Chap 5 Handling And Settlement Flashcards
Us fair claims practice and the California fair claims settlement regs (cfcspr) (unfair claim practices regarded as;
Misrepresentation of facts or policy provisions
Failure to acknowledge or act promptly on communications
Failure tO maintain reasonable standards for investigation and processing of claims
Failure to deliver prompt fair settlement of claims
Failure to explain denial for coversge
Refusal to pay claim without reasonable investigation
Effective claim handler, steps they should take,
The pragmatic approach
1 process chosen needs to be timely and appropriate- straightforward claim can be settled by phone call
2 the claim needs to be actively managed( use diary systems, claims mgmt systems)
3 important to be cost efficient (handler must choose correct investigation role taking into account size and complexity) correct processes also to be used eg approved suppliers
4- correct decision making- claims handlers to decide promptly whether claim is covered or not with tcf and to minimise complaints
Aim of CFCSPR
To set minimum standards for claim handling
To promote good faith
Promote prompt efficient and equitable settlement of claims
To discourage false and fraudulent claims
(15 days to acknowledge claim
Handling claim in non uk jurisdiction
New jurisdiction code of practice?
Rules to claim handling?
In house system to deal with - specific training?
Outsourcer 3rd party admin, are we aware of the rules - language issues
Insurance fraud
Uw fraud Claims fraud Staged incidents Material misrepresentations or exaggeration of loss or personal injury Or genuine loss made to fit the policy
Identifying potential fraud - clues from policyholder
Inconsistencies describing circumstances of loss
Circumstances unrealistic
Items subject to the claim do not match ph lifestyle
Loss includes large amount of money
Presence of out of date stock
Fraud clues from ph
Unusually familiar with terminology
Agressive trying to bully handler into submission
Make contact prior to loss to check there is still cover
Handle in person avoid corres by mail
Prefer a reduced settlement than provide documentatiom
Vague about circumstances
Other indicators
Change is phs personal circumstances
Commercial loss is company prospering or in trouble
Previous claims history
Clues from policy
Loss occurred close to inception or renewal
Sum insured recently increased or cover changed
Ph defaulted on premium
Delay in making claim
More than 2 losses in 6 months
No insurance previously
Changes in personal details not notified or stock sums insured not notified
There has been mis representation or non disclosure
After the loss the policy is cancelled
Clues from the docs
Doc supplied is unprofessional- eg home produced or contains spelling errors
Name addresses and telephone numbers incorrect or do not exist
Vat no incorrect
Signatures on claim form diff to that on proposal
Insured unable to supply documentation in support of claim
Examples of fraud - arson
Business in fin dificulty
Business lost major customer
Business losing money
Insured or families suspicious ly absent at time of loss, even the pet
No items of sentimental value lost
Stock machinary out of season eg xmas cards in july
Items on inventory diff to police report
Motor fraud
Lack of docs associated with owning vehicle
Vehicle not recovered by police but someone else
Claimant unable to supply spare car keys
No signs of forcible entry
Vehicle recovered by police but claimant does not go to collect
Preventing fraud - 5 databases
Cue - claims and uw exchange (db motor home per inj reported to ins comps)
miaft - operated by abi, linked to dvla
Falr- fine arts loss register, contains details of missing works of art
National plant and equipment register europe database of stolen plant and equipment
Insurance fraud register - db of known fraudsters, set up by abi to detect and prevent fraud
Subrogation
Insurer can pursue a claim against 3rd for loss of subject matter
Cannot be brought in insurers own name
Allows insurer to recover no more than its own payment
Operates automatically as principle of indemnity
Abandonment / salvage
Rights for the subject matter itself only
Insurer becomes owner of the goods
Insurer can make profit on the abandoned prop
Abandoned prop need not be acceptable by insurer
Contractual waiver… Where subrogation rights cannot be..
Exercised against certain parties
