What is the purpose of an administrator's right to subrogation for claims?

The purpose of an administrator's right to subrogation for claims is to enable recovery of amounts paid for claims. When an administrator or an insurance entity pays out a claim to a claimant, subrogation allows them to step into the shoes of the claimant and pursue recovery from third parties responsible for the loss or damage that led to the claim. This process not only helps the administrator recover funds but also ensures that the party at fault is held accountable for their actions.

In the context of claims management, this right is essential because it mitigates the financial impact on the administrator and helps maintain the integrity of the funding system, allowing for future claims to be managed more effectively. Subrogation ensures that the financial burden does not solely rest on the insurer or administrator after they fulfill their obligation to the claimant.