How Many Insurance Executives Does it Take to Make a Claim Decision?
Although a quick response and a punch line might be expected, the answer may not be clear cut…
Are Two Heads Better Than One?
Making a claim decision is multi-faceted. It reflects opinions from the claim, underwriting, legal and marketing or business angles. The claim examiner builds a timeline of events and determines whether medical, occupational or financial information obtained as a result of an investigation significantly differs from what was available at time of underwriting. The underwriter determines whether the information learned at time of claim would have materially altered the original risk assessment. A review of treaty guidelines will set out what steps may be taken. For example, policy wording may be applicable to clarifying specific situations along with the venue of potential litigation and existing case law offering valuable insight. Statutory requirements in the form of state regulations might also have specific definitions of what constitutes materiality. Finally, the relationship with the client both current and prior if applicable along with similar situations should be considered.
Are Too Many Cooks Spoiling the Broth?
In a perfect world, everyone is available and everyone agrees, using the same deciding principles and process each time. Since that can’t be expected in real life, a multitude of questions emerges. For example: What happens when one or more of the opinion givers is unavailable? Is the opinion skipped, or is an understudy appointed? Does the understudy play the role in exactly the same way? Are all opinions obtained every time? Do the treaty guidelines allow enough time to accommodate the logistics of collecting the various opinions? What is the effect of any type of process inconsistency compared to published procedures? Suppose everyone doesn’t agree. Which opinions should take precedence? Is the fact that there are differing opinions a detriment to potential litigation success? How is this information collected? What form should it take? Is written documentation necessary to provide a tangible record of decision making? Who is the keeper of the information regarding whether a similar situation has happened in the past and how it may have been handled? How is that information stored and shared? What is the importance of this in terms of the claim determination? Would it matter if a similar situation occurred, but the client was different? There may be more questions and nuances than there are contestable claims.
Recipe for Blended Broth
Making a claim decision involves a blending of multiple opinions. Realizing that the blending may not always go smoothly allows the opportunity to consider the logistics and effects of the way decisions are made. Procedures need to take into account that the world isn’t perfect and to include contingencies for situations that are probably going to happen rather than ones that might occur. Likewise, the documentation of agreements and disagreements should be discussed upfront, with all parties fully aware of the effect of opinion content on a particular claim decision or future decisions. The output of the process of decision making, its storage and sustainability needs to be given at least as much consideration as the claim decision itself. With all parties as well informed of what the process outcome should be as they are the effects the process has on the decisions, the resulting decisions should be blue ribbon winners.