Chapter 11

Question 1

what are the 3 basic steps of the claim period?

Answer 1

1. receiving a claim
2. determine if claim is eligible for payment according to the terms of the policy
3. ends with the insurers decision to either pay policy proceeds according to the terms of the policy or deny the claim.

Question 2

define claim philosophy

Answer 2

statement of the insurer’s objectives for administering claims

Question 3

an insurer’s claim philosophy is suppported by specific claim practices. What is meant by this?

Answer 3

statements that guide day to day handling of claims. Focus on:

1. processing request quickly
2. applying provisions of policies accurately and consistently
3. investigate questionable claims
4. obtain medical and legal advise when needed
5. adhering to regulations
6. provide claimants with courteous, prompt and complete expliantions
7. allow claimants to submit additional supporting information on a denied or limited claim
8. documenting evaluations and decision accurately
9. providing claimant with a way to appeal the insurer’s decision to deny a claim

Question 4

Claim philosophy and claim practices adopted by most insurers are based on principles established by who?

Answer 4

the international claim association (ICA). they have 11 principles.

Question 5

what is a claim form?

Answer 5

a document containing information about a loss under an insurance policy and about the person or entity claiming the proceeds that is submitted to an insurance company to begin the claim evaluation process.

Question 6

companies typically maintain a staffin hierarchy that includes support staff, claim analysts, and claim supervisions. Define these rolls.

Answer 6

1. support staff- establish files, order information, routine action, handle communications and verify beneficiary, facilitate payment process
2. claim analysts- review claim and determine liability.
3. claim supervisors- with with new analysts during training and oversee the activities of claim analsysis and support staff.

Question 7

What are the 7 steps in the claim evaluation process?

Answer 7

1. was coverage in force when the loss occured?
2. was the deceased covered
3. verify that the loss occured
4. determine whether the policy is contestable.
5. determine whether the loss is covered under the policy
6. calculate the amount of benefit to be paid
7. determine who is entiled to receve the benefits.

Question 8

What is a list of typical duties of an insurance claim supervisor

Answer 8

assign cases 
consult/advise claim analysis on cases 
handle difficult/large cases
monitor traning and perfromance of analyst
respond to or assist in compliants
assist with claim audits
produce periodic production reports 
srevce as a liaison with teh medical direct and legal staff

Question 9

Can insurers outsource some/all of its claim administration acitvities to a third-party administrator?

Answer 9

Yes, they can not be affilitated with an insurer but provide various adminsitrative services to insurer and group policyholders.

Question 10

what is a case assignment system?

Answer 10

claims are assigned to individual claim analyst according to predetermined criteria such as coverage, geo location of claim, financial professional servicing the policy or alphabet (insured).

Question 11

Whats is a work division system?

Answer 11

used to assign claims to analysts according to the type of claim and amount of authority.
Complex cases can be assigned to a team, for opinions- but the claim analyst will be the one to make the decision.

Question 12

when would a claims analyst work with an UW>

Answer 12

suspected misrepresentation or fraud.

*review information and determine how this would have affected the risk appraisal porcess.

Question 13

To forster cooporation between claim administration and underwriting functions, insurer’s often assign staff members from both areas to collab on what?

Answer 13

1. develop new insurance products
2. provide data that managers can use to evaluate the probable success of new products
3. review potential new policy documents, including application forms, and claim forms, to check for problems
4. undergo cross taining to grain a deeper understanding of the work requirements for both functions.

Question 14

who uses the statistical information generated by the claim administration area?

Answer 14

Actuaries- setting premium rates

2. auditors- assessing the effectiveness and efficiency of the claim process
3. product development team-

Question 15

what are some benefits to the claims analysts by using claim management technology?

Answer 15

1. preforms some or all of the claim evaluation steps
2. increases productivity and efficiency
3. reduces costs
   * more time to settle claim = ^ expenses, and lower cx satisfaction.

Question 16

What are some examples of technology systems used by claimants?

Answer 16

1. automated workflow systems
2. express claim processing
3. auto-adjudication
4. predictive analytics

Question 17

What are the typical tasks involved in processing a claim for life insurance?

Answer 17

1. entering claim in the company’s claim tracking system
2. collecting information relevant to the claim and if necessary requesting additional information
3. analyzing available information
4. making a decision on the claim

Question 18

What are express claim processing systems?

Answer 18

reduce the cost and turnaround time for processing and paying life insruance claims.
- eliminates the need for the calimeent to submit a formal claim form or provide a desath certificate
- limitations for qualifying policies
> death benefit <55K- 75K
- daeat occured <1 yr prior to claim for benefit
- insured died from natural cause
- beneficiary designation has been in effect >3 months
- policy inforce at least two years

Question 19

some insurers have auto-adjudication for claims that fit certain parameters. what is this?

Answer 19

an electric claim processing sytem that can perform specified claim processing activities without human intervention,
- receiving and creating records for claims submitted electronically
- verifying information about coverage
=- making decision
- calculating benefit amount
- authorizing payment of benefit
- producing checks or transfering funds electronically to pay benefits.

Question 20

if a court determines that the insurer denied a claim improperly, the court can require the insurer to pay compensatory damages and possibly punitive damages. define these.

Answer 20

compensatory: money awars intended to compensate the inured party for monetary losses that resulted from a defendants improper conduct
punitive: awarded in addition to compensatory when da defendants conducts meets the standards for behaviour that is so egregious as to warrant such damagers.

Question 21

the unfair claims settlement practices act defines what?

Answer 21

a number of actions that are considered unfair and if committed by an insurer
1) in conscious disregard of the law or 2) so frequency as to indicate a general business practice.

Question 22

What do the standard for life insruance calims specify?

Answer 22

1. provide claim forms within 15 days after receiving a notification fo a claim
2. begin any necessary investigations fo a claim within 15 days after receiving proof of loss
3. pay claim within 30 days after determining they are liable
4. provide claimants with information regarding any outstanding information to reach a decision on the claim at least every 30 days.
5. send the claimant a written notice of denial of a claim within 15 days ofter determingin that the insurer is not liable

Question 23

What happens to uncalimed benefits?

Answer 23

the ACLI in 2012, issued a standard requiring life insurers to actively seach for the insureds who have died rather than waiting for a claimaint to send tocide of death. encouraged to be adopted by 2017.
insurers are required to compair their records against the social security death master file.

Question 24

What is the DEath Master File ? (DMF)

Answer 24

social security adminsitration database of information about people who had a social security number and whose deaths were reported to the SSA.

Question 25

What are the laws that are currently in force to regulate how insurers collect, use and share personal information?

Answer 25

1. U.S. state laws based on model privacy act
2. US state regulations based on the model privacy regulations
3. US federal GLB act
4. U.S federal fair credit reporting act (FCRA)
   * NAIC also developed model laws and regulations

Question 26

what is a pretext interview?

Answer 26

somone attempting to gain information from another person by

1) pretending to be someone they’re not
2) pretending to represent someone he does not represent
3) refusing to identify themsleves
4) misrepresenting the purpose of the interview.

Question 27

what is claim fraud?

Answer 27

a subset of insurance graud in which a person intentionally uses false information in an unfair or unlawful attempt to collect beenfits under an insurance contract.

Question 28

What is a special investigative unit (SIU)?

Answer 28

group of individuals often composed of representatives of the claim, legal, and internal audit funcstions as well as independent investigations- who are responsible for dectecting, investigating, and resolving claims, particularly those involving insurance fraud.

Question 29

Insurers can also get assistance in detecting fraud from teh MIB group’s claim activity index (CAI). what is this?

Answer 29

shared, industry-wide database that includes informaiton about claims that have been filed with memeber comapnies.
- used to determine if cx filed a claim wiht one insurer has also filed similar claims with abother.

Question 30

define defamation

Answer 30

civil wrong that occurs when a person makes a false statement that tent to damage the reputation of another.

Question 31

define invasion of privacy

Answer 31

civil wrong that occurs when a person appropriates someone’s name or personality, publicizes someone’s private affairs, intrudes into someone’s private affairs and the wrong causes mental suffering, shame or humiliation, or places someone in a false light in the public eye.

Question 32

what are some common areas of evaluation when reviewing claims performance standards?

Answer 32

1. number of new claims received in a particular period
2. average number of days needed to process each claim
3. number of claims completed during a particular period
4. number of complaints
5. number of reopened cases.
6. average amount paid per claim

Question 33

some insurers are subject to periodic marker conduct examinations. what is this?

Answer 33

formal investigations of an insurer’s nonfinancial operations carried out by one or more state insurance departments as a way to detine whether the insurere’s operations comply with applicable laws and regulations.

Question 34

during market conduct examinations, compliance is reviewed with policy terms and claim procedures by reviewing sample of claim files to determine what?

Answer 34

1. if the time required to investigate and settled was within acceptable limits
2. documentation in claim files were adequate and accurate
3. amounts of claim payments were calculate accurately
4. correct payee received the benefit

• review claims thats results in lawsuits to determine whether the isnurere improperly denied the claim and if the insurer has conducted adequate internal audits.