chap 13 - quality systems and E&O's

Question 1

quality systems

Answer 1

1, TQM, Japan, Quality systems, Kaizen, quality circles (coming together to solve problems)
2. Six Sigma - business management strategy (motorola) - ge- reducing process variation so that virtually all products meet or exceed clients expectations involves- rigourous, re-design and process management

Question 2

consequences of poor service

Answer 2

1. financial- broker to find 8x cost of uninsured E&O to compensate for loss
2. reputation and referrals- best source of NB- poor reputation could damage
3. management time and morale- serious e&o debilitating and time consuming
4. regulatory action- poor service, mis management of complaints could result in reg action

Question 3

what causes mistakes

Answer 3

1. mergers, acquisition and consolidation
   2, technical training and education |(standards fallen over past 25 yr)
2. reduced standards of supervision
3. policies (partly resolved by the contract certainty initiative)
4. impact of the market cycles
5. economic pressure

Question 4

examples of e&o’s

Answer 4

1. doc failures
2. disclosure of all material facts
3. appreciation of extent of cover
4. responsibility to explain terms fully to insured
5. lack of appreciation of potential consequences for insured
6. failure of supervision and management
7. pensions mis-selling

Question 5

features of a quality systems for brokers

Answer 5

1. incoming post routines
2. incoming email
3. outgoing email
4. meetings
5. broker procedures
6. appraisal and training
7. management
8. management review
9. complaints
   10 telephone conversations
   11 changes in cover / t&cs
   12 diary systems
10. self assessment file review
11. supervision- peer review (spoe system second pair of eyes)
12. filing systems
13. email/ paper office

Question 6

problems with emails

Answer 6

1. uncontrolled filing into personal folders]
2. uncontrolled deletion of emails
3. uncontrolled export of files
4. emails responded by inexperienced staff without review

Question 7

how brokers deal with problems with emails

Answer 7

1. standard filing hierarchy- public folders
2. clear rules on responses and supervision
3. maintenance and reg review of paper activity / transaction sheet
4. maintenance and reg review of os items list
5. clear protocols - use of language - professional

Question 8

training session in understanding E&Os

Answer 8

stage 1- review of typical claim incidents- brainstorming sessions where team members hypothesize various forms of mistakes- real life experiences as faced by trainees- brainstorming mistakes and consequences.

stage 2 looking at office systems, features of systems in relation to mistakes, testing for understanding- what constitutes an incident?

stage 3 what the member of staff should do if they feel the incident disclosed has not been responded to correctly. give staff confidence that immediate disclosure of the issues will not result in disciplinary action

Question 9

reasons for the fall in tecnhical standards and skills

Answer 9

1. movement- personal lines and small business moved to highly automated call centres
2. pressure- on margins of brokers and insurers during soft periods
3. quality - of people entering profession versus investments, banking, it
4. lack - of reg and industry wide pressure for professional qualifications