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In the past, it was a relatively rare occurrence when Child Support agencies collected a payment from an insurance settlement. Child support officials collected monies from insurance claims only after the happenstance of coming upon the knowledge of such claim settlement information provided by the custodial parents or third parties. Often, opportunities to collect from the claim settlement were missed because the claim was paid before a lien or income withholding order could be issued.
The Child Support Lien Network (CSLN) was conceived in and created by the State of Rhode Island as the best way to implement the state’s child support insurance claim intercept law. It was designed, developed and implemented by claims handlers and adjusters from major insurers working together with insurance trade associations, vendors and state officials.
CSLN – Redefining the Public/Private Partnership Model
Before CSLN, it was really about who had the power on an issue when it came to legislation involving P&C insurers. And it was the side with the biggest hammer that usually won. So what was different about the CSLN situation was that even though the state had all the power it didn’t just implement the solution it wanted. Instead, it listened. It listened to a new way of intercepting payments that has become the standard across the country. This form of responsible government led to an increase in corporate responsibility among insurers as over a thousand companies and affiliates decided to participate in CSLN over the past decade. The committed partnership continues today as CSLN maintains a healthy retention rate of 99% for both state and company members that are under no obligation to participate.
Most telling of the impact CSLN has had was a comment made by a retiring insurance trade association representative. He said the success of the child support partnership between government and industry made them rethink and change how they dealt with government. They became more proactive and started to suggest changes and work with legislators before bills were introduced instead of reacting to them later. In short, they began working together more because the child support insurance intercept project showed them it could be advantageous for both sides if they did.
The CSLN partnership model works as it has collected hundreds of millions of dollars in child support while becoming the largest and most successful consortium in the child support community.
Child Support Collection Tools
Since 1996, the US Congress gradually provided state child support officials with a battery of legal and administrative tools that allow them to take extraordinary measures to collect a burgeoning past due child support debt. Several of the measures enacted gave child support agencies the administrative powers to:
How CSLN Works
States combine delinquent child support cases into the CSLN database. The database is matched daily with personal injury and workers compensation claims registered by insurers with the ISO ClaimSearch. CSLN performs quality assurance on the matched data and then alerts the member state. The state and / or CSLN provide follow up enforcement action with insurer. Liens or withholding orders are issued to insurer. Arrears are collected by the state from insurer at time of settlement. Many states opt to let CSLN file the appropriate notices for them.
CSLN Collection Numbers- As of May 2015
How Efficient is CSLN?
The CSLN / ISO interface of a single database of millions of delinquent child support obligors matched daily to millions of claims is much more efficient than individual states making requests to insurers or issuing subpoenas for this information from insurance companies.
How Much Collection Potential Does Insurance Claim Intercept Have?
Obtaining access to all insurance companies’ claimant information has the potential for more than $150 million in annual collections.
How Does CSLN Do It Without More Mandates?
Experience has shown that approximately 3% - 4% of delinquent obligors in this country will match to an insurance claim each year, but the impact on individual insurance companies will be minimal as the CSLN QA process will filter out an additional 1.5% – 2.0% before releasing correct matches to the states.
How is CSLN Getting More Insurers to Participate?
Outreach and education is the key to getting more insurers on board with the CSLN / ISO process. CSLN addressed the following insurers' concerns over the years to increase participation:
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