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LM2 > LO10: Claims handling > Flashcards

LO10: Claims handling Flashcards

1
Q

claims and underwriting relationship

A
  • report wordings that cause problems with interpretation
  • advise on new wording clarity
  • provide claims data to review risk performance
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2
Q

claims and outwards reinsurance relationship

A
  • know which reinsurance contains any forms of claim control and coop clauses
  • provide data
  • code losses accurately to ensure reinsurance is recoverable
  • keep claims data up-to-date
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3
Q

claims and complaints relationship

A
  • provide clarity on the complaint handling process
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4
Q

claims and management info relationship

A
  • give input on system designs or changes
  • review reports to ensure data is being reported properly
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5
Q

claims and legal relationship

A
  • advised on wording problems
  • liaise if claims go to litigation
  • liaise over outsourcing of claims
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6
Q

claims and compliance relationship

A
  • ensure all claims are properly trained and authorised
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7
Q

claims and marketing relationship

A
  • highlight any issues of clients not having a clear understanding of the product
  • claims can be used as a publicity tool
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8
Q

claims and senior management/board relationship

A
  • report large claims
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9
Q

claims and finance relationship

A
  • give warnings of large payments being made
  • liaise on cases of high volume of claims
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10
Q

how does the broker know who to advise?

A

reviewing mrc

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11
Q

mrc claims agreement party is for?

A

london market portion of the risk

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12
Q

lloyds claims agreement rules
- exempt classes

A

lloyds claim lead arrangements

exempt
- term life
- satellite

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13
Q

iua company market (marine and aviation)
- depends on?
- for different classes?

A

iua claims handling agreement

depends if the brokers siubmissions is:
- advice/settlement
- lloyds invoolvement
- direct or excess of loss reinsurance (proportional excluded)

marine (no excess of loss)
- lloyds involvement = only one compnay binds
- no lloyds involvement = first two companies have to agree

aviation (no excess of loss)
- direct business = first two companies
- fac reinsurance = lead company only

excess of loss reinsurance
- first two companies always

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14
Q

iua company market (nonmarine)

A
  • no binding is possible, each insurer agrees for its own share
  • can set up claims agreement systems to by-pass certain parties of their share is bellow a certain threshold
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15
Q

lloyds claim lead arrangements
- financial complex risk (two leaders)

A

if the amount (potentially) claimed, net of deductibles/excess, to the lloyds share on a single risk is more than
- 1m for third party
- £2m for 1st party
- £5m for excess of loss

for potentially must believe there is >50% chance of ocurrence

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16
Q

lloyds claim lead arrangements
- non financial complex risk (two leaders) situations

A
  • claim of extracontractual damages or damages in excess of policy limits
  • allegation of failure to comply with claim handling regulations
  • active/potential dispute resolution proceedings of any type
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17
Q

single claims agreement parties
- where?
- for?

A
  • london market (seperate lloyds and company agreement are required)
  • smaller (<£250k), less complex claims
  • can be put into open market and lineslip mrc
  • not for proportional treaty reinsurance or binding authorites
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18
Q

technical processing service

A

maintain g databases and sending overnight messages to syndicates from brokers

done by Xchanging (can also delegate claims handling authority - XCS adjuster and XCS colleagues)

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19
Q

claim experts

A
  • loss adjuster = for insurer
  • loss assessor = for insured
  • average adjusters = specialise in marine claims, calculate particular and general averages
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20
Q

terms of engagement

A

helps the expert understand what is reqiured of them

21
Q

paper claims file definition

A

not handled by electronic claims file system

22
Q

examples of named claims experts

A

professional indemnity = lawyer
cargo = local surveyor

23
Q

electronic claims file

A
  • not just for the london market
  • there are some excluded classes of business
  • elements
    1) class = data messaging system/database
    2) document repository
24
Q

electronic claims file
- claims setup using

A

unique claims reference
unique market reference

mrc is also added

25
Q

info brokers should include in first advice file

A

mrc
binding authority certificates
loss info received

26
Q

organisation onflict

A

insurer withdraws from the agreement party, passed to the next insurer on the list

27
Q

individual conflict

A

chinese walls or ethical walls set up

28
Q

payment on account

A

interim payment of indemnity

can be paid at any point in the claim cycle along with expert fees

29
Q

lloyds currencies for claims payments

A

14

can only pay in usd if premiums were paid in usd

30
Q

enterprise act 2016

A

claims should be settled in a reasonable time in any contract subject to english law

can claim damages for late payments for a year after the claims are paid

31
Q

moving claims money
- company market
- lloyds market

A

company = put on the electronic messaging system, not always immediate

lloyds = through XCS

32
Q

third party administrators

A

insurers delegate claims handing authority to them, coverholders or organisations

receive infor frombroker or insured, redirrect anything outside of their authority via the broker

reports monthly through a bordereau

33
Q

loss fund

A

provided to coverholder to tpa before hand to settle claims

replenished when bordereau is submitted

whatevers left gets returned at the end of the binding agreement

34
Q

average

A

underinsurance in nonmarine
loss in marine, underinsurance=underinsurance

35
Q

leakage

A

over payment of cliams

36
Q

reservation of rightts

A

insurer takes advice on whether exclusion wording is strong enough, this informs the insured that there might be a problem

avoids being estopped = prevented from declining a claim as they have led the insured into thinking there was no problem with the claim

37
Q

key fraud triggers

A
  • excessive claims documents
  • pressure to settle
  • reluctancy to answer questions
  • stories not adding up

leads to claims leakage

38
Q

uk claims regulation
- dealing with consumers vs commercial

A

fca’s isurance conduct of business sourcebook (icobs)
- consumers –> insurers cant invoke nondisclosure and misrepresentation without showing fraud which is harder to prove

39
Q

claims handling in the us
- california

A
  • number of states have their own claims handling regulations

california requires annual certification, need to knows
- timeline for acknowledging claims receipt
- timeline for letting insured know of on going investigation
- info the insured should provide with claim rejection to allow appeal

40
Q

sanctions can be on

A

governments
businesses
individuals
countries/regime

41
Q

sanctions can …

A
  • stop fund transfers
  • freezing of assets
42
Q

how insurers are informed of sanctions

A
  • hm treasury
  • us department of the treasury, office of foreign asset control
  • crystal (lloyds site)
43
Q

complaint info that should be communicated by the insurer

A
  • who to contact
  • timescales of considerations and complaints
  • existancte of fos
  • referral to fos doesnt remove legal rights
44
Q

where fos operation is documented

A

fca’s dispute resolution compaliants sourcebook (disp)

legal disputes must be withrawn before contacting the fos

45
Q

timeline for complaint to fos

A

earliest of
6 months after firms final decision
6 years after the event
3 years after the complaintant knew they could complain

or else opposed on time-barred

fos answers in 3 months

46
Q

when fos isnt binding

A
  • recommends a higher money award
  • decisions rejected by complainant arent binding to the respondent (being claimed against)
47
Q

fos funding

A
  • general levy on all firms
  • case fee paid by the firm
48
Q

fos direction award examples

A
  • pay refused claim
  • pay redress
  • apologies

LM2 (5 decks)

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