Reinsurer Claims Audits


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Reinsurer Claims Audits

  1. 1. REINSURER CLAIMS AUDITSEli Wahby, Senior Consultant LOGiQ3
  2. 2. Why Audit?Reinsurers audit: • Underwriting • Administration • Claims 1. Opportunity to understand current state 2. Share knowledge/ information 3. Focus on key areas as requested by ceding company Property of LOGiQ3 © 2012
  3. 3. Why Audit?Automatic Treaty: • Reinsurer on risk as soon as ceding company on risk • Volume of business • Treaty Compliance • Business ceded to reinsurer qualifies under the treaty • Facultative submissionUnderstanding the client: • Systems • Procedures • Claims philosophy • Gaps, if any, and how addressed • Manual? • Systemic? Property of LOGiQ3 © 2012
  4. 4. Why Audit?Understanding the client: cont’d • Claim File Review • Review Application/ UW • Claims Proofs  Documentation  Completeness  Accuracy  Decisions  Investigation  Contestable Claims  Litigation • Review claims not sent to reinsurer • “Streamlined” claims process • Bordereau/ listing Property of LOGiQ3 © 2012
  5. 5. Why AuditDrivers of an audit include: • Systems conversions or upgrades impacting claims • Cyclical rotation (calendar) • Acquisitions of new blocks • Complex business arrangements (many direct systems) • Compliance (SOX, Internal Audit) • Undue delays in claims reporting, errors, inconsistencies, etc.To ensure accuracy of: • Claims reporting • Treaty parameters • Systems connectivity (direct/ reinsurance) Property of LOGiQ3 © 2012
  6. 6. Audit StreamPolicy Issue Claim Documents Reinsurance System Reinsurance Reporting Application/ Claim File/ Image TAI or Reinsurance System Inforce/Transaction FileUnderwritingWhat are we reviewing?• Application and U/W: face amount, date application signed, insured details (name/dob/age), residence, u/w specs (smoker status/table rating/premium classification, facultative/auto indicator, u/w notes)• Claim File/ Image: face amount, insured census, issue date, date of death, cause of death, contestable investigation (where applicable), litigation (where applicable), claims notes• Reinsurance System: face amount, retention, insured census, issue date, ceded amount, pool share, plan codes, treaty parameters, cession status, premium payments and refunds• Inforce/Transaction File: premium paid, allowances, insured census, transaction type Property of LOGiQ3 © 2012
  7. 7. Complexities• Multiple legal entities due to acquisitions or regulatory environment• Multiple direct issue systems• Home grown claims systems with reinsurance capabilities• Reinsurance / Claims systems modifications• Corporate retention system• Third Party Administrators• Imaging systems Property of LOGiQ3 © 2012
  8. 8. Successful Audit• Sharing of information between parties• No surprises in financial impact• Accurate information at claim time• Confidence in the data for mortality and research studies• Documentation of specific gaps, both systemic and manual• The audit report will provide a snapshot of claims operations Property of LOGiQ3 © 2012