Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

CII > IF4.3 Claims Considerations > Flashcards

IF4.3 Claims Considerations Flashcards

1
Q

Role of a claims handler

A
  • deal with all submitted claims quickly and fairly
  • settle claims with the minimum wastage/ avoid overpayment
  • estimate accurately the final cost of outstanding claims
  • distinguish between genuine and fraudulent claims
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Why is customer service so important?

A
  • Consumer awareness (consumers are more aware of their increased rights & can share bad experiences online, damaging insurers reputations)
  • Expectation of service (customers are expecting value-added services)
  • Competition (new insurers may use new technology and techniques providing better customer experience).
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Service standards will cover roughly…

A

nature, speed and economic efficiency of the claims service at each stage

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Aim of service standards

A

to balance the need to treat the customer fairly, efficiently and sympathetically with the need to only pay claims that are valid.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Benefits of quality customer service

A
  • encourages customer loyalty (cheaper to retain customers)
  • attracts new customers
  • attracts and keeps high-quality employees
  • marks the company out from its competitors
  • improves a companies profitability
  • increases productivity
  • improves the working environment
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

The first party

A

the person or company insured by the insurance company

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

The second party

A

the insurance company insuring the first party

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

The third party

A

anyone lese involved in a loss event

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

The third party does not have a contractual relationship with the insurer which has the following consequences…

A
  • The third party must legally, pursue their claim against the insured not the insurer (the claim is normally presented to the insurer from the insured)
  • There may be hostility involved so the third parties expectation may be greater.
  • There is no loyalty from the third party so may be more prone to exaggerating the claim
  • Insurers usually respond slower to third party claims
  • a well-handled third party claim acts as good marketing
  • A third party claim will not be fully compensated in the event of contributory negligence
  • third parties are not liable for any excess or deductibles
  • The recovery of legal costs is more common (and the insurer will have to pay their legal fees)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Are liability claims more or less complex than property claims

A

more

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Reserving

A

the process that a company carries out in order to assess the level of funds that are required to meet current and future claims liabilities.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What is claims reserving used to assess

A
  • overall financial performance of the company
  • relative profitability of difference classes in the business
  • adequacy of premium rates
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Estimating

A

insurers place an estimate on each individual claim file, usually split into categories to reflect the sections of the policy being claimed against

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

in order to establish the size of a reserve …

A
  • a value is placed on each claim
  • an allowance is then made for direct claims expenses
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Global claims reserve

A

a reserve covering the whole book of a business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

objective of claims reserving

A

estimate the future cost of claims

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Why are reserves necessary?

A

an insurance company needs to set up reserves for unsettled and unnotified liabilities (due to delays)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Outstanding claims reserve

A

contains all the reserves from all the individual reserves that have been incurred and reported to the insurer.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Incurred but not reported (IBNR) reserve

A

The reserve for losses that have incurred by the insured but not yet reported

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Incurred but not enough reported (IBNER) reserve

A

reserve that covers shortfall in provisions for outstanding claims reserves.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Equalisation reserves

A

required by law and smooth fluctuations in loss ratios

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

catstrophe reserves

A

reserves to cover a large number of related individual losses arising from one event

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Unearned premium reserve

A

reserve for the element of the premium for which insurance cover has not yet been provided.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

unexpired risk reserve

A

a reserve only needed where a loss is foreseen in relation to the unearned premium reserve.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Reserve for claims handling expenses

A

A reserve to cover the anticipated future costs of settling claims

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

re-opened claims reserves

A

a reserve for when the claim is closed but then the underlying circumstances of the claimant deteriorate (common in personal injury)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

What are the 4 types of insurance fraud

A
  • inventing a loss
  • exaggerating a number during an otherwise honest report
  • deliberately creating an insured event
  • exaggerating the effects of an insured event
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

Insurance Fraud Bureau (IFB)

A

a central hub for sharing insurance fraud data and intelligence using its position at the heart of the industry and access to data to detect and disrupt organised fraud networks.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

Insurance fraud enforcement department (IFED)

A

Part of the city of london police, they are a specialist unit dedicated to tackling insurance frau. funded by a partnership with insurers through the ABI and Lloyds.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

Insurance fraud register

A

A database of known insurance fraudsters.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

IFB Insurance Fraud Intelligence Hub (IFiHUB)

A

An IFB initiative, developing an industry wide counter fraud sharing platform, where intelligence about fraudsters can be shared in real time.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

Motor Insurance Anti-Fraud and Theft Register (MIAFTR 2)

A

details of all total loss and theft claims.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

Claims and Underwriting exchange (CUE)

A

contains information on personal lines & personal injury claims from the previous 3 years.
Subscribing member submit their claims data and check the true claims history of those individuals - aiming to eliminate multiple claims on parallel policies.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

Art Loss register

A

A register of all stolen art, with aims to:
-increase the recovery rate of stolen art and antiques
- deter theft by making resale of stolen art more difficult

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

Common indicators of fraud

A
  • claims made soon after a policy is taken out
  • frequent change of insurer
  • uncharacteristic increase in the level of cover
  • financial difficulties
  • prevarication by the insured (avoiding telling the truth)
  • excessive pressure to settle
  • inconsistencies in the story
  • lack of co-operation
  • poor or missing documentation or sometime perfect documentation
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

Completing claims forms over the phone, settlement by replacement instead of cash & use of cognitive behaviour tools to listen to inconsistencies in voice will

A

help identify and combat fraud

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

How does fraud impact people

A
  1. The insurer: costs a lot, increasing premium costs making them less competitive.
  2. policyholders: increases premiums
  3. Fraudulent claimants: if they get away with it they may be tempted to do it again.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

Fraudulent Act

A

behaviour that makes a claim fraudulent

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

Insurance Act 2012 allows an insurer to treat an insurance contract as terminated from time of the fraudulent act and after termination

A
  • the insurer will remain liable for any prior legitimate claims
  • the fraudulent claim and all subsequent claims will be invalid
  • the insurer may recover any payments in respect to fraudulent claims
  • the insurer is entitled to retain any premium paid
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

fraudulent claim

A

someone who presents a completely fraudulent claim or someone who suffered a loss but uses a fraudulent device to increase the prospect of payment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
40
Q

Criminal Justice and Courts act 2015 (CJCA)

A

when part of a personal injury (PI) claim is found to be fundamentally dishonest, the whole claim will be struck out.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
41
Q

prudential regulation authority (PRA)

A

part of the bank of England responsible for the prudential supervision of systemically important firms operating in the industry.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
42
Q

Financial Conduct Authority (FCA)

A

responsible for the prudential regulation of smaller firms as well as the business conduct of all firms.
Focusses on generic, industry-wide issues rather than firm specific issues.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
43
Q

Insurance: Conduct of business Sourcebook (ICOBS)

A

standards relating of the handling of claims ensuring customers are treated fairly.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
44
Q

According to ICOBS even if insurers outsource claims handling…

A

they are still responsible for claims handling.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
45
Q

To ensure claims are treated fairly ICOBS recommends:

A
  • claims are handled fairly and settled promptly
  • customers are provided with appropriate information on the claims handling process
  • ensures conflicts of interest are disclosed and managed
  • must not turn down claims unfairly
46
Q

According to ICOBS it is unreasonable to refuse claims for

A
  • misreprensentation which was not qualifying
  • a breach of warranty unless the circumstances of the claims are connected with the breach.
47
Q

Duty of consumers under CIDRA

A

take reasonable care not to make a misrepresentation to insurers before a contract of insurance is entered into.

48
Q

Qualifying misrepresentations

A
  • deliberate & reckless
  • careless
49
Q

Contributory negligence

A

when the blame is shared

50
Q

Who must prove that a misrepresentation is qualifying

A

the insurer

51
Q

If a misrep is deliberate or reckless

A

insurer may avoid the contract

52
Q

if a misrep was careless and the insurer would’ve still entered the contract (but on different terms)

A

treat the contract as if those terms had applied

53
Q

if a misrep was careless and the insurer would’ve still entered the contract (but charged a higher premium)

A

the claim amount will be reduced proportionately

54
Q

if a misrep was careless and the insurer wouldn’t of entered the contract

A

avoid the policy but must return the premium

55
Q

Non-consumer duty to make a fair presentation

A
  • disclose every material circumstance
    OR
  • provide the insurer with sufficient information then an insurer can make further enquiries.
56
Q

(Non-consumer) If a non-disclosure was deliberate or reckless

A

insurers can avoid the policy

57
Q

If a non-disclosure was innocent or negligent (non-consumer)

A

remedies would be proportionate to reflect what the insurer would’ve done if they had known of the undisclosed information before entering into the contract.

58
Q

Under the insurance act a breach of warranty

A

suspends the insurers liability under the contract until such breach is remedied.

59
Q

claims expenses

A

fees for loss adjustor (claims over 5k)

60
Q

Basis of contract clauses

A

converted pre-contractual representations in a proposal form into warranties

61
Q

motor Insurance database (MID)

A

contains details of all registered vehicles and the relating insurance details.

62
Q

Financial Ombudsman Service (FOS) membership

A

compulsory for insurers

63
Q

The Financial Ombudsman Service is for…

A

consumers only

64
Q

Eligible complainants for FOS

A
  • consumer
  • microenterprise (turn over no more than 2 million)
  • charities (annual income no more 6.5mil)
  • trustees (net assets less than 5mil)
  • small businesses (annual turover less than 6.5mil and less than 50 employees)
  • guarntors
65
Q

Maximum award for complainants referred to the FOS after apr 2022 about acts after apr 2019

A

375 000

66
Q

The complainant can accept or reject a decision from the FOS. If the reject they…

A

they are free to pursue the matter in court.

67
Q

Who is the FOS decision binding to?

A

the insurer but not the insured

68
Q

Why do insurers prefer arbitration?

A

allows disputes to be settled in private by someone who has expertise in the subject of the dispute.

69
Q

Arbitration

A

is a customer doesn’t like the settlement amount they can dispute the number without a court case.

70
Q

What are the two types of Alternative Dispute resolutions (ADRs)

A

Adjudicative Options & Non-adjudicative options

71
Q

Konstantinos Agapitos v. Ian Charles Agnew,
manifest Shipping Co. Ltd v. Uni-Polaris Shipping on fraud,
Versloot dredging BV v. HDI-Gerling Industrie Versicherung AG and others

A

If a fraudulent claim, then not only will that fail but all subsequent claims (even if they are legitimate) will fail.

72
Q

Adjudicative Options: Arbitration

A

An independent person allows each person to present a case and respond to the other party.

73
Q

Adjudicative Options: Adjudication

A

Covers disputes between policyholders and sub-contractors (required by a statute over all construction contracts)
Determination made by an independent part within 28 days.

74
Q

Adjudicative Options: Expert Determination

A

for purely technical disputes an expert will make a decision that is legally binding.

75
Q

Non-Adjudicative Options: Negotiation

A

the starting point for any resolution, just talking to the other party.

76
Q

Non-Adjudicative Options: Joint settlement

A

parties come together to discuss options to resolve the case.

77
Q

Insurers can terminate cover from when (fraud)…

A

the fraudulent ACT (not the claim)

78
Q

Non-Adjudicative Options: Mediation

A

a facilitated decision where the dispute is heard by a mediator who seeks common ground between the two parties.

79
Q

Non-Adjudicative Options: Early neutral evaluation

A

provides an early view on the case, voluntary and not legally binding

80
Q

Non-Adjudicative Options: Conciliation

A

Compulsory for employment tribunals (common in employment & industrial disputes).
provided by agencies.

81
Q

what are adjudicative options for third party disputes?

A

parties determine the choice of process but lose control of the outcomes (determination rests with an independent neutral person)

82
Q

What are no-adjudicative options for third party dispute?

A

the parties retain control of the process and the outcome.

83
Q

Information an individual should know

A
  • insured own knowledge
  • knowledge of the person who is responsible for the insurance
84
Q

Information an organisation should know

A
  • relevant knowledge of anyone who is part of the insureds senior management
  • relevant knowledge of anyone responsible for the companies insurance
85
Q

Who is responsible for the regulation fair treatment of customers

A

the FCA

86
Q

Enterprise act 2016

A
  • it is an implied term that the sum must be paid in a reasonable time (includes time to investigate and assess the claim, depends on size of the claim, circumstances, compliance with regulation & factors outside of control)
  • a breach of the term results in the insurer paying additional damage payments and interest.
87
Q

Six customer outcomes

A
  1. consumers can be confident the company has fair treatment of customers central to their organisation
  2. products are designed to meet the needs of identified consumer groups and are targeted accordingly
  3. consumers are provided with clear info and are kept appropriately informed
  4. any advice is suitable and takes account of their circumstances
  5. products perform as consumers are led to expect
  6. consumers do not face unreasonable post sales barriers.
88
Q

For firms to achieve good outcomes for vulnerable customers they should..

A
  • understand the needs of their target market/customer base
  • ensure their staff have the right skills and capability to recognise and respond to the needs of vulnerable customers
    -respond to customer needs throughout the product design & flexible customer service
  • monitor and assess whether they are meeting and responding to the needs of customers with characteristics of vulnerability.
89
Q

Monetary award for FOS for complaints after apr 2022 about acts before apr 2019

A

170 000

90
Q

FCA consumer duty regulations

A
  • firms must deliver good outcomes for retail customers
  • consider the needs of customers especially those with vulnerabilities
  • There is an increased requirement for firms to understand and evidence whether consumer outcomes are being met
91
Q

FOS directions award

A

tells the firm what actions it needs to take e.g.
- pay an insurance claim (previously rejected)
- calculate and pay redress according to an approach set by a formula
- apologise personally

92
Q

How is FOS funded?

A
  • annual levy
  • case fee over a certain amount of cases
93
Q

Four key elements of the firm-consumer relationship according to the FCA

A
  • products and services
  • price and value
  • consumer understanding
  • consumer support
94
Q

Arbitration is usually…

A

a clause or condition in the contract

95
Q

What’s the risk of taking a case to court

A

public, risk your reputation

96
Q

arbitrators have the same powers as..

A

the courts

97
Q

Financial Vulnerability taskforce

A

promotes greater understanding, encourages appropriate behaviours and establishes good practise in respect of consumer vulnerability.

98
Q

when handling claims a company should

A
  • handles claims promptly and fairly
  • provides reasonable guidance to help a policyholder make a claim
  • does not unreasonably reject a claim
  • settles claims promptly
99
Q

Who is involved in the reserving process?

A

Underwriters, Actuaries & Claims managers

100
Q

Objectives of the Insurance fraud Bureau

A
  1. help insurers identify fraud and avoid the financial consequences
  2. support police, regulators and other law enforcement agencies in finding fraudsters and bring them to justice.
101
Q

Fraud Cheatline

A

A free and confidential tool to report suspected fraud for the public.

102
Q

Who Administers the Insurance Fraud Register

A

The Insurance fraud Bureau (for ABI members)

103
Q

Who set up the Claims and underwriting exchange?

A

The Motor Insurance Bureau

104
Q

What are the time periods a complaint has to be forwarded to the FOS in?

A
  • 6 months (from the firms final letter)
  • six years are the event complained about
  • 3 years after the complainant knew they should complain.
105
Q

Another word for Arbitration

A

tribunal

106
Q

Adjudicative vs non-adjudicative options

A

Adjudicative - parties loose control
Non-Adjudicative - parties still in control of process & outcome of resolution

107
Q

Fair Treatment of Customer Outcome 1

A
  1. consumers can be confident the company has fair treatment of customers central to their organisation
108
Q

Fair Treatment of Customer Outcome 2

A
  1. products are designed to meet the needs of identified consumer groups and are targeted accordingly
109
Q

Fair Treatment of Customer Outcome 3

A
  1. consumers are provided with clear info and are kept appropriately informed
110
Q

Fair Treatment of Customer Outcome 4

A
  1. any advice is suitable and takes account of their circumstances
111
Q

Fair Treatment of Customer Outcome 5

A
  1. products perform as consumers are led to expect
112
Q

Fair Treatment of Customer Outcome 6

A
  1. consumers do not face unreasonable post sales barriers.
113
Q

Delays in insurance

A
  • delays between the incident occurring and the notification of the claim
  • delays between the notification of the claim and the settlement of that claim

CII (28 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions