LO10: Claims handling Flashcards
claims and underwriting relationship
- report wordings that cause problems with interpretation
- advise on new wording clarity
- provide claims data to review risk performance
claims and outwards reinsurance relationship
- 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
claims and complaints relationship
- provide clarity on the complaint handling process
claims and management info relationship
- give input on system designs or changes
- review reports to ensure data is being reported properly
claims and legal relationship
- advised on wording problems
- liaise if claims go to litigation
- liaise over outsourcing of claims
claims and compliance relationship
- ensure all claims are properly trained and authorised
claims and marketing relationship
- highlight any issues of clients not having a clear understanding of the product
- claims can be used as a publicity tool
claims and senior management/board relationship
- report large claims
claims and finance relationship
- give warnings of large payments being made
- liaise on cases of high volume of claims
how does the broker know who to advise?
reviewing mrc
mrc claims agreement party is for?
london market portion of the risk
lloyds claims agreement rules
- exempt classes
lloyds claim lead arrangements
exempt
- term life
- satellite
iua company market (marine and aviation)
- depends on?
- for different classes?
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
iua company market (nonmarine)
- 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
lloyds claim lead arrangements
- financial complex risk (two leaders)
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
lloyds claim lead arrangements
- non financial complex risk (two leaders) situations
- 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
single claims agreement parties
- where?
- for?
- 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
technical processing service
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)
claim experts
- loss adjuster = for insurer
- loss assessor = for insured
- average adjusters = specialise in marine claims, calculate particular and general averages
terms of engagement
helps the expert understand what is reqiured of them
paper claims file definition
not handled by electronic claims file system
examples of named claims experts
professional indemnity = lawyer
cargo = local surveyor
electronic claims file
- not just for the london market
- there are some excluded classes of business
- elements
1) class = data messaging system/database
2) document repository
electronic claims file
- claims setup using
unique claims reference
unique market reference
mrc is also added
info brokers should include in first advice file
mrc
binding authority certificates
loss info received
organisation onflict
insurer withdraws from the agreement party, passed to the next insurer on the list
individual conflict
chinese walls or ethical walls set up
payment on account
interim payment of indemnity
can be paid at any point in the claim cycle along with expert fees
lloyds currencies for claims payments
14
can only pay in usd if premiums were paid in usd
enterprise act 2016
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
moving claims money
- company market
- lloyds market
company = put on the electronic messaging system, not always immediate
lloyds = through XCS
third party administrators
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
loss fund
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
average
underinsurance in nonmarine
loss in marine, underinsurance=underinsurance
leakage
over payment of cliams
reservation of rightts
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
key fraud triggers
- excessive claims documents
- pressure to settle
- reluctancy to answer questions
- stories not adding up
leads to claims leakage
uk claims regulation
- dealing with consumers vs commercial
fca’s isurance conduct of business sourcebook (icobs)
- consumers –> insurers cant invoke nondisclosure and misrepresentation without showing fraud which is harder to prove
claims handling in the us
- california
- 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
sanctions can be on
governments
businesses
individuals
countries/regime
sanctions can …
- stop fund transfers
- freezing of assets
how insurers are informed of sanctions
- hm treasury
- us department of the treasury, office of foreign asset control
- crystal (lloyds site)
complaint info that should be communicated by the insurer
- who to contact
- timescales of considerations and complaints
- existancte of fos
- referral to fos doesnt remove legal rights
where fos operation is documented
fca’s dispute resolution compaliants sourcebook (disp)
legal disputes must be withrawn before contacting the fos
timeline for complaint to fos
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
when fos isnt binding
- recommends a higher money award
- decisions rejected by complainant arent binding to the respondent (being claimed against)
fos funding
- general levy on all firms
- case fee paid by the firm
fos direction award examples
- pay refused claim
- pay redress
- apologies
