Chapter 2 Flashcards
Explain the Office of the Superintendent of Financial Institution
-Primary regulator of federally charged Canadian and foreign property and casually insurance companies
-Also, the federal agency responsible for overseen financial institutions
-Evaluate the financial soundness and the financial reporting requirements
Explain Property and Casualty Insurance Compensation Corporation
-Funds a special program approved by the government regulators to protect policyholders against the financial collapse of an insurer
-Is a nonprofit organization that responds to claims of policyholder under most policies issued by P&C insurance companies when insure becomes insolvent
Define Personal Information Protection and Electronic Documents Act
A federal statue that governs the collection and use of personal information. It states that personal information to be collected must be relevant, and that all information that has been collected is being collected, or will be collected must be held in the strictest of confidence.
Explain underwriting
The underwriting department invests the capital of the insurers shareholders by accepting or rejecting applications for insurance in keeping with the insurers underwriting strategy
Explain claims department
-Delivers on promised to pay ensure makes to consumers on policy sale
-insurers pays out losses they contract to cover
Define actuary
One who specializes in the mathematics of insurance mortality rates and the like
Define ratemaking
The process of compiling and analyzing data to establish rates that accurately reflect the level of risk. Usually performed by actuaries.
Define average cost reserving
Set up automatically when loss adjusters open a particular file. Actuaries predetermined a reserve amount for the particular type of claim by using historical data from a large sample of similar claims, noting their settlement amounts and considering any inflation factors. Also known as a volume reserve.
Define individual reserving
Used when only the loss adjuster can effectively estimate a reserve. The loss adjuster assesses each claim carefully in order to estimate how much should be put in reserve.
What are the two main types of actuaries?
Pricing actuaries: responsible for analyzing data and performing calculations to determine pricing for insurance policies
Reserving: determine the amount of mind to be held in bulk claims reserves
What are the agreements through IBC
- Agreement respecting standardization claim forms, and practices, and guidelines for the settlement of claims
- Agreement of guiding principles
- Agreement of guiding principles between primary and excess liability insurance respecting claims
- Agreement respecting disputed losses between property insurance and boiler and machinery insurance policies
- Owned and non-owner contract agreement
- Insurance industry alternative dispute resolution committee
Define fraud (3 definitions)
-Methods used to deceive to cause an unwarranted favourable decision for one’s own benefit
-Deliberate misrepresentation or misstatement
-Concealment of facts that should at the time be made known
Provide examples of how fraud may occur
-The policy is issued for property that does not exist, or that is owned by someone other than the insured
-The policyholder intentionally misrepresents how insured property is used to obtain a lower premium
-The claimant stages an accident to submit a fraudulent injury claim
-The policyholder stages of burglary
-The policyholder reports a vehicle theft when no theft has occurred
-The policyholder significantly inflate a claim or commit arson in order to present a property claim
Define phantom vehicle
A vehicle that does not exist or is already wrecked
Explain Special Investigations Unit
-Trained in statement-taking preserving evidence
-Former law enforcement officers, private investigators or senior adjusters
-Train adjusters, intermediates, and underwriters- to raise fraud awareness
Explain Canadian Independent Adjusters Association
Represents the collective interests of independent adjusters to government, industry, and the public
Licensed independent adjusting firms are eligible for corporate membership and their employment
Provides opportunities for training, education, and professional development
Explain Provincial Adjuster Association
-The various provincial adjusters associations recognize that adjusters have a duty to the insurers who they represent and also the public
-Requires adjusters to promote public confidence in insurance companies through fair and conscientious dealing and to refrain from fraud, deceit, misrepresentation, dishonest non-disclosure, undue influences, or other mischievous
What are the licensing requirements for an adjuster?
Independent: requires license in all province in which they work
Staff adjusters: not required except in Quebec, New Brunswick, Newfoundland and Labrador, and Prince Edward Island
Qualification: pass certain examinations, train on the job
Quebec: CHAD oversees training/discipline, AMF required certificate
Explain Equite Association
Was formed in 2021
National non-profit organization that supports Canadian insurance industry in its fight against insurance fraud
Mission is to prevent and defend against fraud by using advanced analytics and intelligence methods and by coordinating investigations
