question

What does claims management encompass ?

answer

1. Handling individual claims 2. Departmental claims processes and procedures.

question

(What term/s do the ) courts use to determine bad faith?

answer

harsh, vindictive, reprehensible, high-handed, oppressive, malicious

question

what benchmark are adjusters held to?

answer

Utmost good faith

question

broader claims management functions (6)

answer

1. establish procedures, 2. providing administrative support, 3. establish a system of record keeping, 4. align operations to corporate vision and strategy, 5. ensuring regulatory compliance, 6. staffing and educating claims department.

question

5 ways monitor claims operation

answer

Supervisor or team lead reviews all files of new adjusters, Claims audit, Customer survey, Letters to claimant to confirm payments, Statistical claims reports

question

(examples of) claims Reports

answer

Open / close ratios, Exceptional claims for special attention, Trends

question

(what is the) claims managers role (8 items)?

answer

Planning - day to day claims procedure, Official spokes person, Decision maker at the departmental level, Review strengths and weakness of department, Admin functions, Inspire staff, Handle conflicts

question

3 types of claims operations

answer

Centralized, Decentralized, Hybrid

question

describe Hierarchical Configuration

answer

Like multilayer wedding cake, More employees (room for advancement, specialization)

question

describe Flat configuration

answer

Single layer cake, Fewer designated managers, Staff are more multiline.

question

successful claims strategies must demonstrate (guidelines):-

answer

be specific, be challenging, be capable of being measured.

question

approaches to learning (6)

answer

learning by doing, self paced learning, interactive e-learning, coaching and mentoring, classroom instruction, case study approach

question

Processes & procedures accomplish:-

answer

promote productivity, reduce errors, control expenses.

question

support for customers

answer

treat with respect, receive help in time of crisis, claims resolved efficiently, payments made speedily

question

File leakage

answer

claims overpaid, exaggerated claims not controlled, fraud not identified.

question

reasons for site visits (4)

answer

Complex claims, severe losses, potential denials, identify subrogation, Good customer service.

question

reasons to use IA's

answer

volume of claims, holiday/ busy periods, specialist knowledge, remote areas.

question

who controls the claim if IA employed

answer

Examiner

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Examiner duties (4)

answer

analyse reports, determine further action, document the file, ensure policy conditions are applied.

question

Appraisers are retained for (4)

answer

automobiles, motorcycles, boats, other equipment

question

(6 steps for) claims handlig

answer

1.coverage analysis 2. loss reserving 3. reporting to others 4. investigation 5. evaluation 6. negotiation and settlement.

question

(how do) P&C Ins. Co's. define themselves ?

answer

by how they fulfil their promise of follow through on indemnity payments to Insureds.

question

claims are adjudicated

answer

according to the policy wording in effect at the time the claim occurred.

question

step 4 of claims handling (Auto investigation) (7)

answer

having the insd provide loan/lease info 2. certs for vehicle, 3. location of all keys, 4. names and contact info of all people having access to the vehicle, 5. description of vehicle, 7. receipts for upgrades.

question

Quantitative measurement is

answer

Stated numerically.

question

Advantages of using PPN (6)

answer

economics of scale 2. Ensuring product and service quality 3. Special priority treatment 4. Cost controlling mechanism for adjuster 5. Discount price without sacrificing quality 6. Fixed labour or unit cost

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Preferred Contractors (should have the following qualities)

answer

reputation for being honest 2. properly licensed. 3. competitive pricing. 4. no surcharges 5. commitment to handling claims promptly and fairly. 6. written guarantees 7. priority for insureds. 8. modern well maintained equipment. 9. compliant with fire, environmental and health regulations. 10. experienced staff.

question

common 1st step in setting a dept. budget is

answer

look as same dept's. budget from previous year

question

Baseline budgeting

answer

uses previous years budget to determine new budget

question

Zero based budgeting

answer

examines root need of the organisation justifying each expenditure

question

performance based budgeting

answer

deeper review of each category to ensure it contributes to the company's overall mission and goals.

question

SIU

answer

special investigation unit

question

SIU is staffed by people with exceptional investigation skills. (The ability to maintain excellent working relationships with)

answer

law enforcement officials, 2. fire officials and other organizations who investigate Insurance Fraud. Often provide training on Fraud awareness.

question

allocated expense

answer

paid by adjusters to handle the claims file.

question

Unallocated expenses

answer

Other expenses not seen on any particular claim. (cost of doing business)

question

unallocated expenses (examples)

answer

staff salaries. 2. equipment for staff 3. furniture, 4. supplies, 5. education.

question

allocated expenseses (examples)

answer

Engineers, 2. IA's , 3. Counsel, 4. appraisers

question

6 parts to Monitoring the claims function

answer

1. Control of documentation 2. Standards of Measurement 3. Multi-layered goal setting 4. Complaint analysis as a control mechanism 5. Preferred vendors and Service providers 6. Controlling Fraud.

question

total loss reserve amount is made up of

answer

case loss reserves and aggregate reserves

question

aggregate reserves are

answer

calculated by actuaries

question

over reserving

answer

leads to loss of competitive edge if actuaries have used them to calculate premium.

question

under reserving

answer

leads to loss of company resources as not enough premium would be charged to cover the future losses.

question

(name two ) reserving philosophies

answer

ultimate possible outcome theory 2. probable settlement value theory

question

Ultimate possible outcome theory

answer

A) Moderate worst case scenario B) Assumes negative outcome to judicial arguments C) Conservative D) Reserves on the high side E) Early negotiation rarely successful / most large files go to litigation

question

Probable settlement value theory

answer

A) More optimistic B) Negotiation or mediation usually result in a favourable outcome C) Less litigation / conservative judicial framework

question

what reserves would you set for a total loss fire on a home

answer

1. Building 2. Contents 3. Additional Living Expense (others could be Liability, Scheduled items, outbuildings)

question

Average cost or Volume reserves

answer

are set up when adjusters open a type of claim actuaries predetermine the reserve amount.

question

tabular Reserves

answer

actuaries deveop tables for long-tail exposures like Bodily Injuries and are affected by the Time value Of Money

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Time Value Of Money (definition)

answer

concept where money in your possession today is worth more then the same amount at a future date. (the money would earn interest overtime if it were invested.)

question

Present Value is

answer

a sum of money needed today to meet a stated obligation at a future point. (fluctuates according to interest rates and future predictions.)

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Future value =

answer

Principal amount + interest

question

loss development ( definition)

answer

the increase or decrease in the value of losses that occurs between two loss evaluation dates.

question

IBNR

answer

Incurred But Not yet Reported (reported after years)

question

IBNER

answer

Incurred But Not Enough Reserve (allowance for development)

question

Loss Triangle Method (reserving)

answer

widely used groups losses by year over successive time periods to show a history of loss development to predict losses at various points in time. Applied to forecast the Ultimate Losses.

question

LDP is

answer

Loss Development Factor

question

Loss Development Factor

answer

a calculated percentage applied to losses evaluated at certain intervals to project the the amount they will ultimately settle at.

question

audit - (definition)

answer

formal examination, analysis or verification of a process.

question

what is needed to set a reserve

answer

1. Assess coverage under the contract 2. Assess the insured's legal liability 3. Consider any avenues for recovery 4. Assign forensic experts as needed 5. Assess the damage

question

Claims audit

answer

The ultimate monitoring function to ensure that claims are handled effectively, and expeditiously. Performed to preserve the financial stability of the insurer by examining the claims operation at many levels

question

Proactive approach (audit)

answer

Audit undertaken in order to take the initiative and control the claims operations before any actual problems have been identified.

question

reactive approach (audit)

answer

Respond to problematic areas that the marketplace or regulators have already identified.

question

Full review audit

answer

Examines every facet of how a claims department operates (Costly to perform - Provides useful information )

question

Specific Audit

answer

Examines limited aspects of the operation ( Focus narrow (reserving / indemnity / financial reporting requirements)

question

External audits can be imposed by

answer

Reinsurers holding treaties . ( Focus on handling of claims in general) 2. Government regulators ( Solvency, market conduct, consumer rights) 3. Insurance company's external financial auditing firm (Focus on the financial transactions and on establishing credibility for the corporation's financial results)

question

when a company executes an audit to uncover the root cause of an issue, unknown, immediately is an example of an

answer

emergency audit

question

Subrogation (definition)

answer

is the right of an insurance company that has paid a claim to step into the shoes of the policyholder, in order to take legal action against an at-fault third party to recover what was paid.

question

In regards to subrogation, loss adjusters need to

answer

1. Promptly identify subrogation potential 2. Plan an intense investigation 3. Produce the type of evidence needed to establish legal liability against a wrongdoer

question

subrogation, when is an insurer not bound by a release signed by the insured

answer

if notice is given to the tortfeasor of the insurer's interest. (case law the insurer is not bound by the release)

question

Accident Benefits Ontario (even though DCA applies)

answer

Insurer can subrogate AB for Vehicles that are more likely to be involved in claims resulting n bodily injury (heavy commercial hits passenger vehicle,via loss transfer payment).

question

Loss Transfer form (ON)

answer

Request for indemnification form is completed when payment is actually requested.

question

Somersall v Freeman (2002) - insured was paid to the limits of the policy by Third Party ($200k) at trial in exchange for a release. Insured then sued own Insurer for the remainder of the costs.

answer

Courts agreed no prejudice as the insured was limited to the TP policy and their damages where greater than the agreed payout.

question

Garnishee (definition)

answer

legal process to seize the property, money, earnings or receivables of a debtor that are being held by a Third Party.

question

Laches

answer

undue delay in asserting the claim or right of claim (suffered some prejudice from delay)

question

Marshalling

answer

enabling creditors to realize the greatest possible recovery from a debtor

question

Law of equity over the common law - law of equity vs common law

answer

rule of equity wins

question

Indemnity agreement

answer

protect the insurer's right to recoup any losses or expenses paid on the bond

question

Quia Timet Order (Because he fears)

answer

is an injunction sought when the plaintiff wants to prevent harm before it occurs (needs strong evidence harm will occur)

question

Mareva injunction

answer

used in order to force a third party to preserve their assets in anticipation of a recovery action.

question

Anton Piller Order

answer

granting civil authority for search and seizure of relevant property (possessed unlawfully or being used illegally)

question

what is the only province in which subrogation is sought in the insurers name

answer

Quebec (unless goes to federal court)

question

Litigation (definition)

answer

carry on a legal contest or legal challenge by judicial process.

question

Litigation Plan

answer

Maps out how a case will proceed, with a timetable that includes judicial deadlines and estimates when the claim will be resolved. Includes time limit to respond to pleadings.

question

interrogatories

answer

written questions prepared by a party to a civil action to serve on another person, who is required to reply in writing under oath.

question

Counterclaims

answer

denies the plaintiff allegations and asserts an independent cause of action against the plaintiff. (courts may exclude the Counterclaim)

question

three conferences used in Ontario courts for claims resolution.

answer

1. Case Conferences 2. Settlement conferences (evaluate strength of both cases) 3. Trail Management Conferences (streamline presentations for trial)

question

conflict of interest

answer

when a judgement of legal counsel on behalf of a client could be adversely affected because of competing interests.

question

if the insurers and the insureds interests differ

answer

the insurer and insured have a conflict of interest. (different lawyers should be retained for each, in a court situation).

question

San Diego Federal Credit Union v Cumis (1984)

answer

The court ruled that the insured should be permitted to hire independent counsel at the expense of the insurer.

question

Bifurcation

answer

to separate the issues in a lawsuit. (courts are reluctant to Bifurcate)

question

cross-claim

answer

the defendant may launch a cross-claim against a co-defendant in the action, asserting a related cause of action.

question

Common settlement calculation errors

answer

Making certain deductions after liability split are accounted for. 2. Improper inflation of a proposed settlement by applying prejudgement interest to the entire settlement. 3. performing gross up calculations on asset amount (rather than the remaining amount after agreed liability split)

question

In house counsel (7 benefits)

answer

1. Claims tend to settle much earlier 2. Have a smaller case load 3. Proactive handling 4. More cost efficient 5. Only works on insurers cases 6. On salary 7. Settlement authority

question

Coverage counsel

answer

to offer an opinion as to whether a claim is payable under the policy (avoids conflict of interest)

question

Why ignore potential conflict of interest?

answer

1. Another lawyer of comparable expertise and experience not available 2. Extra cost 3. Delays 4. Inconvenience of getting lawyer unfamiliar with case

question

Litigation process

answer

1.Legal counsel receives the assignment 2. Reviews the file and applies legal principles to determine causation, assess liability, and assess damages 3. Tests the validity of the plaintiff's case and works out a theory of defence

question

Pleadings

answer

Sets out the claim against the defendant and the amounts claimed

question

Privilege

answer

communication between counsel and client, and documents or materials prepared by counsel acting for his or her client in anticipation of litigation. ( do not need to be shown to the opposing side)

question

what provinces require disclosure of policies

answer

NB, ON, PEI, MB

question

Pierringer release

answer

is disassociated from the litigation by settling directly with the plaintiff in exchange for a release.

question

Mary Carter agreement

answer

the settling defendant is willing to share information that is favourable to the plaintiff against the non-settling party. In return, the plaintiff caps the liability of the settling party. (courts may see this as prejudice against defending, non settling, party)

question

nuisance settlement (why settle)

answer

1. Unclear legal issues 2. Lack of witnesses 3. Inadequate documentation (weak case is not this)

question

Excess of limits letter

answer

required when the amount claimed exceeds the liability limits of the insurance policy. ( the insured should be advised in writing.)

question

Duty to defend

answer

Arises when a suit brought against the insured alleging facts that would elicit a payment under the policy

question

Pleading rule

answer

the priciple of determining the duty to defend from the pleadings

question

services used in littigation

answer

1. PI's 2. Mediators 3. Arbitrators 4. Expert Witnesses 5. consultants 6. court reports 7. copying services 8. case management workers 9. video conferencing producers 10. structured settlement providers 11. legal experts 12. others

question

Catastrophe

answer

is a sudden disaster of immense proportions that causes havoc to people, property, and the natural environment.

question

Insurance claims catastrophe

answer

Sudden and unexpected event causing many insured claims, often on a large scale. The result of an insured peril. Must be severe enough to have significant financial consequences for the insurance industry.

question

CERP =

answer

Claims Emergency Response Plan

question

CERP

answer

Help insurance industry handle large number of insured losses arising from an emergency.

question

what companies must consider in a Cat situation

answer

1. Implications of choosing to overlook policy exclusions. (No claim to reinsurers) 2. Communicating with policyholders (Helping them deal with overwhelmed and discouraged feelings) 3. How it affects their own operations (Need contingent backup resources) 4. How the government will react (Impose sanctions to protect customers) 5. How to identify and segment CAT claims (coded)

question

Cat Logistics (how its done)

answer

1. Liaise with others, (depts. Gov, etc) 2. assign adjusters (IA's, form temp team) 3. Analysing the existing claims infrastructure in order to develop 4. Develop framework for the flow of communication. 5. Determining equipment needs 6. Organizing transportation & Documentation 7. Organizing lodging for team 8. Organizing a control centre for operations.

question

Catastrophe orientation sessions

answer

1.Role of each member of CAT team 2. Local By-laws affecting insurance activities 3. Local construction techniques 4. description of condition of area 5. Description of police and other service vehicles 6. Language issues affecting communication. 7. Local Cultural Issues 8. Mood of local residents 9. reminder as to duration of adjusters term 10. Description of working conditions

question

Evaluating the CAT response

answer

1. How the operation fared 2. Outcome of customer service 3. Operation expenses 4. How policy wordings fared?

question

Class actions history

answer

1. Originated in England in the 17th century (Bill of peace) 2. 1833 American courts 3. Canada through provincial rules of civil procedure 4. Quebec was the first province to legislate the modern class action framework in 1978 5. Canadian Western shopping centres inc v Dutton (2001)

question

Three main objectives (for class action)

answer

1. Streamline judicial process 2. distribute legal costs over large numbers of people 3. Act as a deterrent for wrongdoers.

question

Class action

answer

Is a civil procedure used to secure a judicial remedy for a group of persons who have common interests in an actionable cause.

question

main reasons for Class Action in Canada

answer

1. mass torts, 2. products liability, 3. anti-trust violations

question

Purpose of a Class Action

answer

To afford greater access to justice to more people, pooling of their legal and financial resources to launch a single action.

question

downside of class action

answer

1. Encourages more litigation 2. Permits claims of nominal individual value that might otherwise never have been instituted

question

Substantive law

answer

Consists of all laws that define, describe, regulate, and create legal rights and obligations.

question

Procedural law

answer

Law that establishes the methods of enforcing the rights established by substantive law.

question

to start a Class action you must

answer

1. apply to the courts for approval to use the class action procedure. 2. A motions judge assesses whether criteria outlined in legislation has been satisfied.

question

certify class actions (Requirements )

answer

1. Pleadings must disclose a cause of action. 2. 2 or more persons have common issues 3. would be the preferred procedure for common issues 4. there is a representative plaintiff. (who has requirements)

question

the representative plaintiff (requirements in class action)

answer

1. Fairly and adequately represents the interests of the class 2. Produced a plan for the proceedings on behalf of the class. 3. does not have a conflict of interest with the class on common issues.

question

In favour of Class action

answer

1. Questions of fact or law common to the members of the class are dominant over any questions affecting only individual members. 2. Other means of resolving the claims are less practical or less effective

question

Against Class Action

answer

1. Members have valid interests in controlling the prosecution of separate actions 2. Proceedings would involve claims that are or have been subject to other proceedings 3. it would be more difficult to get relief than if other means were sought.

question

Who pays legal fees (class action)

answer

in Canada in General - the loser pays (there is a no cost rule which may apply)

question

PIPEDA (January 1, 2004)

answer

Personal Information Protection and Electronic Documents Act (private sector obligations)

question

Privacy Act (July 1, 1983)

answer

obligations of Federal Gov. and Agencies.

question

Privacy commissioner of Canada

answer

oversees PIPEDA

question

ombudsman

answer

1. Investigates complaints from individuals. 2. Makes recommendations to help a business improve how personal information is handled 3. Mandate is problem solution not retribution or punishment 4. can publish in media or Federal Court if extreme case.

question

during the course of an investigation or audit (privacy)

answer

It is a criminal offense to obstruct the commission or audit, or to knowingly dispose of personal information that is the subject of a request.

question

Personal information

answer

any factual or subjective information, recorded or not, about an identifiable person

question

10 privacy principles (PIPEDA)

answer

Accountability Identifying purposes Consent Limiting collection Limiting use, disclosure, and retention Accuracy Safeguards Openness Individual access Challenging compliance

question

Exceptions to Privacy Legislation

answer

1. to a lawyer representing the Co. 2. to collect a debt or judgement. 3. to comply with subpoena, warrant, order by court or similar jurisdiction.

question

can refuse access to information if (PIPEDA)

answer

1. Personal information about another person may be revealed 2. Commercial confidential info could be revealed. 3. someone's life or security my be compromised. 4. Info collected without consent related to investigation on lawful exeption 5. info generated during Dispute resolution process 6. info protected by solicitor-client privilege.

question

Formal teams

answer

stable dept. or section within recognised structure (BI team, AB Team, PD Team)

question

Informal teams

answer

Created to deal with a particular situation and are disbanded after performing their function (Cat Team)

question

What makes a successful team

answer

Share aims, have a common work language, able to manage relationships as well as tasks.

question

How can a manager gain awareness about their team?

answer

Strolling around the department, inviting informal chats.

question

Encouraging the team concept

answer

1. Having a consistent approach to solving problems 2. Taking into account people's characteristics and technical skills 3. Encouraging supportive behaviour 4. Creating an open, healthy climate 5. appreciate the teams progress 6. Providing training opportunities

question

Effective teams

answer

team members are motivated, hard-working, and prepared to contribute extra time and effort in a crunch.

question

Herzberg's Theory

answer

focuses on characteristics he called hygiene factors and motivating

question

Herzberg's Hygiene factors

answer

organizational policy and rules, the kind of supervision people receive, working conditions, interpersonal relations, salary, status, and security

question

Herzberg's Motivating Factors

answer

1. gain a sense of achievement; 2. receive managerial recognition of their achievements; 3. perform interesting tasks; 4. advance to higher-level tasks

question

Maslow's Theory

answer

held that employees are motivated by a hierarchy of human needs, and that a person who has achieved one level will inevitably seek the next.

question

Motivators in Maslow's Theory (hierarchy from lowest to highest)

answer

1. basic survival needs (food, clothing, shelter); 2. safety and security needs (protection from deprivation and threats to the individual /family); 3. social needs (sense of belonging); 4. the need for esteem (self / others) 5. the need for self-fulfilment / self-actualization (realizing one's full potential).

question

Equity Theory

answer

employees compare the outcomes of their work with the outcomes experienced by others in similar positions. If an employee believes his or her rewards are less than those of others who have performed at the same level, the employee will decrease the quality or quantity of work to compensate for the difference.

question

Other Motivating Factors (manager)

answer

1. Know employees (personal interests) 2. Assess strengths and weaknesses 3. Involve staff in discussions 4. Recognize performance (verbal or other)

question

steps help to create an appropriate atmosphere for brainstorming sessions

answer

1. Use humour as a stimulus for creativity. 2. Invite the group to propose solutions openly and without restraint. 3. Do not judge ideas during the brainstorming.

question

Communicating Abstract Ideas

answer

Because many people are visually oriented, using charts, maps, and other such devices to present ideas can make concepts concrete and thus easier to understand.

question

Change in approach to stimulate fresh thinking

answer

A fresh, non-linear approach requires fresh thinking that can lead to innovative action. Try stating a problem in reverse

question

Positive approach to problems

answer

Any problem can be seen as an opportunity to make things work more smoothly.

question

are there more quizlet apps on this subject?

answer

http://quizlet.com/56819358/c112-claims-management-flash-cards/

CIP C112 Practical Issues In Claims Management (2011), April 2015 – Flashcards

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