Patent Issued for Net settlement of subrogation claims using a distributed ledger (USPTO 11461861): State Farm Mutual Automobile Insurance Company

2022 OCT 24 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- State Farm Mutual Automobile Insurance Company (Bloomington, Illinois, United States) has been issued patent number 11461861, according to news reporting originating out of Alexandria, Virginia, by NewsRx editors.

The patent’s inventors are Austin, Edward (Scottsdale, AZ, US), Guthrie, William (Mesa, AZ, US), Haverlah, Sharon Kay (Bulverde, TX, US), Helland, Dustin (Morton, IL, US), Maurer, Ryan (Phoenix, AZ, US), Prasad, Bharat (San Antonio, TX, US), Shackelford-George, Karen Marie (San Antonio, TX, US), Weber, Kyle D. (Gilbert, AZ, US), White, Nolan (Chandler, AZ, US).

This patent was filed on November 18, 2021 and was published online on October 4, 2022.

From the background information supplied by the inventors, news correspondents obtained the following quote: “When an insured person suffers a covered loss, an insurer may pay costs to the insured person and pursue subrogation from another party involved in the loss. For example, if an insured vehicle is involved in a collision and suffers a loss, the insurer may compensate the vehicle owner according to an insurance agreement. If, for example, the vehicle owner was not at fault in the collision, the insurer may pursue damages from another party, such as the insurer of the party who was at fault in the collision. An insurance agreement may include an obligation of an insured to assign the insured’s claim against a party at fault to the insurer, who may then collect on the claim on the insured’s behalf.

“Conventional systems and techniques for facilitating subrogation claim payments between two insurance companies may have numerous drawbacks. For instance, many unnecessary payments may be made between insurance companies. For example, a payment may be made between insurance companies for each subrogation claim. Thus, if Insurance company A owes Insurance company B $1,000 for a first subrogation claim, and Insurance company B owes Insurance company A $1,000 for a second subrogation claim, two payments may still be made between the insurance companies even though the net transfer of money is zero. This results in a very inefficient system. Conventional systems may have additional drawbacks and inefficiencies, as well, such as payment making or exchange, payment and/or claim status tracking, and timeliness deficiencies.”

Supplementing the background information on this patent, NewsRx reporters also obtained the inventors’ summary information for this patent: “This summary is provided to introduce a selection of concepts in a simplified form that are further described in the Detailed Descriptions. This summary is not intended to identify key features or essential features of the claimed subject matter, nor is it intended to be used to limit the scope of the claimed subject matter.

“In one aspect, a computer-implemented method for generating a subrogation net settlement smart contract using a distributed ledger may be provided. The method may include, via one or more processors, servers, and/or associated transceivers: (1) generating a subrogation net settlement smart contract configured to: (i) determine a proof of agreement regarding a net settlement including an aggregation of a plurality of settlements between a first party and a second party to a plurality of subrogation claims over a threshold time period by comparing a first cryptographic hash value provided by the first party to a second cryptographic hash value provided by the second party, and determining that there is proof of agreement in response to determining that the first and second cryptographic hash values match, wherein each of the first and second cryptographic hash values are determined based upon one or more characteristics of the net settlement between the first and second parties over the threshold time period; and (ii) transmit notifications to the first and second parties of the proof of agreement regarding the net settlement to allow the first and second parties to verify terms of the net settlement and provide a single payment for each of the plurality of settlements over the threshold time period; and/or (2) deploying the subrogation net settlement smart contract to a distributed ledger maintained by a plurality of participants in a distributed ledger network. The method may include additional, less, or alternate actions, including those discussed elsewhere herein.

“In another aspect, a computer-implemented method of verifying a net settlement of a plurality of subrogation claims between a first party and a second party using a distributed ledger may be provided. The method may include, via one or more processors, servers, and/or associated transceivers: (1) determining, by a first party, a net settlement amount including an aggregation of a plurality of settlements between the first party and a second party to a plurality of subrogation claims over a threshold time period; (2) generating a first cryptographic hash value based upon one or more characteristics of the net settlement over the threshold time period between the first party and the second party; (3) broadcasting the first cryptographic hash value to a subrogation net settlement smart contract deployed to a distributed ledger and maintained by a plurality of participants in a distributed ledger network as a proof of agreement of the net settlement between the first and second party, wherein the subrogation demand smart contract compares the first cryptographic hash value submitted by the first party to a second cryptographic hash value submitted by the second party to determine if there is a match; (4) receiving a notification from the subrogation net settlement smart contract that the first and second cryptographic hash values match indicating that there is proof of agreement between the first party and second party; and/or (5) in response to receiving the notification, providing a single payment of the net settlement amount to the second party. The method may include additional, less, or alternate actions, including those discussed elsewhere herein.

“In yet another aspect, computer system for verifying a net settlement of a plurality of subrogation claims between a first party and a second party using a distributed ledger may be provided. The computer system may include a network interface, and one or more processors. The computer system may further include a non-transitory computer-readable memory storing instructions thereon, that when executed by the one or more processors, cause the one or more processors to: (1) determine, by a first party, a net settlement amount including an aggregation of a plurality of settlements between the first party and a second party to a plurality of subrogation claims over a threshold time period; (2) generate a first cryptographic hash value based upon one or more characteristics of the net settlement over the threshold time period between the first party and the second party; (3) broadcast, via the network interface, the first cryptographic hash value to a subrogation net settlement smart contract deployed to a distributed ledger and maintained by a plurality of participants in a distributed ledger network as a proof of agreement of the net settlement between the first and second party, wherein the subrogation demand smart contract compares the first cryptographic hash value submitted by the first party to a second cryptographic hash value submitted by the second party to determine if there is a match; (4) receive, via the network interface, a notification from the subrogation net settlement smart contract that the first and second cryptographic hash values match indicating that there is proof of agreement between the first party and second party; and/or (5) in response to receiving the notification, provide a single payment of the net settlement amount to the second party.

“Advantages will become more apparent to those skilled in the art from the following description of the preferred embodiments which have been shown and described by way of illustration. As will be realized, the present embodiments may be capable of other and different embodiments, and their details are capable of modification in various respects. Accordingly, the drawings and description are to be regarded as illustrative in nature and not as restrictive.”

The claims supplied by the inventors are:

“1. A computer-implemented method for generating a subrogation net settlement smart contract using a distributed ledger, the method comprising, via one or more processors, servers, and/or associated transceivers: generating the subrogation net settlement smart contract for the distributed ledger in a distributed ledger network maintained by a plurality of participants each executing code in the subrogation net settlement smart contract to reach a distributed consensus on a state of the subrogation net settlement smart contract, the subrogation net settlement smart contract configured to: determine a proof of agreement regarding a net settlement including an aggregation of a plurality of settlements between a first party and a second party to a plurality of subrogation claims over a threshold time period by comparing a first cryptographic hash value provided by the first party to a second cryptographic hash value provided by the second party, and determining that there is proof of agreement in response to determining that the first and second cryptographic hash values match, wherein each of the first and second cryptographic hash values are determined based upon one or more characteristics of the net settlement between the first and second parties over the threshold time period; and transmit notifications to the first and second parties of the proof of agreement regarding the net settlement to allow the first and second parties to verify terms of the net settlement and provide a single payment for each of the plurality of settlements over the threshold time period; and deploying the subrogation net settlement smart contract to the distributed ledger maintained by the plurality of participants in the distributed ledger network.

“2. The computer-implemented method of claim 1, wherein the first party and the second party determine the first cryptographic hash value and the second cryptographic hash value, respectively, using a same set of one or more characteristics of the net settlement.

“3. The computer-implemented method of claim 1, wherein the one or more characteristics of the net settlement include at least one of: a net settlement identifier, a net settlement amount, a company code of one of the first and second parties providing the net settlement, or a plurality of cryptographic hash values representing the plurality of settlements included in the net settlement.

“4. The computer-implemented method of claim 1, further comprising: generating a subrogation payment smart contract configured to: receive, from a payor party of the first or second party, payment information indicating that the payor party paid a net settlement amount to a payee party of the first or second party; and transmit a notification to the payee party indicating that the net settlement amount has been paid; and deploying the subrogation payment smart contract to the distributed ledger maintained by the plurality of participants in the distributed ledger network.

“5. The computer-implemented method of claim 4, wherein the payment information includes at least one of: the first or second cryptographic hash value, an identifier of the payor party, an identifier of the payee party, a transaction identifier for the payment, a transaction amount for the payment, or a date of the payment.

“6. The computer-implemented method of claim 1, wherein the subrogation net settlement smart contract is further configured to: determine that there is no agreement in response to determining that the first and second cryptographic hash values do not match; and transmit notifications to the parties indicating that there is no agreement regarding the net settlement.

“7. The computer-implemented method of claim 1, wherein the subrogation net settlement smart contract is further configured to: receive, from the first or second party, an indication that the net settlement amount has been paid; and set a flag indicating that the net settlement amount has been paid.

“8. A computer-implemented method of verifying a net settlement of a plurality of subrogation claims between a first party and a second party using a distributed ledger, the method comprising, via one or more processors, servers, and/or associated transceivers: determining, by the first party, a net settlement amount including an aggregation of a plurality of settlements between the first party and the second party to the plurality of subrogation claims over a threshold time period; generating a first cryptographic hash value based upon one or more characteristics of the net settlement over the threshold time period between the first party and the second party; broadcasting the first cryptographic hash value to a subrogation net settlement smart contract deployed to the distributed ledger and maintained by a plurality of participants in a distributed ledger network as a proof of agreement of the net settlement between the first and second party, each of the plurality of participants executing code in the subrogation net settlement smart contract to reach a distributed consensus on a state of the subrogation net settlement smart contract, wherein the subrogation net settlement smart contract compares the first cryptographic hash value submitted by the first party to a second cryptographic hash value submitted by the second party to determine if there is a match; receiving a notification from the subrogation net settlement smart contract that the first and second cryptographic hash values match indicating that there is proof of agreement between the first party and second party; and in response to receiving the notification, providing a single payment of the net settlement amount to the second party.

“9. The computer-implemented method of claim 8, wherein the first party and the second party determine the first cryptographic hash value and the second cryptographic hash value, respectively, using a same set of one or more characteristics of the net settlement.

“10. The computer-implemented method of claim 8, wherein the one or more characteristics of the net settlement include at least one of: a net settlement identifier, a net settlement amount, a company code of one of the first and second parties providing the net settlement, or a plurality of cryptographic hash values representing the plurality of settlements included in the net settlement.

“11. The computer-implemented method of claim 8, further comprising: broadcasting payment information to a subrogation payment smart contract indicating that the first party paid the net settlement amount to the second party.

“12. The computer-implemented method of claim 11, wherein the payment information includes at least one of: the first or second cryptographic hash value, an identifier of the first party, an identifier of the second party, a transaction identifier for the payment, a transaction amount for the payment, or a date of the payment.

“13. The computer-implemented method of claim 8, further comprising: broadcasting to the subrogation net settlement smart contract an indication that the net settlement amount has been paid.

“14. The computer-implemented method of claim 8, wherein the threshold time period is at least one of: a day, a week, or a month.

“15. The computer-implemented method of claim 8, wherein the plurality of subrogation claims further include at least a third party, and the subrogation net settlement smart contract compares the first cryptographic hash value submitted by the first party, the second cryptographic hash value submitted by the second party, and at least a third cryptographic hash value submitted by the at least third party to determine if there is a match.

“16. The computer-implemented method of claim 8, wherein the first cryptographic hash value is generated by a third-party aggregator or service provider.

“17. The computer-implemented method of claim 8, further comprising: transmitting a message to a messaging smart contract deployed to the distributed ledger and maintained by the plurality of participants in the distributed ledger network, wherein the message is viewable by the second party.”

There are additional claims. Please visit full patent to read further.

For the URL and additional information on this patent, see: Austin, Edward. Net settlement of subrogation claims using a distributed ledger. U.S. Patent Number 11461861, filed November 18, 2021, and published online on October 4, 2022. Patent URL: http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO1&Sect2=HITOFF&d=PALL&p=1&u=%2Fnetahtml%2FPTO%2Fsrchnum.htm&r=1&f=G&l=50&s1=11461861.PN.&OS=PN/11461861RS=PN/11461861

(Our reports deliver fact-based news of research and discoveries from around the world.)