CCP Subrogation Recovery Process 3

Question 1

In a workers' compensation subrogation case, which party typically has the primary right to sue the third-party tortfeasor?

Accepted Answer

The injured employee

Answer

In most states, the injured employee retains the primary right to file a third-party tort action, with the insurer having a lien on any recovery.

Question 2

When a subrogating insurer and the insured jointly pursue a third party and the total recovery is insufficient, how are funds typically allocated under the Made Whole Doctrine?

Accepted Answer

The insured is paid first until made whole, then the insurer receives the remainder

Answer

Under the Made Whole Doctrine, the insured's uncompensated losses must be satisfied before the insurer can recover any subrogation proceeds.

Question 3

Which lien type gives a workers' compensation insurer a legal claim against the proceeds of an employee's third-party settlement?

Accepted Answer

Statutory Lien

Answer

Workers' compensation statutes in most states create a statutory lien giving the carrier rights to third-party settlement proceeds up to the amount of benefits paid.

Question 4

A subrogation demand letter is sent to a tortfeasor's insurer. The insurer fails to respond for 90 days. What is the subrogating insurer's best next step?

Accepted Answer

File a lawsuit before the statute of limitations expires

Answer

The subrogating insurer should file suit to protect its rights because a demand letter does not typically toll the statute of limitations.

Question 5

What is 'voluntary payment defense' as used by tortfeasors in subrogation disputes?

Accepted Answer

Argument that the insurer paid without legal obligation, defeating subrogation

Answer

The voluntary payment defense argues the insurer paid the claim without being legally obligated to do so, which can defeat subrogation rights in some jurisdictions.

(CCP) Certified Claims Professional Practice Test

(CCP) Certified Claims Professional Practice Test

CCP Subrogation Recovery Process 3