claims final

8/8/2019 Claims Final

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To protect against un-foreseen events

To indemnify losses

To pay claims


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Claim is a right of insured to receive theamount secured under the policy ofinsurance contract promised by Insurer.


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Claims management means and includes all themanagerial decisions and processes concerning

the settlement and payment of claims inaccordance with the terms of insurancecontract.It includes carrying out the entire claims

process with a particular emphasis onmonitoring and lowering the claims costs.


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You need to identify and pay the valid claims

You need to identify and reject the invalid claims

Mistakes cost money and impact on brand

Claim settlement can be used as a marketing tool


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Claims management means and includes all the managerial decisionsand processes concerning the settlement and payment of claims inaccordance with the terms of insurance contract.

The claims philosophy is defined as procedure or specified approach to

settle the claims. It contains the claims management principles and alsoclaims handling methods and procedures.

The claims process includes the basic claims procedure and handling ofclaims. The handling of claims includes the monitoring of situation orevents, which cause the loss to the insured subject matter and give acause to the insured to make a claim.

The claims handling is the integrated part of the claims managementand executes the decisions made by the claims management machinery ofan insurance company.


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Life insurance is broadly categorized asMaturity claims Death claims.

Maturity claims are payable as per the terms of thepolicy. These policies are generally endowmentpolicies including money back policies.

If the insured dies before the expiry of the term of thepolicy, it is called as death claim. The death of the lifeassured has to be intimated in writing to the insurer.


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Marine insurance claims can be broadlycategorized into -

Marine cargoMarine hullOcean going vesselsSundry hulls


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The main documents generally required for processingfire claims are:-

Claim form duly completed by the insured. Copies of the policy complete with terms, conditions

and warranties. Photographs (if necessary) Police report and (if necessary) Fire brigade report (if necessary)Where the loss estimate is more than Rs. 1 crore,

intimation is to be sent to tariffAdvisory committee ( TAC )


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Motor insurance claims are broadly categorized into:

1. Own-Damage claims, and2. Third party claims.

Own-Damage claims-

Immediately on receipt of intimation of loss, either inwriting or over telephone, a surveyor should be appointedbased on the estimate of repairs.


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The documents generally required for settlement of motorclaims are:

Photographs of the vehicle at the spot of the accident,showing all

the external damages and the number plate of the vehicle. Claim form duly filled in. Registration Certificate

Driving LicenseLoad Challan/Trip Sheet Fitness CertificateCopy of the FIR Survey Report

In case of partial loss claims, submission of bills can be dispensedwith for claims up to Rs.50,OO0 in respect of private cars and twowheelers only, subject to:o The Survey Report indicating the cost of parts allowed forreplacement.


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Theft claims are either total loss claims or partial loss claims. Ifclaims settling authority is not fully satisfied, investigation ofthe theft to be arranged by an investigator who may beappointed with specific terms of reference.

The following documents should be collected from the insured

in addition to a certified copy of FIR:

Surrender of the Registration Book and the Tax Book to theinsurer duly transferred in the name of the insurers.

Ignition keys of the vehicle Certificate of insurance and the original insurance policy, if

not stolen with the vehicle. Specially worded discharge voucher.

If the vehicle is recovered subsequently the insured will have theoption to repay the claim amount already paid and retain therecovered vehicle. If the vehicle is found damaged, the insured

will be indemnified against loss of damage.


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The procedure for settling third party claims is broadly on thefollowing lines: Intimation ofClaim: Intimation about an accident resulting into third partyclaim is received through various sources:

Insured Claimant Courts by notice

Through accident report from police in Form 54 prescribed under CentralMotor Vehicle Rules, 1989.

Investigation: Investigation about the accident to collect the relevant data toquantify reasonable and just compensation as per the formats enclosed in respectof all third party claims is mandatory.

Appointment of Advocate: A competent advocate may be appointed if necessaryto ensure that the proper defence is taken where necessary and no frivolousstatements are made.

In the case where the fault of the driver is not proved, company should takeimmediate steps to deposit No Fault Liability amount as per section 140 of theMV Act, 1989.


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Miscellaneous Accident Insurance includes a number of covers, which arein the nature of package policies. In this situation specific guidelinesapplicable to the representative sections are to be followed.

BURGLARYINSURANCEThe following documents are important while processing burglaryinsurance:

Duly completed claim form Final investigation report from the police Survey Report

Photographs

It is considered preferable to appoint an investigator with surveyorslicense and knowledge of accounts as assessment of losses sometimesinvolves checking books of accounts.


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The necessary documents for processing workmen'sCompensation claims include:

Medical Certificate.

Wages statement. Proof of age as recorded by the employer.

For the permanent total disablement claims, the memorandumof agreement is required to be submitted to the workmen'scompensation commissioner while disposing compensation as per

Workmen'sC

ompensation Act.

For total claims, the perusal of death certificate and postmortem report isimportant before depositing the amount with workmen's compensationcommissioner.


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The following documents arerequired:

Duly completed claim forms

Bills, receipts and discharge cardfrom the hospitalCash memos from the

hospitalBills from chemists supported

by proper prescription Surgeons bills and receipts,bills from pathologistsupported by proper prescription


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Except in cases of a marine insurance cover, where currentmarket practices do not insist on a written proposal form, in all

cases, a proposal for grant of a cover, either for life business orfor general business, must be evidenced by a written document.It is the duty of an insurer to furnish to the insured free of charge, within 30 days of the acceptance of a proposal, a copy ofthe proposal form.

Forms and documents used in the grant of cover may, dependingupon the circumstances of each case, be made available inlanguages recognized under the Constitution of India.

In filling the form of proposal, the prospect is to be guided by theprovisions of Section 45 of the Act. Any proposal form seekinginformation for grant of life cover may prominently state thereinthe requirements of Section 45 of the Act.


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Where a proposal form is not used, the insurer shallrecord the information obtained orally or in writing, and

confirm it within a period of 15 days thereof with theproposer and incorporate the information in its cover note orpolicy.

Wherever the benefit of nomination is available to the

proposer, in terms of the Act or the conditions of policy, theinsurer shall draw the attention of the proposer to it andencourage the prospect to avail the facility.

Proposals shall be processed by the insurer with speed andefficiency and all decisions thereof shall be communicated byit in writing within a reasonable period not exceeding 15days from receipt of proposals by the insurer.


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The policy should be in force on the date of theevent.

The risk and cause of event should be covered by

the policy.

The cause of loss or the event should be directly

related to the loss. A remote cause has no place in

the settlement.

The loss should not have been caused with an

intention to gain from the situation.


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Sufficient documentary evidence of loss should bepresented along with the application form.

Multiple claims and reciprocal claims will be settled as

per the terms of the contract of insurance.

Presence of insurable interest, in case of the propertyinsurances, at least at the time of happening of event

or loss sufferings. Without having the insurableinterest in the subject matter, no person can getbenefit or compensation.


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The delay in the claims settlement will have an adverse

impact on the goodwill and marketing of the insurance.

The cost of claims will increase with the extension of timebecause the insurer may be asked to pay the interest onthe unpaid insurance amount because of the delay. Thecourt may direct the insurer to pay the costs of the case to

the assured, which results in mounting up of costs.

The delay in payment may lead to litigation which isexpensive.

-Unproductive use of manpower to defend

-expenses incurred-waste of time-will affect on the productive areas of the business

particularly in the marketing of the insurance business.


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Late submission of claim form along with sufficient proof orsupporting documents

Innocence and illiteracy of the assured

Not submitting the claims forms in full Lack of motivation or knowledge about the importance of

the claims settlement

Lack of awareness among the staff of the organizations or

defective supervision The delay on the part of the insurer may be intentional or

due to the pressure of work.


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Maintaining confidentiality and neutrality without jeopardizingthe liability of the insurer and claim of the insured;

E

xamining, inquiring, investigating, verifying and checking uponthe causes and the circumstances of the loss in question includingextent of loss, nature of ownership and insurable interest;

Conducting spot and final surveys and comment upon excess/underinsurance etc

Surveying and assessing the loss on behalf of insurer or insured;

Assessing liability under the contract of insurance;

Pointing out discrepancy, if any, in the policy wordings;

Satisfying queries of the insured/insurer and of persons connectedthereto in respect of the claim/loss;

Giving reasons for repudiation of claim, in case the claim is notcovered by policy terms and conditions;

Taking expert opinion, wherever required;

A surveyor or loss assessor shall submit his report to the insurerwithin 30 days of his appointment. which can be extended with the

consent of the insured and the insurer.


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Insurance underwriting is the process of classification,rating, and selection of risks.Thus the underwriter fixes the premium of the productconsidering various factors such as cost of risk,

administration expenses, brokerage or marketingexpenditure, claims settlement expenses and budgetedprofit. The premium is the present value of the future risksources include:

The policy applicationMedical history and examinationsInspection reportsThe Medical Information Bureau (MIB)The producer or insurance agent


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Claims settlement has a direct impact uponunderwriting. If the claims of certain insuranceproducts are frequently received they have animpact upon the claims reserves and warrantreview of the product and take decision either tomodify the terms or continue.


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Insurance fraud is any deliberate deception/dishonestycommitted against or by an insurance company, insuranceagent, or consumer for unjustified financial gain.

It may be committed at different points in the transactionby different parties such as policy owners, third-partyclaimants, intermediaries and professionals who provideservices to claimants.

The fraudulent claims may be of two categories:-The cause or the claim itself is fraudulent-The claim may be genuine but the method of calculationor the evidences, or the information submitted may befraudulent in nature.


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Creating forged documents such as wills, legal heir

certificates, assignments of the policies and other papers tosupport their claim

Deliberate destruction of the insured subject with anintention to get the policy amount

As such any fraud made by the insured or the insurer inconcluding the insurance contract or the claims settlement,makes the entire contract voicable at the option of the personon whom the fraud is played.

The fraudulent claim by the assured will deprive him theright to claim as the insurer has the right to reject it.


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The success of claim management depends on thesatisfaction of the customers. The customers areattracted to an insurance company by its state of artclaim service.


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An experienced, competent claims team cant on itsown make your CI business profitable

WHEREAS

An inexperienced, claims team can makeyour business unprofitable even if you have got the

pricing and underwriting right.

(and damage your brand at the same time)


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