INSURANCE CLAIMS
contacts the policyholder/ claimant/beneficiary or sends an acknowledgement of receipt as soon as the claim is received. Depending on the context, one or all of these potential counterparts may be relevant.
Subsequently, if it appears that the claim cannot be settled rapidly, the company notifies the policyholder/claimant/beneficiary and indicates that he/she will be re-contacted within a reasonable time limit.
When it is necessary for the policyholder/claimant/beneficiary to provide specific documents when filing a claim, the company sends him/her the list of these documents as soon as possible.
In addition, a specific notification listing the elements to be provided when another insurance company is involved is sent to the policyholder/claimant/ beneficiary. If it appears that the claim is not covered by the insurance policy, the company sends a notification as soon as possible to the policyholder/ claimant/beneficiary, explaining why it is not covered.
When the claimant is not the policyholder, the company sends him/her information on his/her rights and duties when relevant. When appropriate, the insurance company notifies the policyholder of his/her right of subrogation and informs him/her of the main principles governing the subrogation procedure.
Once a claim has been filed and, when applicable, after any additional documents that are required to process the claim have been received, the file established by an insurance company must contain the following documents; Claim filing number, policy number, name of the policyholder/claimant/ beneficiary, summary sheet showing development / review of the claim, type of insurance concerned;
The opening date of the file, date of loss, reporting date, description of the claim, information on claimants, assessment date, electronic and/or paper copy of the adjustors’ and investigators’ reports where applicable, identity of the adjuster, estimated cost of damage, dates and amounts of payments, date of denial if applicable, name of agent/broker/intermediary, if applicable, date of file closure and documents recording contacts with the policyholder/claimant/ beneficiary.
In order to cut down on the growth of fraudulent claims and the rise in premium costs that results from them, companies must take the following steps; They should establish compliance programs for combating fraud and money laundering activities appropriate to their exposure and vulnerabilities.
In the claim filing phase, they should discourage fraudulent practices by making the policyholder/claimant/beneficiary aware of the consequences of submitting a false statement (which in particular could be liable to prosecution) and/or an incomplete statement.
To this end, insurance companies should place a notification on their claims forms that make reference to the appropriate law, statute or insurance regulation that addresses the filing of fraudulent or incomplete claims. Where legally possible, companies should participate in relevant databases where claims susceptible to be fraudulent would be reported.
Moreover, public authorities should encourage or take steps to initiate the creation of a public or private bureau of insurance fraud. Apart from this, companies should provide their claims department staff with adequate training on fraud indicators.
Claims assessment should involve methods of taking into account specific factors such as depreciation; discounting or negligence on the part of the victim is clearly outlined in the claim file. Any loss evaluation methods used by the company are reasonable and coherent. The insurance company uses internal methods for assessing claim values based on the applicable law or legislature.
Companies that use claims adjusters or agents/brokers/ intermediaries will need to ascertain their competence and qualifications. Moreover, if these claims adjusters/intermediaries were to commit any errors or misappropriation of funds affecting their policyholders, claimants or beneficiaries within the framework of the contract with the insurance company, the latter would be held responsible.
Consequently, companies may decide to limit the scope of action of claims adjusters and intermediaries (for example, by setting ceilings on the number of claims they can handle). Companies notify policyholders/ claimants/beneficiaries whenever they use independent claims adjusters or intermediaries.
When the damage is assessed through a written estimate made on behalf of the insurer/insurance company, the insurer sends the policyholder/ claimant/beneficiary a copy of the document used to set the amount of compensation.
A company’s claim procedures are gathered together in a manual for internal use. At least, one staff member should be responsible for ensuring that the manual is kept up to date and additions/ amendments are made when necessary. Companies’ claims department staff possess proper qualifications. To this end, companies encourage ongoing internal or external training of their claim staff.
Regular internal audits are carried out for all claims not settled in their entirety. Internal audits apply to all stages of the claims management process. Peer reviews where the claims department staff review one another’s files could also be carried out. Look out for Part II.
Note: In this column I offer general insurance information. Do not completely rely on this column in making insurance decisions. For specific guidelines email; insuculture@ gmail.com
Insurance companies should place a notification on their claims forms that make reference to the appropriate law, statute or insurance regulation that addresses the filing of fraudulent or incomplete claims. Where legally possible, companies should participate in relevant databases where claims susceptible to be fraudulent would be reported.