Study 2 - The Claims Environment Flashcards Preview

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Flashcards in Study 2 - The Claims Environment Deck (20)
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1
Q

What is OSFI?

A

Office of the Superintendent of Financial Institutions

Primary regulator of federally chartered Canadian and foreign property insurance companies.

2
Q

What is PACICC?

A

Property and Casualty Insurance Compensation Corporation

Protects policyholders from the financial collapse of an insurer

3
Q

What is PIPEDA?

A

Personal Information Protection and Electronic Documents Act

Federal statute governs collection and use of personal information

4
Q

What are the four main elements to the structure of any company?

A

Administration, marketing, finance and IT

5
Q

What two elements are unique to insurance operations?

A

Underwriting and claims

6
Q

What are some examples of claims expenses?

A
  • Cause of loss
  • Defence counsel
  • Accountants
  • Private investigators
7
Q

What are the two main methods to set up reserves for claims?

A

Average cost reserving (volume reserving)
- Large numbers of claims have produced reliable statistics to accurately state reserves

Individual reserving
- Adjuster can effectively estimate a reserve, estimates based on current coverage under policy

8
Q

What are the six IBC claim agreements?

A

1) Agreement respecting standardization of claim forms and practices, and guidelines for the settlement of claims
- 60 day reporting period from independent adjusters
- Waives agreements for proof of loss on 1st party auto claims as long as repairs have been completed
- For prop, waives proof of loss for claims not exceeding $5k except for theft, mysterious disappearance or subrogation
- Various rules to interpret subro rights for auto accidents
- Intercompany Settlement Chart; percentage of responsibility in certain situations, chart does not apply for Ontario, New Brunswick or Quebec

2) Agreement of Guiding Principles (prop)
- Where prop policies overlap in coverage

3) Agreement of Guiding Principles Between Primary and Excess Liability Insurers Respecting Claims
- Agreement is used to resolve claims when liability policies overlap in coverage

4) Agreement Respecting Disputed Losses Between Property Insurance and Boiler and Machinery Insurance Policies
5) Owned and Non-owned Contents Agreement (Quebec)
6) Insurance Industry Alternative Dispute Resolution (ADR) Commitment

9
Q

What is CICMA?

A

Canadian Insurance Claims Managers Association

10
Q

What is the Canadian Inter-Company Arbitration Agreement used for?

A

Insurers can arbitrate their disputes over qualified physical damage subrogation claims among themselves, does not impact the insured

11
Q

What are some examples of how fraud can occur?

A
  • Property that does not exist or owned by someone else
  • Misrepresents how property is being used
  • Staged accidents for injury claims
  • Staged burglary
  • Vehicle theft that did not actually happen
  • Inflates claim or commits arson
12
Q

How does IBC urge the public to provide information about insurance crimes?

A
  • Submitting a confidential tip using IBC’s online form at www.ibc.ca
  • Calling the TIPS line, 1-877-IBC-TIPS
  • Canadian Anti Fraud Centre, 1-888-495-8501
13
Q

What types of law must an adjuster be familiar with?

A

Contract law, tort law, regulatory environment, consumer protection legislation, privacy legislation, other relevant government statutes and other case law

14
Q

What is the CIAA?

A

Canadian Independent Adjusters Association

15
Q

What does the CIAA lead through?

A

Advocacy
Education
Recognized professional standards

16
Q

What is stated in the CIAA code of ethics?

A
  • Insureds and claimants are entitled to receive courteous, fair, and objective treatment promptly from knowledgeable adjusters
  • A copy of written statement should be made available without charge to the statement maker
  • Adjusters do not provide legal advice or deal with a claimant or insured that is represented by legal counsel unless permission by legal counsel has been given
  • Relevant insurance coverage must be explained to the insured
  • Written consent is required to obtain medical information or records
  • Adjusters must identify themselves to claimants and insureds; if asked they will also identify their principals fully
17
Q

Adjusters owe insurers and self insurers what standard of conduct?

A
  • Report all facts that are relevant to a claim to the insurer or self insurer
  • Represent only one interest and immediately report any conflict of interest
  • Adjusters must not have any financial interest in the adjustment or take title in any salvage without written authority from their principals
  • Adjusters receive consideration only from their principals and do not engage in price setting among other adjusters. No inducements are accepted from any party who has an interest in a claim.
  • Information is to be treated confidentially, to be disclosed only as authorized by the insurer or by law
18
Q

Where do adjusters need to be licensed?

A

Independent adjusters must be licensed everywhere

Employees of a company are required to be licensed in Quebec, New Brunswick, Newfoundland & PEI

19
Q

How do the federal and provincial and territorial governments monitor and regulate the insurance
industry?

A
  • The Office of the Superintendent of Financial Institutions (OSFI) is the primary regulator of federally chartered Canadian and foreign property and casualty (P&C) insurance companies. It evaluates their financial soundness and sets their financial reporting requirements.
  • The property and casualty (P&C) insurance industry funds a special program, approved by government regulators, to protect policyholders from the financial collapse of an insurer.
  • The Property and Casualty Insurance Compensation Corporation (PACICC) is a non-profit organization that responds to claims of policyholders under most policies issued by P&C insurance companies when an insurer becomes insolvent.
  • Each province and territory has its own insurance statute to prescribe approved policy forms; the reports insurers must file; the licensing of agents, brokers, and claims adjusters; and financial security requirements for insurers.
  • Insurance Bureau of Canada (IBC) has developed a guideline to help member companies meet regulatory requirements arising from this law.
20
Q

What is the Canadian Inter-Company Arbitration Agreement?

A

• The Canadian Insurance Claims Managers Association (CICMA) developed an arbitration mechanism for settling disputes between insurers efficiently and cost effectively.
• Many insurers are signatories to the Canadian Inter-Company Arbitration Agreement (CICAA), which provides the mechanism for insurers to arbitrate their disputes over qualified physical damage subrogation claims among themselves.
• Only the interests of insurance companies are arbitrated and not the interests of the insured, even when he or she is insured by a signatory company.
• The CICMA makes rules and regulations concerning how claims are presented and determined under CICAA.
o It also chooses the arbitration facilities, outlines the policy upon which arbitration panels are selected and appointed, and prescribes territorial jurisdictions.
o It decides the basis upon which program operating expenses will be apportioned; members appointed to various arbitration panels serve without compensation.