Chapter 32

Question 1

For what purposes might data reconciliation checks be useful?

Answer 1

Data reconcilliation checks might be quite useful where

an investigation is being carried out on a regular basis, a reconciliation of current data with those used for previous one can be attempted

Question 2

List 5 types of policy data checks (5)

Answer 2

5 types of policy data checks

Data reconciliation checks’

Consistency checks

Unusual values

Spot checks

Analysis of surplus and/or analysis of embedded value profit

Question 3

What are the steps involved in the data reconciliation? (5)

Answer 3

• first group data sensibly eg by year of entry within each broad contract type
• using data similarly grouped relating to business that has
  +come onto insurer’s books and gone off
  +between the dates of the two investigations
• the following check is done for each group
  data at previous investigation + business come into books - business gone of books = data at current investigation

Question 4

Give examples of checks of consistency for non-unitised contracts (3)

Give examples of checks of consistency for unitised contracts (2)

Answer 4

Consistency checks for non-unitised contracts

• Average sum assured or average premium per class of business sensible and consistent with figure for previous investigation
• Ratio of basic sum assured (or equivalent benefit) to premium payable per class of regular premium business
  sensible and consistent with figure for previous investigation
• cashlow vs revenue account

Consistency checks for unitised contracts

• Number of units purchased by premiums and en-cashed to pay benefits
  consistent with corresponding revenue account items
• Internal unit movements eg for charge en-cashments
  consistent with surplus emerging during year