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Claims reporting, pmt patterns, frequency & severity can be altered by changes in:
- 1. Classes of business written or geographical focus
- 2. Policy provisions (policy limits & deds)
- 3. Reinsurance (limits & attachment points)
- 4. Claims management philosophy (occur often with mgmt changes like clm settlement & case reserve)
- 5. Claim processing lags with new systems
- 6. Legal & social environment (court back-logs)
- 7. Economic environment (increase in inflation rate/decrease in interest rate)
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Questions for Reinsurance Managers
- 1. Provide details of reinsurance treaties & agreements, both ceded & assumed
- 2. Details of ceded treaties
- *Retention level or QS %
- *Reinsurers involved incl participation
- *Details of sliding scale premiums, commission, profit commissions
- *Any problems/delays in collecting reinsurance
- 3. Provide details on internal/sister company reinsurance agreements
- 4. Secured reinsurance program for next year? Term?
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Questions for Senior Mgmt - describing company operations
- 1. Organization chart with recent changes
- 2. Details of ownership
- 3. Description of types of business written + special progrms
- 4. Description of mktg (direct, indep agent)
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Ratio of Pd to Rpt
- Test for chgs in CO adequacy, settlement patterns
- Downward trend in ratio could be result of
- Decreasing paid claims
- Increasing case adequacy
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Ratio of closed to rpt clm cnt
- Measures chg in settlement rate of clms
- Chgs in ratio could be due to
- Large caT
- Chg in guidelines for establishment of a clm
- Restructuring of clm field offices
- Introduction of new call center
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