to fighting fraud. “Insurers are still trying to understand what they are up against, trying to grapple with the amount of losses. Until they get their arms around that, they can’t yet address the fraud.” According to industry experts, given the sheer volume of claims combined with a lack of documentation, lines such as business interruption and workers’ compensation will be two of the hardest hit. According to the Coalition Against Insurance Fraud, insurance fraud comes at the hefty price tag of at least $80 billion annually -an average of $950 per family. From inflating claims, exaggerating physical and emotional disabilities to falsely claiming vehicles were parked near ground zero, the fraud fallout is expected to take many forms. Quiggle agrees that insurance companies have a tough road ahead wrestling with the level of proof needed to settle claims and that they will try to strike a reasonable compromise given the crisis conditions in which they are operating. “When credit union staff have been through a crisis it can be difficult for them to remember credit union policies that safeguard against claim, check and other frauds,” said Lindner. “It is a good idea for credit union leadership to meet with staff who are under stress. Managers can help their teams remember the policies, procedures and other measures that are in place to protect the credit union from fraud. These safeguards are not always top of mind after traumatic events have taken place, a quick reminder can help.” According to Lindner, general CUNA Mutual safeguards against claims fraud include case examiners and a Special Investigations Unit that work with their policyholder credit unions. Lindner also suggests that if credit unions have specific claims fraud concerns or questions they should contact their insurance carrier. “Outlining these activities would be like telling a robber where you’ve hidden the key,” said Lindner. “Being there in times of need for our policyholder credit unions and their members is what we are all about. [email protected]

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