Chapter 6: The Claim Function

Question 1

Claim Function Goals

Answer 1

• Complying with the contractual promise

- Supporting the insurer’s financial goals

Question 2

Claim Information Users

Answer 2

• Marketing
• Underwriting
• Actuarial

Question 3

Claim Department Contacts

Answer 3

• The public
• Lawyers
• State regulators

Question 4

Claims Department Structure- Claims Personnel

Answer 4

• Staff claims representative
• Independent adjusters
• Third-party administrators
• Producers
• Public adjusters

Question 5

Measures Used to Ensure Regulatory Compliance

Answer 5

• Claims guidelines, policies, and procedures
• Controls, such as reports, access security, authority levels, and tracking
• Supervisor and manager reviews
• Claims audits

Question 6

Activities in the Claim Handling Process

Answer 6

• Acknowledging and assigning the claims
• Identifying the policy and setting reserves
• Contacting the insured or the insured’s representative
• Investigating and documenting the claim
• Determining the cause of loss, liability, and the loss amount

Question 7

Six Common Methods of Setting Reserves

Answer 7

• Individual case method
• Roundtable method
• Average value method
• Formula method
• Expert system method
• Loss ratio method

Question 8

Types of Claims Investiagtions

Answer 8

• Claimant investigation
• Insured/witness investigation
• Accident scene investigation
• Property damage investigation
• Medical investigation
• Prior claim investigation

Question 9

Claim Documentation Components

Answer 9

• Diary systems
• Activity logs
• File reports

Question 10

Framework for Coverage Analysis

Answer 10

• Is the person involved covered?
• Did the loss occur during the policy period?
• Is the cause of loss covered?
• Is the damaged property covered?
• Is the type of loss covered?
• Are the amounts of loss or damaged covered?
• is the location of the loss covered?
• Do any exclusions apply?
• Does other insurance apply?

Question 11

Exclusions to Coverage Can Include

Answer 11

• Persons
• Causes of loss
• Types of property
• Types of damage
• Other circumstances