M81 - Chapter 8 Claims

Question 1

What specialist service may large brokers offer to assist with claims?

Answer 1

Post Loss Surveys

Helping clients prepare documentation for loss adjuster

Helping with complex claims such as BI

Question 2

What must a broker do when they receive a claim, but does not have authority to handle?

Answer 2

1. Inform the client they cannot handle the claim

2. Promptly notify the insurer

Question 3

What must a broker do when they receive a claim, when they do have authority?

Answer 3

Act with due care and skill, as per FCA guidelines

Question 4

The Ministry of Justice requires all PI claims related to RTA, PL or EL claims to be uploaded via a portal by solicitors…..within what limit?

Answer 4

£1,000 - £25,000

Question 5

Why do brokers not handle claims for volume policies such as Motor?

Answer 5

Questionable value - Another link in the chain

Civil Proceedings - Encourage direct communication between client and insurer

Question 6

What are the first two steps for a broker when a claim is notified

Answer 6

1. Confirm if the claim is covered

2. immediately tell the insurer (unless a special arrangement is in place)

Question 7

What extra documents would be needed for a life policy, personal accident/sickness or theft claims?

Answer 7

Death Certificate

Medical Certs

Police report

Question 8

When will a broker get directly involved in a claim?

Answer 8

Minor Property claims

Question 9

What is the discount rate?

Answer 9

Mechanism for adjusting long term care elements to a claim, offsetting any investment earnings a claimant good achieve.

Liability claims.

Question 10

How much is the discount rate?

Answer 10

-2.5% since 2017.

Question 11

For claims notified direct to insurers, what role may the broker take?

Answer 11

Claims advocacy

Question 12

What is the ECF?

Answer 12

Electronic claims file - For Lloyds, allows how market to view and update on claims

Question 13

What factors are included in claims analyses?

Answer 13

Premium

Rating base

Previous loss estimates ‘Triangulations’

Client structure (Business unit, location, product etc.)

Type of loss

Time of losses

Question 14

Who are ELTO?

Answer 14

EL Tracing office - Independent group set up within Insurance industry to help trace Insurers for relevant historic claims EG Disease developing in later life

Question 15

What are the two types of fraud?

Answer 15

Opportunistic - Exaggerated or fabricated claims

Organised - Gangs setting out to defraud, EG Crash for cash schemes

Question 16

What must a broker do under ICOBS 8 regarding claims

Answer 16

Not put itself in a position of conflict with the customers interest, unless disclosed and consented too by the client.

Promptly notify the claim to the Insurer

A with due care, skill and diligence

Question 17

What legal obligation does a broker have if they are paid by commission or brokerage?

Answer 17

Deal with all the claims under the policy arranged?

Question 18

If paid in brokerage, does the broker have to handle claims even if the client has moved to another broker?

Answer 18

Yes, but only for policies set up by them at the time, regardless of the time.