Invented by Shawn M. Call, Jaime Skaggs, Eric Bellas, Douglas A. Graff, William J. Leise, Vicki King, Jacob J. Alt, Eric R. Moore, Stacie A. McCullough, State Farm Mutual Automobile Insurance Co
The State Farm Mutual Automobile Insurance Co invention works as followsA shared ledger, operated by a network of participants in accordance with a set consensus rules, manages and settles subrogation disputes between a claimant and a defendant through arbitration. The parties to the claim send evidence about the value of their subrogation claims to the shared ledger, for example by sending data to an embedded smart contract. Parties to a claim can request arbitration, particularly if attempts to settle a claim between two parties on-chain have failed. Arbitrators may ask for evidence and/or responses from parties in order to accept damage calculations or settlement offers. The arbitrator can release the funds to the winning party, or accept confirmation of any payments made off-chain.
Background for Blockchain Subrogation Claims with Arbitration
When an insured person experiences a covered loss an insurer can pay the costs and seek subrogation against another party who was involved in the loss. If, for example, an insured vehicle is in a collision, and the owner suffers a loss as a result, the insurer can compensate him according to the insurance contract. The insurer can pursue damages against another party if, for instance, the vehicle owner is not at fault. In an insurance contract, an insured may be required to transfer their claim against the party responsible to the insurer. The insurer can then collect the claim for the insured.
Subrogation payments can be complicated and lengthy to settle. The different parties (e.g. parties at fault in an accident, owners of vehicles, insurers etc.) To determine who was at fault, it may be necessary to exchange information about the collision. Information about the parties involved in a claim, forensic data about the claim, vehicle data, etc., are all sources of information that can be used to determine fault and/or receive a subrogation payment. Information from different sources must be verified and shared by the various parties, including that held by insurers, parties involved in losses, and third-party information (e.g. independent contractors, government entities, etc .).
The parties (e.g. insurers) to a subrogation payments can make proposals to each other to settle the claim. The proposal can include an accounting for damages, like the cost to a vehicle owner who had their vehicle damaged. In the event that an insured person was injured in a collision and had to seek medical attention, their health care costs could be included in an accounting of damages. Subrogation claims can be assessed by independent third parties, for example an automotive repair service provider authorized to provide estimates of repair costs. The parties will need to agree on a settlement amount and accept or reject the damages calculation. The parties may hire a third party to help with subrogation negotiation and resolution.
If the parties cannot resolve the dispute themselves, the dispute can be resolved in another way. The parties could, for example, submit the dispute to arbitration in front of an arbitrator. Parties may agree to arbitrate a dispute based on the qualifications of the arbitrator. Arbitrators can request information from parties and decide disputes on damages liability, damages calculation or damages calculations. The parties may choose to withdraw from arbitration in some cases and pursue resolution of their subrogation claims in another forum, such as a court.
A shared ledger, operated by a network of participants in accordance with a set consensus rules, manages and settles subrogation disputes between a claimant and a defendant through arbitration. The parties to the claim send evidence about the value of their subrogation claims to the shared ledger, for example by sending data to an embedded smart contract. Parties to a claim can request arbitration, particularly if attempts to settle a claim between two parties on-chain have failed. Arbitrators may ask for evidence and/or responses from parties in order to accept damage calculations or settlement offers. The arbitrator can release the funds to the winning party, or accept confirmation of any payments made off-chain.
In one aspect, it may be possible to provide a computer-implemented subrogation settlement method using a shared ledger. This method can include: via one or multiple processors, servers and/or transceivers, (1) paying a claim for an insured loss to an insured; (2) generating an electronically subrogation claims; (3) deploying an electronic claim to a ledger with the following information: (a), identifying the subrogation defendant; (b), including the insured loss and/or (c), including a demand for arbitration; (4) broadcasting a update to the electronic claim deployed to the ledger; and/or, (5) receiving a settlement payment after settling the a The method can include other, less or alternative actions, such as those described elsewhere.
A validating network node may be provided in another aspect. The node can include (1) a transceiver configured for exchanging shared ledger information with peer network peers, including subrogation claims transactions and demands for arbitration, (2) a storage medium configured to store copies of the ledger, (3) a transaction validater configured to apply consensus rules to data shared by peer network members, where the transaction validator is further configured to add data shared from peer network members to the copy shared ledger when the data meets the consensus rules. The node can include more, less or alternative functionality, such as that described elsewhere in this document.
In another aspect, an automated method for settling a claim of subrogation by using a shared ledger is provided. This method can include: via one or multiple processors, servers and/or transceivers, (1) monitoring a Blockchain for an indication that a Subrogation Claim has been made, with the subrogation identifying a: subrogation claiming party, (b), evidence of an insured loss and (c), a demand to arbitrate subrogation claims; (2) determining if the proof of insured loss meets an acceptance condition, (3) broadcasting an indication to a network of blockchains of acceptance if the The method can include other, less or alternative actions, such as those described elsewhere.
This summary is intended to provide a simplified version of a number of concepts that are described further in the Detailed Descriptions. This summary does not aim to identify the key features or essential elements of the claimed object matter. Nor is it meant to be used as a tool to limit the scope.
The following description and illustration of the preferred aspects will make the advantages more obvious to those with ordinary knowledge of the art. The present aspects can be modified in many ways. The drawings and descriptions are intended to be used as illustrations and not as a guide.
Traditionally, businesses and customers as well as central authorities involved in subrogation claims have stored data and records related to transactions in databases or ledgers. These databases and ledgers, which are often held by participants, must be reconciled in order to reach consensus on the validity of information contained therein. A central authority can be in charge of determining the validity and establishing consensus among interested parties. This could include a deed recorder, asset exchange or other central authority.
A blockchain” (also known as a distributed or shared ledger in this context) is a method of reaching a consensus among participants and observers on the validity of the information contained within the chain. The blockchain, in other words provides decentralized trust for participants and observers. A blockchain, which is decentralized and does not rely on a central authority to maintain the ledger’s transactional records is a database where each peer is responsible for validating these changes. The distributed ledger consists of groups of transactions that are organized into a “block.” The blocks are ordered in a sequential order (hence the name ‘blockchain’). Nodes can join and leave the network at any time, and they may receive blocks propagated by peer nodes while the node is gone. Nodes can exchange addresses with other nodes to help propagate new information in a peer-to-peer, decentralized manner.
The nodes who share the ledger are referred to as the distributed ledger. The distributed ledger nodes validate changes made to the blockchain according to consensus rules (e.g. when a transaction or block is created). Consensus rules are based on the information that is tracked by the blockchain, and can include rules about the chain. A consensus rule could, for example, require that the person who initiates a change provide a proof of identity so that only authorized entities can make changes to the blockchain. A consensus rule can require blocks and transactions to adhere to certain format requirements and provide meta information about the change (e.g. blocks must not exceed a specific size, transactions must have a specified number of fields). Consensus rules can include a mechanism that determines the order of adding new blocks to the chain.
Additions that comply with the consensus rules to the blockchain are propagated by nodes who have validated that addition to other nodes the validating node knows about. The distributed ledger will reflect the change if all the nodes receiving the change validate it. Validating nodes will ignore any change that doesn’t satisfy the consensus rule and it won’t be propagated to the other nodes. Contrary to a traditional system that relies on a central authority for its administration, a single entity cannot unilaterally change the distributed ledger, unless it can do so by following the consensus rules. Blockchains are described as immutable, trusted and secure because they cannot be altered. A decentralized blockchain can disintermediate third party intermediaries that assist in the resolution subrogation claims.
The validation activities performed by nodes that apply consensus rules to a blockchain can take many forms. In one implementation, a blockchain can be seen as a shared sheet that tracks information such as asset ownership. In a second implementation, validating nodes run code from’smart contracts’. Distributed consensus is the result of network nodes agreeing to the outputs of the code executed.
Other blockchains are private (e.g., permissioned ledgers) that keep chain data private among a group of entities authorized to participate in the blockchain network. Some blockchains (e.g. permissioned ledgers), keep chain data confidential among a small group of authorized participants in the blockchain network.
The present embodiments are systems and methods that use a blockchain for recording and managing information related to the resolution of a claim of subrogation (e.g. a “subrogation” blockchain). blockchain). The subrogation ledger may be public or private.
Exemplary shared ledger for resolving subrogation claims with arbitration
FIG. According to one aspect of this disclosure, FIG. 1 shows an exemplary shared ledger 100 for resolving claims for subrogation with arbitration. An insured party such as an owner of a not-at fault vehicle 104 who experiences a covered claim, for example, in a collision with an at-fault car 102, may submit an insurance request 110 to an insurer. The insurer 106 could be contractually obligated to pay a payment of 112 to owner of the vehicle that is not at fault in exchange for the assignment of any claims the owner has against the operator or owner of vehicle 102.
After the insurer 106 receives assignment of vehicle owner’s claim to owner or operator at fault vehicle 102 and has made payment 112, the insurer 106 can initiate a management and resolution process for the legal claim (e.g. a subrogation) against the at fault vehicle owner or operator 102. The shared ledger 100 includes a Blockchain 118 that is accessible to network participants through a network (e.g. a public or private packet switched network). The blockchain subrogation claims resolution process begins when the insurer 106 broadcasts the subrogation transaction or claim 114 on the blockchain 118.
The blockchain 118 could be a network in which participating nodes validate updates to a shared ledger on the basis of transactions broadcasted by other network members. The subrogation claim may be included in the transaction 114 and other transactions disclosed. This information may change if subsequent transactions are broadcast over the network. In another implementation validators on the network 118 are configured in order to maintain a database of state and execute code within smart contracts deployed by participants.
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