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Cert CII- IF4 > Chapter 5 - Claims Handling systems > Flashcards

Chapter 5 - Claims Handling systems Flashcards

1
Q

What does IT relate to ?

A. Processing and creation of information

B.Processing,Communication,Creation of information

C. processing, Storage and communication of information

A

C. processing, Storage and communication of information

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2
Q

What must an insurer’s claims management system be designed in reference?

A.Company’s retail claims philosophy and their claim management procedures

B.Company’s Corporate Client support philosophy and their management procedures

C.Company’s Corporate Claims philospohy and their claims management procedures

A

C.Company’s Corporate Claims philospohy and their claims management procedures

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3
Q

What issue’s does IT control in a system that has been developed for an all around objective?

A.physical

B.Technical

C.Mechinacal

A

B.Technical

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4
Q

For an individual insuracne company there is likely to be a very large number of claims transactions to be processed including: (select all that apply)

A. Claims reserving and estimating

B.Claim payments

C.Recoveries

A

A. Claims reserving and estimating

B.Claim payments

C.Recoveries

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5
Q

What following factors should considered in an individual claims handling context? (Select all that apply)

  1. Claims process requires communication between insurer and insured and could also involve loss adjusters, legal experts and witnesses
  2. The greater the number of co-insurers, the greater the complexity
  3. The larger the claim the longer it takes to get settled in all cases

4.Are brokers involved?

5.Almost all Uk insurers require reinsurance to reduce their net commitment to an aceptable level. details of the claim will need to be passed on to the reinsurer

6.Some claims may be fraudulent, repeated or exaggerated and may require moer detailed investigation

A
  1. Claims process requires communication between insurer and insured and could also involve loss adjusters, legal experts and witnesses
  2. The greater the number of co-insurers, the greater the complexity

4.Are brokers involved?

5.Almost all Uk insurers require reinsurance to reduce their net commitment to an aceptable level. details of the claim will need to be passed on to the reinsurer

6.Some claims may be fraudulent, repeated or exaggerated and may require moer detailed investigation

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6
Q

What does a claims system need to be capable of: (select all that apply)

  1. Processing large amounts of data

2.Procesing it quickly

3.Processing cheaply

4.Able to Process 24/7 7 days a week

5.Processing it accurately

6.Delivering information in a meaningful manner

A
  1. Processing large amounts of data

2.Procesing it quickly

5.Processing it accurately

6.Delivering information in a meaningful manner

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7
Q

When insurance companies choose a claims management system what factors will they take in?

  • Size of their company

-Structure of their company

  • Type of business written

-Management decisions about the extent to which their computer systems should be develped

A

-Structure of their company

  • Type of business written

-Management decisions about the extent to which their computer systems should be develped

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8
Q

For all claims what certain information is typically recored? (There is 6)

A
  1. Name of policyholder
    2.Policy number and claim reference
    3.Details of the claim, inlcuding dates
    4.Contacts
    5.Payments
    6.reserves
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9
Q

What are the 2 main aims of using IT in claims handling?

A
  1. Reduce the cost of claims adminstration

2.Improve the service provided to the insured

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10
Q

what are the main benefits of using IT in claims handling? (select all that apply)

1.Single data entry

2.Reduced use of paper files

3.Quicker claims settlement

4.Electronic authorisation of claims payments

5.Increase in communication chanels

6.Portals and extranent services

A

1.Single data entry

2.Reduced use of paper files

3.Quicker claims settlement

4.Electronic authorisation of claims payments

5.Increase in communication chanels

6.Portals and extranent services

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11
Q

What are the main difficulties of using IT in claims handling? (select all that apply)

1.If IT is the only solution to claims handling, there may be an increase in claims costs

2.Non-standard, large or more complex claims may not fit within the framework of the IT system

3.The system may be more difficult to operate, less flexible and more expensive then initially considered

  1. May be a cashflow effect: claim payments are faster but premium payment and reinsurance recoveries may not be.

5.Delivery of a claims service arising from a centralised, electronic function may result claims being dealt with by process rather than observation.

6.Productvity may increase, but this may result in contained, rather then reduced costs

7.The system will need to be maintained and updated, which can be expensive.

A

1.If IT is the only solution to claims handling, there may be an increase in claims costs

2.Non-standard, large or more complex claims may not fit within the framework of the IT system

3.The system may be more difficult to operate, less flexible and more expensive then initially considered

  1. May be a cashflow effect: claim payments are faster but premium payment and reinsurance recoveries may not be.

5.Delivery of a claims service arising from a centralised, electronic function may result claims being dealt with by process rather than observation.

6.Productvity may increase, but this may result in contained, rather then reduced costs

7.The system will need to be maintained and updated, which can be expensive.

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12
Q

What of the below is personal sensitive data?

1.Hair colour

2.Race

3.Ethnic origin

4.Shoe size

5.Politics

6.Religion

7.Trade union membership

8.Genetics

9.Biometrics

10.Health

11.Sex life

12.Sexual orientation

A

2.Race

3.Ethnic origin

5.Politics

6.Religion

7.Trade union membership

8.Genetics

9.Biometrics

10.Health

11.Sex life

12.Sexual orientation

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13
Q

what are the 6 principles under the UK GDPR?

A

1.Lawfulness, fairness and transparency

2.Purpose limitation

3.Data minimisation

4.Accuracy

5.Storage limitation

6.Integrity and confidentiality

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14
Q

What are the six lawful bases for processing data?

A
  1. Consent - Must be a freely given, specific, informed and unambiguous indication of the individual’s wishes
  2. Contract

3.Legal obligation

4.Vital interests

5.Public tasks - Perform a task in the publics interest

6.Legitimate interests

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15
Q

Under the UK GDPR accountability is one of the data protection principles, should firms put in place exhaustive and unproportinal governance measure to ensure this principle is followed?

A

No, firms are expected to put in Comprehensive but proportinate governance measures

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16
Q

Under the UK GDPR where should firms report data breaches to?

A

Information commisoner’s office (ICO)

17
Q

Whom are the two customers when designing a claims system?

A
  1. Insurance company itself

2.General public and the businesses/organisations who are customers of the insurance company

18
Q

What should an insurer expect the following from a claims management system? (Select all that apply)

  1. The ability to process large amounts of data
  2. The ability to process data quickly and accurately
  3. The delivery of information in a cheap manner
  4. The delivery of information in a meaningful manner
A
  1. The ability to process large amounts of data
  2. The ability to process data quickly and accurately
  3. The delivery of information in a meaningful manner
19
Q

What should a claim system be flexible enough to deal with?

A
  1. Claims notification
  2. The involvement of loss adjusters and other experts as appropriate
  3. The correct amount of claim detail appropriate for the class of business written
  4. The authority levels given to different staff grades. Both in terms of reserving and making of payments
20
Q

Whom is the ‘ultimate customer’?

A

The policyholder ( insured )

21
Q

What are three main ways to structure a company’s departments in a organisational structure?

A
  1. Function - claims, underwriting
  2. Division - product, geographical area
  3. A blend of both
22
Q

Can you remember what a functional structure looks like ?

A

CEO

Board of directors

Operational head of department

(Individual departments)

23
Q

Can you remember what a divisional structure looks like ?

A

Each of these are responsible for designing, producing and marketing it’s own products

  1. Home country commercial division
  2. Home country personal division
  3. International division
24
Q

In a divisional structure, what is a centralised organisation?

A

Centralised organisations retain authority at the top, with little delegation

25
Q

In a divisional structure, what is a de-centralised organisation?

A

Decentralised organisations have more delegation with divisional managers making more decisions

26
Q

Where will very large claims statements be advised to regardless of the structure of the company?

A

Head office

27
Q

Are the following advantages for a centralised or decentralised claims settlement method?

  1. The required level of expertise is available.(which would not always be the case at every office location)
  2. Assessing records and underwriting staff is easier
A

Both are advantages for centralised claims methods

28
Q

Are the following disadvantages for a centralised or decentralised claims settlement method?

  1. May be a lack of contact between policyholders and local staff
  2. Will be an inevitable delay involved in advising head office and waiting for a response in respect of significant underwriting and claims issues
A

These disadvantages are for centralised claim method

29
Q

Which of the following can assist with a claims team in their functions. (Select all that apply)

  1. Outsourcing companies
  2. Loss adjusters

3.surveyors

4.solicitors

5.loss assessors

6.authorised repaires

7.risk managers

8.port staff

A
  1. Outsourcing companies
  2. Loss adjusters

3.surveyors

4.solicitors

5.loss assessors

6.authorised repaires

7.risk managers

30
Q

What are the 3 main reasons for outsourcing?

A
  1. Perceived cost benefits
  2. Manage a specific issues
  3. Gain access to a wider skills base
31
Q

Whom are loss adjusters?

A

Loss adjusters are experts in processing claims from start to finish.

Their function is to negotiate a settlement, within the terms of the policy that is fair to both the insurer and the insured.

Their fee’s are met by the insurers who instruct them

32
Q

Whom are disaster recovery companies?

A

An organisation that specialises in ensuring business continuity for a company in the event of an interruption to the normal flow of business.

33
Q

What are disaster recovery companies often involved in?(select all that apply)

  1. Management analysis of the effect and impact of losing resources
  2. Identifying and evaluating operational risks that may impact operations

3.compiling recovery strategies

4.Adressing specific emergency situations

  1. The actual work done to return business operations to normal. Or as close as possible to normal
  2. Trials to assess the effectiveness of plans
A
  1. Management analysis of the effect and impact of losing resources
  2. Identifying and evaluating operational risks that may impact operations

3.compiling recovery strategies

4.Adressing specific emergency situations

  1. The actual work done to return business operations to normal. Or as close as possible to normal
  2. Trials to assess the effectiveness of plans
34
Q

What is a surveyor?

A

A surveyor acts as the eyes and ears of the underwriter.

They will prepare a report that will include:

A full description of the risk

An assessment of the level of risk

A measure of the maximum probable loss

Recommendations on loss prevention

Adequacy of the insurance being requested

35
Q

What is a solicitor?

A

A solicitor can be used as a pre-litigation advice facility. May also provide things such as negotiation of complex injury claims. May be also used for legal advice services

36
Q

Who is a loss assessor?

A

Experts in dealing with insurance claims but are appointed by the insured.

Their fees are payable by the insured themselves

37
Q

What is a risk manager?

A

Utilised by policyholders. Their objective is to find ways to reduce the likelihood of an insurance claim by taking actions such as improving safety protocols etc.,

38
Q

What is a medical reporting expert?

A

Experts that are appointed by insurers and third party solicitors to assist with the valuation of the injured parties claim.

If experts cannot agree then the judge will decide which two opinions is the most persuasive

39
Q

List other experts in third party claims (there is 6)

A

Care experts
Medical experts
Life expectancy experts
Accountant
Accommodation experts
Surveillance

Cert CII- IF4 (7 decks)

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