“Subrogation” isn’t a term most insurance customers know. But according to Framingham’s Insurance Recovery Group, it’s a growing area of the insurance industry, and it’s a specialty the company has cultivated over the past 20 years.

Simply put, subrogation is an action insurers take when they believe another party is responsible for paying out a claim. For example, when a policyholder gets into a car accident that is covered by his insurer, he files a claim, gets paid, and considers the matter closed. But if that accident were another person’s fault, the victim’s insurance company can turn around and recoup that cost from the at-fault driver’s own insurance company. The entire battle is waged behind the scenes, usually solely between two insurers.

IRG mostly specialized in recovering money for workers’ compensation insurers, but this month, the 30-employee company announced it would be widening its scope to include all types of subrogation for auto, workers’ comp and property insurance. Comprised of attorneys and claims experts, the company can examine claims for insurance companies, find cases where the company may not have been liable for an incident and attempt to recover the claim.

David Jollin

Title: CEO, Insurance Recovery Group; Framingham

Age: 64

Experience: 25 years in insurance brokerage, Six years with IRG

Mark Nevils

Title: Senior Vice President, Insurance Recovery Group; Framingham

Age: 42

Experience: 12 years with IRG

So this new division of your company, it’s more like an expansion of something you’ve already been doing?

Jollin: We’ve basically been in the subrogation space, in a narrower field, in a big way for over 20 years. We’ve recovered almost $2 billion for the industry, in an area called second injury [editor’s note: second injury applies to workers compensation, and recovery usually comes out of a state fund dedicated to reimbursing employers or insurers]… But we wanted to bring the experience that we had in second-injury recovery to the broader field, and we’ve been looking for the right team to do that for a number of years. So we were a niche within a niche, but the process, the fundamentals are the same, the concepts are the same.

And how many companies out there do what you do?

Jollin: I’m not sure how many in terms of exact numbers, but let me try to define it for you this way: There’re a lot of large insurance carriers that have in fact started up their own internal subrogation groups. And there are a number of law firms that do it locally, and there’s a few large competitors that we would expect to come up against, that are sort of independent recovery specialists like we are, but not many.

How do you get business? Do you wait for an insurance company to bring up an issue with you and ask you to look into it?

Nevils: We like to do a proactive review. We don’t want to rely on the insurance company to send us files. We’ll take referrals but we’d like to supplement that – we can identify them ourselves and then work them up that way.

How does the process work? Somehow I don’t see this going down in a courtroom.

Nevils: It’s not a courtroom setting … a lot of it goes down to the initial investigation – identification. And after that there’s a lot of building of the case, like you would build any other kind of case. But in this situation you’re not filing with a court, you’re trying to file this with other insurance companies to negotiate with them. But it comes down to making sure the process works well, trying to identify it from day one, really, getting [the case] up and going, and trying to resolve these claims as quickly as possible. So having the attorney background is key, because you’re really trying to put together a document that the other side really can’t say anything to.

How is it judged?

Nevils: In subrogation, it’s usually insurance company versus insurance company, and if you have an issue, you can go into what is called arbitration [editor’s note: arbitration is a legal technique for solving disputes out of court, often more cheaply and quickly].

Jollin: They don’t want to spend a lot of money on litigation itself, they’d rather settle it through arbitration. Which is why we have a nice niche here. We have the lawyers working on the cases right away, not the traditional litigation lawyer with the briefcase in the courtroom. But we have the training, the background to do these cases, work them up and do them efficiently.

Has subrogation always been part of the insurance business?

Jollin: It has boomed in the past 10 years or so. People started realizing they were losing recovery money – they were leaving it on the table. So little by little, these larger companies started to get it, and they started to develop their own internally focused groups … it sort of began to push that whole mentality out into the industry. They weren’t paying attention to it, as much as they should. And then people were saying, ‘Well, if you’re recovering 1 percent, you should be recovering 4 percent.’ And they started to benchmark things and they started to figure it out, so more people realized that they’ve go to be more focused.

Top five biggest Massachusetts victories for the IRG:

• Obtained a $200,000 recovery for a workers’ comp insurer that had paid out $500,000 to the widow of a heart attack victim. IRC recovered money for the insurer from the state second injury fund after establishing that the man’s employer knew he had a pre-existing condition before his heart attack.
• IRC’s litigation group won a case establishing that there is no statute of limitations to file a claim for reimbursement with the Massachusetts Second Injury Fund for claims between 1985 and 1991.
• Recovered $660,000 in second injury funds for claims by a major newspaper.
• Successfully expanded the legal definition of “knowledge” of a pre-existing disease or injury, and proved that high blood pressure qualifies as a pre-existing conditio
• Proved that the Massachusetts Trust Fund owes interest on claims for reimbursement that reach a hearing decision, providing clients an additional $600,000 in recovery.