Chapter 7 Flashcards
Corporate Claims Philosophy
A vision and set of values aligned with overall business objectives, serving as a mental picture of desired outcomes
Mission or Vision Statement
Mission - reflects the organisation’s core purpose and values
Vision - reflects an aspiration or ideal outcome
Importance of Claims Philosophy
- enhances marketing and customer retention
- establishes a unified approach to claims handling
- provides clear service expectations for staff and customers
Origin of Claims Philosophy
Originated from the Association of British Insurers (ABI) and was formalised by Lloyd’s
Benefits of ISO 9001
- promotes consistency in service levels
- provides a structured quality management system
- enhances customer retention and marketing strategies
What is ISO 9001
An internationally recognised standard for quality management
ISO 9001 2015
- high level structure for standardised management systems
- greater focus on leadership engagement
- structured risk management approach
- simplified language and common structure
ICOBS Chapter 8
8.1 - handle claims promptly and fairly; give reasonable guidance and not unreasonably reject claims
8.1.2 - qualifying misrepresentation
8.2.6 - insurers must provide a reasoned offer or reply within three months of a claim
CUE Claims
- motor claims (excluding windscreens)
- household
- travel
What is CACHE in relation to CUE?
(CRIF application for claims history exchange) is a supplier offering access to CUE
Credit Industry Fraud Avoidance System (CIFAS)
A UK based non-profit fraud prevention association
A CIFAS warning is placed against the address used, prompting extra checks for future applications
Insurance Fraud Enforcement Department (IFED)
- a police unit focused on fighting insurance fraud
- costs £8.7million, paid my insurers
- started in Jan 2012
Insurance Fraud Register (IFR)
- a database of proven insurance fraudsters
Insurance Fraud Types
- fake no-claims bonuses
- exaggerated claims
- “fronting”
- fake theft claims
- staged car crashes
National Plant and Equipment Register (TER)
A database of stolen plant and equipment (machinery)
Credit Reports
Reports used to check financial history and creditworthiness to help assess credit risk
Individuals - credit checks, debts
Businesses - company accounts, credit scores and legal status
Claims Support Software
Helps to calculate low to mid-value injury claims
- Colossus by DXC Technology
Voice Recognition Software
A tool that detects changes in vocal tone to identify potential lies
Cognitive Interviewing and Conversational Management
Cognitive Interview: developed by Fischer and Geiselman (1992)
- ensures cooperation and accurate recall from witnesses
Conversational Management: developed by Dr Eric Shepherd (1991)
- encourage uncooperative subjects to share details
National Hunter
- detects application fraud in finance and insurance
- verifies application accuracy
Big Data
- large varied data sources such as social media, satellite, CCTV and medical reports
- reduces fraud and accidents
Data Protection Legislation
The UK General Data Protection Regulation (UK GDPR) and the Data Protection Act 2018 (DPA)
Sensitive Personal Data
- race/ethnic origin
- political opinions
- religious beliefs
- trade union membership
- genetic data
- biometrics (for ID purposes)
- health data
- sexual orientation
Data Protection Principles
- lawfulness, fairness and transparency
- purpose limitation
- data minimisation
- accuracy
- storage limitation
- integrity and confidentiality
- accountability
Lawful Processing for Personal Data
- consent
- contract
- legal obligation
- vital interests
- public task
- legitimate interests
FinTech and InsureTech
Fintech - refers to new financial products, services and processes that incorporate intensive use of technologies
InsureTech - application of technological innovations in the insurance sector
AI in Motor Insurance
Applications: claims registration, damage assessment, repair authorisation, fraud detection and liability evaluation
Challenges: lacks emotional intelligence and creativity
Fraud Act 2006
- making false/misleading representation
- failing to disclose information legally required
- abusing a position of trust
Bribery Act 2010
- paying or receiving bribes
- bribing foreign officials
- failure of organisations to prevent bribery
Criminal Justice and Courts Act 2015
Section 57: allows dismissal of personal injury claims if they are “fundamentally dishonest”
Section 58: prohibits inducements for pursuing personal injury claims
Civil Liability Act 2018
- fixed compensation for whiplash claims
- new tariff for pain, suffering and loss of amenity for injuries lasting 0-24 months
- new requirements for medical evidence in whiplash claims
Motor Insurance Fraud
- induced accident
- staged accident
- contrived accident
- application fraud
- ghost policies
Total Loss Claims
actual total loss: vehicle is destroyed or unrepairable
constructive total loss: repair costs exceed the vehicle value
Category A: Scrap Only
Category B: Break for Parts
Category S: Repairable Structural
Category N: Repairable Non-Structural
Fire and Theft Claims Investigation
- a police report or fire brigade assessment is needed for validation
- insurance may be denied if it is suspected that the vehicle was intentionally damaged
Multi-Vehicle Accidents and Liability
Insurers encourage policyholders to claim under their own policy and settle liability between insurers
Vulnerable Road Users
- pedestrians
- cyclists
- children
- escooters
UK Stance on E-Scooters
- privately owned scooters are illegal on public roads
- rental escooters can be used on public roads
Penalties for using E-Scooters illegally on Public Roads
- up to 6 penalty points and a fine up to £300
Contributory Negligence
- when the claimant is partly at fault for their own injury
- passengers not wearing seatbelts can be found contributorily negligent
- cyclists not wearing helmets may face this
Admission of Liability
- insured individuals must not admit liability without insurer consent
- solicitors must act according to insurer instructions
- liability should not be denied until all evidence is reviewed
Without Prejudice
- allows free negotiation without the risk of statements being used in court
- communications marked “without prejudice” cannot be admitted as evidence
Litigation Process
Claim Form (Part 7) - initiates proceedings in county or high court
Part 20 - allows counterclaims, TP claims and co-defendant contributions
Part 36 - parties can make offers to settle and costs are affected by these offers
Damages Claim Portal (DCP)
- legal representatives must use the DCP for certain claims
- simplifies the process for personal injury claims
Fixed Costs for RTA Claims
Claims between £1k and £10k - stage 1 costs £200, stage 2 costs £300
Claims between £10k and £25k - stage 2 costs £200, stage 2 costs £600
Legal Aid, Sentencing and Punishment of Offenders Act 2012
Removed the recoverability of success fees from the losing party
Special Damages
- loss of earnings
- medical expenses
- out of pocket expenses
- hire of an alternative vehicle
- loss of services
General Damages
- pain, suffering and loss of amenity
- future loss of earnings
- smith v. Manchester award
- loss of congenial employment
- future loss of capacity
- pension loss and care costs
Fatal Injury Legal
Law Reform (Miscellaneous Provisions) Act 1934 and Fatal Accidents Act 1976
Interest for Damages
General Rule: awarded at the court’s discretion, as per s.35A of the Supreme Court act 1981
Provisional Damages
Awarded when a claimants condition may deteriorate or develop a new serious condition, allowing for future claims if the situation worsens
Structured Settlements
- involves a sum paid to the claimant with further sums over a period of years
- generally free of tax
- used for claims above £200,000 to ensure inflation proofing
Rehabilitation
Vocational : Employment
Medical : Treatment
Qualitative : Enjoyment
Heil V. Rankin (2000)
- resulted in a general increase in personal injury awards
- led to the revision of awards for injuries over £10,000
- courts use Kemp and Kemp for quantum of damages
Ogden Tables
assess life expectancy and future losses in personal injury and fatal accident cases
Personal Injury Discount Rates
- initially 2.5% (2001)
- reduced to -0.75% (March 2017)
- increased to -0.25% (August 2019)
