PGI Claims Management 1

Question 1

What is 'large loss management' in commercial insurance claims?

Accepted Answer

A structured approach to handling significant claims involving early notification, dedicated claims handlers, expert appointments, and proactive communication

Answer

Managing claims only above S$1 million

Answer

Automatically referring large claims to MAS

Answer

Delegating all large claims to reinsurers

Question 2

What is the role of a 'forensic accountant' in major commercial insurance claims?

Accepted Answer

A specialist appointed to quantify business interruption losses, verify financial records, and calculate complex financial aspects of commercial claims

Answer

An accountant who investigates criminal fraud exclusively

Answer

An accountant who audits the insurer's financial statements

Answer

A government official verifying insurance reserve adequacy

Question 3

What is 'claims leakage' in insurance claims management?

Accepted Answer

Overpayment of claims due to poor processes, fraud, inadequate reserving, or failures in claims handling, representing value lost from the claims fund

Answer

Water damage claims arising from pipe leaks

Answer

Claims payments made by mistake to wrong parties

Answer

Claims that are not reported promptly

Question 4

What is 'incurred but not reported' (IBNR) reserves and why are they important?

Accepted Answer

Reserves set aside for losses that have already occurred but not yet been reported to the insurer — essential for accurate financial reporting

Answer

Reserves for reported claims not yet paid

Answer

Reserves for cancelled policies

Answer

Reserves for future premium income

Question 5

What is 'subrogation recovery management' and why is it important for insurers?

Accepted Answer

Actively pursuing recovery from third parties responsible for losses after paying claims, to reduce the net cost of claims

Answer

Managing the process of transferring policies to new policyholders

Answer

Managing the insurer's subscription to reinsurance markets

Answer

Recovering unpaid premiums from policyholders

Question 6

What is the purpose of 'claims audits' in insurance company governance?

Accepted Answer

To independently assess the adequacy, consistency, and accuracy of claims handling processes, reserves, and payments against policy terms and best practice

Answer

To audit premium payment records

Answer

To audit the insurer's investment portfolio

Answer

To audit agent commission payments