WHAT IS THE CORRECT TIMING OF FOLLOW-UP EUO LETTERS?
According to a story in today's New York Law Journal (23 Aug 2012), Queens Civil Court Judge James D'Auguste has asked the Department of Financial Services (former the Insurance Department) for advice on the proper interpretation of one aspect of the No-Fault regulations.
The question arises when a claimant fails to show for a scheduled examination under oath (EUO), which is a form of claim verification. The Regulations require that a second verification request (also called a follow up request) be sent not less than 30 days and not more than 40 days after the first request, if the requested verification has not been received.
When the verification which is requested consists of documents, the timing is relatively simple: the second request gets sent between 30 and 40 days after the first request.
But the date chosen by the insurer for an EUO may be at any time in relation to when the scheduling letter is sent. While there are no strict rules, 14 days advance notice is generally considered to be the minimum, and there is no maximum. Therefore, a scheduling letter sent on August 1 can set the EUO date for August 15, or perhaps September 1, or maybe even October 1.
The question presented by Judge D'Auguste, then, is this: assuming the claimant does not show up, does the 30 to 40 day window for the second request get measured from the date of the no-show? Or from the date of the first scheduling letter? This is the question to be answered by the DFS.
In my own opinion, logic and reason would seem to dictate that the measuring point is the date of the no-show. Otherwise, anomalous situations can develop; for example, the due date for the second request may fall before the scheduled euo date -- or long after.
In addition, let's assume the scheduled euo date is 14 days from the date of the letter. Even if the witness does not show up on the scheduled date, he could theoretically show up two weeks later and still be within 30 days from the date of the letter (and therefore, in compliance).
Another potential problem with using the date of the first letter as the measuring point is that, if the scheduled date is more than 30 days from the date of the letter, the insurer may 'blow' the time limit for the second letter before the no-show even occurs.
The regulations themselves do not provide a solution. The 30-40 day window for second requests makes no provision for the wide variation in possible euo dates. Therefore an insurer may find itself on the horns of a dilemma: if it sends out the second request before the no-show, it may be invalid; but if it sends out the second request right after the no-show, it may be too late (going by the 30-40 day window in the regs).
There is one possible solution to this dilemma: insurers can schedule the first EUO for exactly 30 days after the date of the scheduling letter. That way, the no-show (if it occurs) will occur on "day 30," giving the insurer a 10-day window to send the second request. This would be using the time frame for verification requests as the template for the timing of the EUO.
Until or unless the DFS issues an opinion, I recommend using the template method.