Chapter 32-Policy Data Checks Flashcards
List 5 types of policy data checks (5)
5 types of policy data checks
Data reconciliation checks’
Consistency checks
Unusual values
Spot checks
Analysis of surplus and/or analysis of embedded value profit
For what purposes might data reconciliation checks be useful? (2)
What are the steps involved in the data reconciliation? (5)
Data reconcilliation checks might be quite useful where
an investigation is being carried out on a regular basis
a reconciliation of current data with those used for previous one can be attempted
Data reconciliation may be carried out as follows
first group data sensibly eg by year of entry within each broad contract type
using data similarly grouped relating to business that has
come onto insurer’s books and gone off
between the dates of the two investigations
the following check is done for each group
data at previous investigation + business come into books - business gone of books = data at current investigation
What kind of data reconciliation checks can we do for non-unitised business? (4)
What kind of data reconciliation checks can we do for unitised business? (6)
What other 3 factors are important when doing data reconciliations? (3)
Data reconciliation checks for non-unitised business
+number of contracts
+basic sum assured - or the equivalent benefit depending on contract’s nature
+office premium
+for with-profits contracts, the amount of any attaching bonuses
Data reconciliation checks for unitised business
+number of contracts
+number of units allocated, sub-divided by unitised fund
+current premium payable
+current benefits available eg amount of death cover
if relevant, recon must also allow for items such as
+changes in number units allocated arising from switches between unitised funds
+changes in premium payable and benefits under existing contracts
When doing data reconciliations, it’s important that
+systems for producing movements data are checked periodically to ensure
they’re working correctly
staff involved are following procedures laid down
+movements checked against any appropriate accounting data, especially regarding benefit payments
movement data
+independent ie separately generated from the in force data
Give examples of checks of consistency for non-unitised contracts (3)
Give examples of checks of consistency for unitised contracts (2)
Consistency checks for non-unitised contracts
Average sum assured or average premium per class of business sensible and consistent with figure for previous investigation’
Ratio of basic sum assured (or equivalent benefit) to premium payable per class of regular premium business sensible and consistent with figure for previous investigation
Consistency checks for unitised contracts
Number of units purchased by premiums and en-cashed to pay benefits
consistent with corresponding revenue account items
Internal unit movements eg for charge en-cashments
consistent with surplus emerging during year
What kind of checks can be made for unusual values? (5)
What kind of checks for unusual values can be performed in addition to looking at just individual data? (2)
What kind of checks can be done for computer held data? (2)
Checks for unusual values
+very large or zero unit values under unitised contracts
+impossible dates of birth
+impossible retirement ages
+impossible start dates
In addition to looking at only individual data
+may also group items and see how well distributed they are
+eg unusually high clustering of birth month may represent data input error needing further investigation
May be useful to compare an extract of computer held data with information in paper administration files
can be done on a spot check basis, by randomly selecting a number of pols
