Celebrating 50 Years of New York No-fault: A Conversation with AAA’s Maureen Kurdziel, Zarah Monterrosa and Bridget McCormack
By Kendal Enz
The American Arbitration Association’s® (AAA®) New York No-fault Insurance Program marks its 50th anniversary this year. To celebrate this milestone, we sat down with Maureen Kurdziel, AAA senior vice president of dispute resolution services, Zarah Monterrosa, AAA vice president of the New York State Insurance Division, and Bridget McCormack, AAA president and CEO, to discuss the program’s history, evolution and future. This interview is part of an ongoing series on technological innovation at the AAA, where we spotlight how our team leverages emerging technologies to overcome complex challenges and enhance our operations.
Q: Can you tell us about creating the New York No-fault Program?
Zarah Monterrosa: The New York No-fault Program was established to address economic losses for individuals injured in automobile accidents, regardless of who was at fault. It aims to provide immediate help for medical costs and cover lost wages without out-of-pocket costs, ensuring quick assistance for the injured.
Q: When did you both join the New York No-fault team?
Maureen Kurdziel: I opened the New York Insurance ADR Center on December 1, 1999.
Zarah Monterrosa: I joined shortly after, in 2003.
Q: The program started in 1974. Can you elaborate on its early days?
Maureen Kurdziel: Initially, the program involved arbitration by the Insurance Department Arbitration (IDA) forum, and if cases couldn’t be settled there, they were moved to the AAA for arbitration. In 1988, three arbitration forums were established for different issue types. The AAA handled policy issues, the Workers’ Compensation Board managed medical necessity issues under the Health Services Administration, where doctors decided on the medical necessity of a case, and the IDA managed fee-schedule issues. That year, the Department of Financial Services (DFS) appointed a full-time panel of arbitrators to serve at the pleasure of the superintendent, which we now know as the formal No-Fault Arbitrator Panel. By 1999, having multiple forums made it difficult for decisions to be made on cases with multiple issues. Therefore, the DFS eliminated the IDA, and on December 1, 1999, the AAA opened the New York Insurance ADR Center, introducing a two-part process—conciliation and arbitration.
Multiple offices handled regional arbitrations, and the arbitrator panel was much smaller, consisting of about 50 members.
Q: What was it like handling cases in the early days?
Maureen Kurdziel: Very manual. Everything was done on paper, with trucks backing up to the building’s cargo bay, delivering boxes of feet-deep files. We used certified mail to send the arbitrators all the case files. It was a lot of paperwork!
A picture of Zarah standing next to a stack of files twice her size against the wall is floating around somewhere.
Q. How many cases were you handling at this time?
Maureen Kurdziel: Between 2000 and 2001, we appointed 100 arbitrators because our caseload had been growing. We went from 35,000 cases to 100,000 cases in a year.
Zarah Monterrosa: We’re now at about 175 arbitrators.
Q: How has the case handling process evolved over the years?
Maureen Kurdziel: Technology has been a game-changer. In 2003, we introduced the Electronic Case Folder (ECF), transitioning from paper to digital files. It took a few years for the parties to be comfortable with the electronic system, but at this point, they’ve embraced it and are looking for more software enhancements.
Zarah Monterrosa: Let’s talk about the evolution to online awards. The arbitrators used to send awards to us by typing them on paper; one specific arbitrator used to send handwritten awards back then. As the volume grew, we graduated from paper to email and then to an online awards program. We even introduced the redacted awards search. It was fun to train the arbitrators, I’ll tell you. At first, they were resistant to change, as most people usually are, but now we are at a point where the tide has turned, and current panelists and the new wave of panelists have embraced technology. They are even asking for AI.
Maureen Kurdziel: Moving online has significantly improved our compliance with regulations. Each document comes with strict deadlines. Once an arbitrator signs the award, the carrier must pay it within 30 days. Previously, the award had to be mailed to us, and we would then send it to the relevant party, consuming valuable time. In contrast, signing and uploading the award online allows instant viewing. This shift to online awards gives customers more time to meet regulatory requirements.
Q: Can you explain the Online Settlement Tool and how it works?
Zarah Monterrosa: The settlement tool allows parties to make offers and counteroffers online, facilitating back-and-forth negotiations. It has made the settlement process transparent and efficient, changing how users interact with our system. When we introduced the tool in 2016, parties went from relying on our case management staff for all administrative tasks to having all these online self-service options.
Q: Before the online tool, how were settlements negotiated?
Maureen Kurdziel: Settlements were handled directly by the parties, often with the assistance of a conciliator. However, as the caseload grew, this approach became unsustainable, leading to the development of the Online Settlement Tool.
Initially, you could only make the offer through the Online Settlement Tool. Through feedback from the parties, we eventually added the ability to make counteroffers and set time limits to respond to offers.
Then, we started doing “settlement days.” This approach worked for some people, but bringing staff into New York away from their office was not ideal. We tested bringing in professional mediators, which worked for some but not for others. Ultimately, we landed on using technology and data analysis. By examining past results on similar cases—whether they settled, lost or won in arbitration—we could discuss outcomes on a broader level.
Getting the parties on board, particularly the carriers, who initially resisted, took time. They didn’t buy into it until we presented them with the data. The more we leveraged analytics, the more we could change behavior. That’s when we began to see a significant increase in the use of the Online Settlement Tool. We also observed many cases being resolved through bulk settlements driven by data and analytical insights.
Q: What other technological advancements have been introduced?
Zarah Monterrosa: Automation has been a huge game changer for us. Volume has been our friend but also our foe, as it comes with many challenges. We’ve developed easy-to-use systems to manage this volume effectively, not just for us but also for our users. As a small example, we utilize bots internally and externally with the bulk settlements. Parties send us their lists, and instead of manually entering each one into the online settlement system, we process them overnight using bots. This automation brings significant efficiency to our process and the parties’ operations.
Some parties have even started using bots to manage their own volume, as they often file in large quantities and face similar challenges. These advancements have greatly improved the efficiency of handling high volumes of cases.
Q: Has the use of technology impacted staffing needs?
Maureen Kurdziel: Thanks to automation, we haven’t had to grow our staff at the same rate despite a significant increase in caseloads. We handle around 470,000 cases annually with approximately 225 staff members.
Q: What do you consider the most significant milestone in the evolution of the New York No-fault Program?
Zarah Monterrosa: The opening of the conciliation center and integrating conciliation with arbitration were pivotal. It brought transparency and unified the process under one umbrella.
Maureen Kurdziel: I agree. Additionally, the engagement of system users in adopting technology has been crucial. It’s almost a partnership now, with users contributing to the improvement of the system.
Q: How do you envision the future of the New York No-fault Program, especially regarding technology?
Maureen Kurdziel: Predictive analytics and artificial intelligence (AI) will play significant roles. By leveraging data, we can help parties avoid disputes and focus on delivering justice efficiently.
Zarah Monterrosa: Data insights will continue to drive decisions. We’re looking to expand our data portal for external users, allowing them to make informed decisions based on comprehensive data analysis.
Q: Bridget, you’ve been with the AAA for over a year. What are your thoughts on the New York No-fault Program and its evolution?
Bridget McCormack: I didn’t know a lot about the New York No-fault Program when I joined the AAA and was stunned and excited by everything the team was doing. The program’s lasting success is owed to the team’s ability to adapt and evolve with technological advancements. The smooth transition from paper-based processes to a fully digital system is a testament to Maureen’s, Zarah’s and the rest of the leadership team’s forward-thinking approach. I’m excited to support their constant innovation to enhance our service delivery and efficiency.
Q: Is there anything else you’d like to add?
Maureen Kurdziel: We’re proud of our progress and are excited about future innovations that will continue to improve the program.
Zarah Monterrosa: Absolutely. The evolution of the New York No-fault Program has been remarkable, and we’re committed to further enhancing its efficiency and effectiveness.
Bridget McCormack: Amen. Our ability to leverage technology to streamline our processes is impressive. I’m enthusiastic about the potential for AI and predictive analytics to transform the program further, making dispute resolution faster and more accurate.
Conclusion
The 50th anniversary of the New York No-fault Insurance Program marks a significant milestone for the AAA. The program’s journey from manual, paper-based processes to a technology-driven system highlights the remarkable progress in improving efficiency and service quality. The dedication of Maureen Kurdziel, Zarah Monterrosa and the rest of the New York No-fault executive team has been instrumental in driving these advancements. The American Arbitration Association remains committed to delivering swift, effective dispute resolution as the program evolves, leveraging predictive analytics and AI. The future looks promising, with ongoing innovations to enhance the program’s effectiveness and efficiency even further.