Chapter 13 Flashcards
Claim administration is the insurance function that is responsible for what?
evaluating, processing and paying valid claims for contractual benefits that policyowners or beneficiaries present.
why is it important to have effective claim administrations?
- prompt payment of benefits when an insured event occurs
- primary contact point with customers
- data obtained from claims, reflects u/w decisions and making new insurance products
- reducing/eliminating mistaken of fraudulent claims.
what happens if a claim is not paid within a certain number of days?
laws require insurers to add interest to the benefit amount
what happens if claims are paid out too quickly?
you risk the change of paying non-valid claims.
what is a claim analyst?
is an insurance company employee who is trained to review individual claims and determine the company’s liability under each claim.
Name four other departments claims with interact with
- u/w,
- legal,
- product development
- actuarial
who are audits reflected in the claims department?
internal auditors check the accuracy of claims to determine if claim decisions were made accordingly to policy wording.
What is a claimant?
a person usually a beneficiary or policyowner who submits a ife insurance policy claim to the insurance company.
What is a claim philosophy?
a statement of the principles the insurer follows when conducting claim administration.
what are claim practices
statements that guide claim department employees in the day-to-day handling claims.
what are the goals, and practices of most claimants?
- process claims timely and cost-efficiently
- apply policy provisions consistently
- investigate questionable claims
- obtain medical and legal advise when necessary
- train claim staff
what is a claim form (claimant statement)?
provides information about the loss and authorizes others to provide the insurer with relevant information so that the insurer can begin the claim evaluation process.
what are the 4 basic steps of the insurance claim routine processing?
- determine if benefits are payable
- calculating the amount payable
- identifying the proper payee
- paying the proceeds.
what is the steps involved in the claim administration process
?
- checking the insures’ policy administrating system. (was it in force)
- was the deceased the insured?
- is the policy contestible?
- is there material representation/ did the loss occur?
- was the loss covered?
What is the purpose of a third-party administrator, in terms of claims?
they are often used to maintain the records for group insurance.
when does claim fraud occur?
when the claimant intentionally uses false information in an unfair or unlawful attempt to collect benefits under an insurance policy.
when is a claim considered a mistaken claim?
when a claimant makes an honest mistake in presenting a claim to the insurer.
What is material misrepresentation?
a statement made in an application for insurance that is not true and that caused the insurer to enter into a contract it would not have agreed to if they had known the truth.
What is the term given for the legal process of voiding an insurance contract because of material misrepresentation?
rescission
what is a contestable period?
the period following policy issuance during which the insurer has the right to rescind the policy if the application for insurance contained a material misrepresentation. Usually 2 years.
What happens when a claim analyst suspects material misrepresentation or fraud?
they launch a claims investigation, which is the process of obtaining the additional information necessary to make an appropriate claim decision.
What is an exclusion?
provision that describe circumstances under which the insurer will not pay the policy’s proceeds following the death of the insured.
What is the most common exclusion in an insurance contract?
suicide exclusion- if the insured dies as a result of suicide within a certain period (1-2 yrs) the insurance company does not have to pay the policy proceed.
What are the two specific situations that require the claim analyst to conduct further investigation.
- insurer dies outside the country of policy issue. and insurer is unable to obtain acceptable proof of death
- the insurer disapears. (two kinds explainable and unexplainable)