1
Q
What are the 5 classic managerial functions?
A
- planning
- organizing
- staffing.
- directing
- controlling.
2
Q
What are the 3 requirements for effective management planning?
A
- setting goals
- making decisions on the priority of goals
- anticipation and planning for future events that might affect accomplisments of fials.
3
Q
Define the criteria of the underwriting goals.
A
- should be inline with comapny goals
- define understandable terms, with the over-arching corporate goals directly leading to divsiion or business unit goals
- trackable goals
- clear expression
- accepted as reasonable by the employee.
- specific and actionable.
- gials are subject to suboptimization.
4
Q
Underwriting management can set department goals in what areas?
A
- mortality results to meeting pricing assumptions
- Time service
- accuracy of risk assessment by underwriters
- productivity
- research and development of risk selection policies and procedures
- participation in industry studies and activities
- employee training and development
- participation in system development and enchancement
- participation in company marketing objectives.
5
Q
In the operational planning phases, the managers planning role will continue through what?
A
- estimating necessary resources
- budgeting
- developing and communicating the operational policies that direct activities toward the goals
- establishing measurement methods for goal acheivements.
6
Q
The underwriting manager can participate in planning for anticipated expenses and mortality. For expenses what can underwriting do?
A
- determine which underwriting requirement should be obtained by the company
- negotiated vendor agreements
- determine the cost of obtaining and handling u/w requiremetns
- budget for payrolls and salary increases
- determine cost and budgets for employee training and development
- evaluate cost and benefits of allowing u/w to work remotely.
7
Q
If the u/w manager acts as the chief u/w for technical u/w, he or she can also be asked to do what?
A
- consult with pricing actuaries to dertmine the relate value of new u/w requirements
- explain and negotiate changes in u/w requirements with RI
- provide data on u/w wuality to compare with pricing assumptions
- evaluate early claims results.
8
Q
What are the 3 specific types of expense/mortality analysis that can be done by todays’ u/w managers?
A
protective value analysis
review of tele-underwriting models
evaluation of outsourcing
9
Q
Define protective value or cost/benefit anaylsys?
A
the mean by which the value of an age-and-amount requirement to the company is determined.
the cost of obtaning and handling the reuqirement is comapred to the value of the requirement.
10
Q
How do you do a protective value analysis?
A
- identify a block of cases on which the selected age and amount requirements have been obtrained
- locate cases in which the requirements has been the source of information that elf to the additional mortality pricing/rating. This is the mortality benefit of the requurement.
- determine the present value of all the extra mortality on the cases that were located, using an actuarial resource and comapny pricing assymptions.
- calculate the expenses of obtaining and processing the age-and-amount requirement on all the cases on which the requirement was received.
- compare the extra mortality (the benefit) to the expenses of obtaining the age-and-amount requirement on all the cases (the cost). IF the mortality benefit exceeds the cost of the requirement, the requirement is said to be provide “protective value”
11
Q
Depending on the company’s organizational choices, the underwriting manager can have responsibilities in several areas of the tele-underwriting process including what?
A
- creation and revision of applications forms and “drilled-down” quesiton
- collection and evaluation of protective value data on the tele-underwriting process
- review and validation of the automated risk selection process
- periodic udates to the forms and process.
12
Q
What is outsourcing?
A
defined as the performance of a function by individuals not employed by the insurance company.
13
Q
What are some benefits to outsourcing to the insurance company?
A
- company is able to hanlde additional work wihtout hiring additional permanent staff
- managers can more easily handle temporary increases in workloads
- vendors can provide automated functions that the insurance company has not developed,
14
Q
What are some negative factors in terms of outsourcing for the insurance company?1
A
- managers lose direct control over performance of functions
- there can be a loss of skill set within the insurance company if entire functions are outsourced.
- outsourced funcitons can become more costly than if performed in-house.
15
Q
What are the responsibilities of the underwriting manager in terms of outsourcing?
A
- max production capacity of the vendor; vendor capability to handle increased demands
- informaiton security and compliance wiht confidentiality requirement for medical information
- level of traning and background of the outsourced workers.
16
Q
How to managers priorituze?
A
the concept of goal prioritization recognizes that the accomplishment of one goal is more important than another at a given point in time.
- priorities shift as the company or the marketplace changes.
17
Q
Teams in most underwriting departments are structured in one of which two basic designs?
A
- functional
2. integrates (“cross-functional”)
18
Q
What happens in a functionally structured department?
A
those preforming the same or very similar work are often grouped together for manegement and reporting purposes.
19
Q
What happens in an intefrated team structure?
A
Includes inviduals from many functional areas who work together on business of a specific type or from a particular source.
-ie seperation per geographic region.
20
Q
What are the advantages for functional teams.
A
- ready access to training and guidance from experienced workers
- ability to handle volume flunctuations and re-distribution of work easily
- professional support and role models for advancement provided by the group
- development of expertise in a discipline or function
- easy monitoring of consistency between employees
21
Q
What are the advantages of an integrated team?
A
- exposure to a variety of disciplines and processes
- ability to address multi-faceted problems
- engances ability to focues on the customer rather than on the tasks
- facilitation of understanding of the entire business process by each team member
- representation of a variety of skill levels and abilities
22
Q
In order to determine which structure would be more beneficial the manager needs to assess what?
A
- comapny marketing strategy and relationship between sales and u/w
- complexity of products solf, and special programs offered
- current mortality results and expected/desired mortality preformance
- number of staff memebers, and their expertise and availability of skilled employees within the company and community.
- quality of communication within the department and the company
- availability of training resources-
- appropriate time frame for transition
23
Q
A moderate to large-size underwriting department can also include employees dedicated in while or in part to providing staff support for the manager or line underwriters. What are staff functions
A
- preparation of production or quantitative reports
- creating ad hoc reports for special projects
- research of processing or systems problems
- training underwriters or new business staff
- documentations of policies and procedures
- participation in projects or on inter-deparmental committees.
24
Q
What are the kinds of multi-location employes?
A
- remote- those who do not work in a company site
2. multi-location- they work in company office locations but multiple sites.
25
What are the benefits of offering remote underwriting or multiple site underwriting?
1. attracting and retaining underwriters.
2. increasing the potential talent pool if the manager is looking for some special skills
3. possible increase in productivity.
26
What are some challanges when managing employees who are remote?
1. comminication challenges including no face-to-face interactions, therefore communication is done in writing or over the phone. Coference calls with employees at multiple locations can be used but it can be difficult to assume everyone has understood the information to the same degree.
More frequent meetings may be required to build team rapport and mutual support.
difficult to deliver preformance feedback and conduct performance review meetings with remote underwriters.
27
When there is no face-to-face there can be difficult communication, mediums can occur over the phone but in these situations the manager should be looking at what?
1. the manager should pay close attention to teh employees comments
2. the manager should probe to make sure that the preformance review has been understood completely by the employee.
3. the manager should be speficially ask for the employees responses to each item in the evaluation and for any questions the employee may have
4. careful written documentation of phone coversations that can also be useful particularly if the manager and employee having differing veiws of the employee performance.
28
What are some other issues of management concerns that may arise when working with remote employees?
1. logistical difficulties of training at multiple sites.
2. security and confidentiality-
3. working conditions
4. quality and productivity
5. employee development
29
list the commonly used u/w production reports, suggestions on their general use to the u/w manager in evaluating gaol achievement and a suggested time frame for production the reports.
1. submitted business cases
2. approval percentages
3. financial action report
4. final action by u/w.
5. tobacco use rations
6. requirement ordered
7. time service
8. placement rations
9. unit costs
10. informals processed.
30
True or False. IT is important for u/w manager to remember that accumulation of information alone is not a management goal. The information must be significant to the business and conclusions about it must be actionable to the value.
True
31
whta is the most accurate way of obtaining information about the quality of work being done in an underwriting department?
a case audit.
| the actual case u/w workups and decisions are revierwed and compared with department standards
32
What information can be extracted from a case audit?
1. management information: data about th u/w adherence to department morality standards, consistentcy between u/wers, progress of new u/w and identification of additional traning needs.
2. u/w: feedback based on actual work its self.
3. company: protection against financial loss, documental for personal files, and self-monitoring system for internal audit purposes.
33
What id field and client feedbacl?
Producers who provide feedback to manager on the preformance of u/w.
weight this type of feedback carefully, but can provide information regarding uw's communication and negotiation skills.
34
Who can preform external audits?
1. reinsurance companies
2. insurance regulatory agencies
3. medical information bureau (MIB)
4. company's internal accounting or finance department
5. company;s external accounting firm
6. internal affairs or fraud detection units
7. contracted consulting firms
35
How are MIB audits preformed?
describes an underwriters' performance in respect to their responsibilities under the MIB bylaws, General Rules and Service or License aggreemtns.
36
How do internal affairs/ or fraud detection preform audits?
they indentify patterns of applicant fraud or misrepresentation.
37
Which underwriting guidelines should be developped and monitored by the underwriting manager?
1. age and amount u/w requirements
2. prefered criteria
3. choice of u/w manural/medical u/w guide
4. company philosophy on business decisions and preferred exceptions
5. financial u/w guidelines
6. application forms and questionnaires.
38
True or False. The reinsurers determine the value and desirability of the requirements for age and amounts.
False they can offer opinions and comment on the value, but the final decision of A&A requirements rest with the direct company.
39
When are risk audits preformed?
done on cases that have been placed or are in force.
- they provide details on u/w errors, reinsurance problems, or patterns of producer behavior that can pu tthe company at risk?
40
What are some examples of cases that might be subject to risk audits?
1. very large risk cases
2. certain types of case design
3. high mortality risk cases
4. cases exceeeding the company;s resinraucen jumbo limit
41
who is the typical audience for a risk audit?
department head or head of line of business.
- depending on the types of errors that are identified, an unsatisfactory audit can lead to additional u/w traning, improved documentation of g/ls, changes in admin risk control, additional quality control for RI admin, or changes in company u/w guidelines
42
Define the term u/w authority limit.
The max risk amount an u/w is allowed to accept alone under their signature.
-
43
What is a second signature?
agreement from an u/w whos authority limit ncludes the amount being considered.
- required to approve a case about ones auth limit.
44
The proper case assignement and underwriting authority system in a deparment will meet which 5 management needs?
1. expedite the processing of cases
2. provide a risk management control on u/w quality for the company
3. provide max utilization of the skills of the underwriting staffs
4. provide good service to the distribution sales force
5. provide growth and development opportunities for u/w
45
What is a benefit of assigning cases that exceed the u/w authority?
Whats a disadvantage?
development opportunities for underwriting by allowing expose to cases of varying face amounts, sold for many types of business and personal needs, which have been written by producers with many levels of expertise.
---
inexperienced u/w can be unprepared or untrained to handle cases, which can result in errors/ require multiple consultations with the senior u/w.
- second signature usually required
46
Why is documentation critical in the underwriting assessment?
thorugh notes a reviewer should be able to follow the assessment, identify the key items of sig underwriting information, and see decisions made for what reasonfs.
- its also critical for auditors and reinsurers to be able to evaluate the case underwriting.
47
What is the managers responsibility in terms of an underwriter;s documentation notes?
. managers responsibility for documentation of the u/w preformance.
- u/w profiles should have copies of preformance appraisals, the most recent set of case audit data, copies of relevant productions reports and notes of any conversations the mamahger has had with producers regarding the u/w preformance.
48
Who is generally responsible for determining the risk and reinsurance profiles of any in force coverage on the individual?
Underwriters or case managers.
49
The underwriting manager will typicaloly provide risk assessmrnt advice to the claims department in the review of contestable claims for evidence of material misrepresentation. What are some of the other risk mabagement services that can be provided by underwriting from claims?
1. regular review of recent (past 1-3 years) claims to categorize causes of death and identify treads in cause
2. review of individuals claims for a particular product or distribution source if claims results exceed the product assumptions, to identify any possible underwriting erros that may have occurred.
3. review of claims from cases in special underwriring programs to validate the assumptions made about mortality when the program was developed
4. analysis or testimony in case of claims litigation
50
When selecting new underwriters, managers will look for which specific qualifications through the mechanism of interviews and behavioural questionning ?
1. ability to study and learn technical information
2. ability to work under pressure or time constraints
3. familiarity with email, databases, and other software
4. clear and fluent communications skills
5. ability to prioritize and organize multiple responsibilities
6. problems analysis and problem solving skill
7. ability to work independently
8. experience in making complicated decisions on a timely basis.
* experience or university degree can also be helpfuyl.
51
Underwriting training in a time-consuming task. What is included in the comprehensive training program?
1. fundamental of life insurance
2. types and uses of life insurance products
3. contractr law, compliance, replacement, and other legal issues
4. medical impairments, anatomy, physiology and pathology
5. non-medical risks, such as aviation, avocations and foreign travel
6. financial and business underwriting topics
7. operational training on systems and work flow
8. case management and organization skills
9. communications and negotiation.
52
Department experts who do all or part of basic underwriting training can include what?
1. the trainee's supervisor
2. other underwriting managers in the department
3. physicians or nurses from the medical staff
4. experience underwriters
5. operations or administrative managers.
53
Besides in the underwriting department, what other types of outside resources can be used for underwriting training?
1. corporate training department
2. product and marketing department staff
3. the sales force
4. outside courses and seminars- training classes,
5. reinsurance manuals and reinsurance staff
6. life insurance and underwriting seminars
7. publications of the academy of Life underwriting
8. internet and webinar information.
54
What is a typical training program for underwriters?
1. typically a 6 hours per week, 3 month training followed by a close one-on-one supervision for another 3 months. Additional training can be spent on actual case underwriting and exposure to field communication.
- after 18-24 hmonths of case work experience, u/w can usually pursue some advanced traning work, most often in financial underwriting topics.
55
Underwriting managers have used various industry exam programs as basic and supplemental training programs and in some departments as prerequisites for promotion. What are some examples of major exam programs of interest to underwriters?
.1. AALU > FALU.
2. LOMA > FMLI
3. CLU and ChFC
56
Why would fully experienced underwriters want to continue education?
due to new medical developments, tax law changes, revisions of policy and procedures, and presentations by other company departments are examples of the topics that can be covered.
57
How would one train more experienced underwriters?
travel to u/w meetings
visits to sales offices and visit to client companies by reinsurers
u/w programs
mentoring of underwriters,
58
How would an underwriter go about developing their communication and negotion skills
1. training on presentation skills or sponsor local chapters of toastmasters inc.
2. slaes training organizations
3. self-study programs
59
What would be included in an effective performance evaluation system?
1. job description- for each seperate job, usually in model form
3. skill list- usually 8-12 that are essential to u/w performance
3. stnadards- written department standards
4. case review/audit programs- method for regular review
60
Who should preform case audits?
preformed by subject experts who have excellent underwriting skills. Rick management principles recommend a third part audit to assure objectivity
61
What is included in a successful evaluation system?
schedule and method for providing performance feed back to an underwriter.
62
What are the specific areas in which the manager can provide value for the company and leadership for his or her department?
in reinsurer, distributor, home office relationship and on an industry level in competitive situations, risk selection advocacy, and industry activities.
63
What is the purpose of a competition department?
they often analyze and compaire the products and services of competitiors to the own company;s offerings. The product pricing, features, and compensations are key aspects to be compared.
64
Who is the representative of risk selection principles to the corporation?
the undewriting manager`
65
What are some common attributes of a successful underwriting manager?
1. problem analysis skills
2. good to excellent technical skills
3. communication, persuasion, and negotiation skills
4. flexibilitiy
* a passion for the success of others
66
What are some examples of activities for on-going management education?
1. academic process such as finance courses or MBA degree.
2. participate in management outside the organization
3. develop sales and negotion skills
4. have a regular reading program in the current management literature
5. take optional magement couses if the coimpany has a learning and developement center
6. practive and polish presentation and traning sklills
7. create a study group to read and discuss current text on management issues
67
What is feedback analysis?
for each one's key decisions and actions, one should write down his or her expectations of the outcome and then 9-12 months later compare those expectations with the actual results.
68
According to duckers (management consultant) the best actions to follow are what?
1. concentrate on strenghts
2. work on improving your strenghts
3. discover where you intellectual arrogance is causing ignorance and overcome it
4. remedy your bad habits
ALU 202
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