4.2 Claims: Handling Flashcards
When will insurer be litigating against 3rd, usually
Subrogated claim in name of insured or for broker’s BoD
Third figure in reserve table
Costs (Defendant)
What should go in status of claim
Current status of Ps, e.g. LoC received, proceedings commenced, notification received
When will insurer be litigating against insured, usually
Over policy wording, refusing to pay out, or trying to avoid
When will a Client Care Letter be required
If S is not on the panel for the insurer - one-off instruction
What are the defence costs covering in the reserve
For both insured and the other side - stage to show costs if settles early
After considering notification clause, consider what two things
Any avoidance issues and relevant exclusion clauses
What is an IBNR reserve
Claims incurred but not yet reported, e.g. extreme weather event
Two situations in which litigation can ensue
Against 3rd or against insured
If there is a breach of a general condition, remedy would be what
Damages, but negligible
What two columns of figures should there be in reserve table
To trial and to early settlement
What is a market report
Coverage report addressed to entire market
Always remember to take what off quantum table
Excess to be paid by insured
What does an SLA set out
Standard of service, how it will be measured, fees, DR and termination
Before responding to insured, what should S always do on behalf of insurer
Reserve rights
Why does S usually attend market meetings
To advise + keep discussions privileged
After avoidance issues + exclusion, what next in Coverage
Insurers should (not) provide cover bc
What 6 things to include at top of initial report
Insured, Claimant, Date of Claim, Date of Accident/event, Insurer’s reference, Recipient and address
Two different options to include in Strategy part of report
Consequences if insurers decide to accept, and consequences if decide to deny, w/ recommendations
Why does insurer deal w/ claims instead of insured
Control costs and look from commercial perspective
After going through insuring clause + if within policy period, what next in Coverage
Go through Limit of indemnity, defence costs, and excess
What is the indemnity part of reserve covering
Exposure of insurer under the policy - losses recoverable under policy
Panel Ss usually have what C w/ insurers
Service Level Agreement
What are the two main ways of reporting to the market
Market meetings and market reports
If insurer is successful in subrogated claim, what happens with recovering from reinsurer
Will take account of subrogated recovery
First figure in reserve table
Liability
Three different kinds of reserves
Open claims, IBNR and IBNER
Timeline of claims handling
Notification by insured to broker/insurer; insurers contacts Ss; Ss acknowledge instructions; Ss build initial report
What is the potential consequence of failing to keep insurer updated
Negligence
What to contain in ‘Liability’ part
Discussion of claim against insured - potential defence? Concede liability?
Why does insurer need to be updated of improvement/deterioration
Advance notice needed of any pay out, needs to be able to input, and for financial year reporting Os
Fifth figure in reserve table
Subtract excess/deductible
What should you consider to see if S needs to advise on reserve
SLA
What are market meetings
Claims handlers from each insurer discuss claim
6 parts to initial report
Facts of claim, status, coverage, liability, quantum, strategy & recommendations
Why should S collect witness statements ASAP
Before ememories fade
What is the first thing to address in Coverage part
Insuring clause + clause on whether occurrence or claims made policy - go through definitions to see if within
Fourth figure in reserve table
Subtotal
What should go in facts of claim
Briefly identify issues and provide appropriate summary
Second figure in reserve table
Costs (Claimant)
Final part of Coverage
Consider if claim exceeds policy limit - insured self-insuring/excess insurers?
If insurers decide to deny liability, advise insurer to do what
Write to insured immediately to advise them and require that they act as a prudent uninsured and deal w/ Claim on best terms possible and seek independent legal advice
What is an IBNER reserve
Claims incurred but not enough reported - likely to change w/ more info
What three separate figures are provided for in the reserve
Indemnity, defence costs and S own fee
Who is an initial report prepared for
Both insurer and insured, but different content
After going through policy limit in report, what next in Coverage
Notification clause (CP? what is effect?
Two ways to carry out subrogation against culpable 3rd
Joining to main action or dealing w/ after main action against insured settled
What is a split trial
Insurer settles on issue of liability but reserves position on quantum of claim
What is an open claim reserve
Claims made + being investigated/processed
