PINS S4.9 Risk management policy — claims settlement risk

An insurer's risk management policy for claims settlement risk should include:

(a) clearly defined and appropriate levels of delegation of authority;
(b) claims settlement procedures and controls, including loss estimation and investigation procedures;
(c) criteria for accepting or rejecting claims;
(d) dispute resolution procedures; and
(e) methods for monitoring compliance with claims settlement procedures, such as:
(i) internal audit (but only if it is established that the internal audit unit has the appropriate skills and experience to perform such activities);
(ii) reviews by area heads or portfolio managers;
(iii) peer review (including details of the staff responsible for undertaking the peer review, the frequency of such reviews and the reporting arrangements for the results);
(iv) assessments of brokers' procedures and systems to ensure that the quality of information provided to the insurer is of a suitable standard; and
(v) in the case of reinsurers — audits of ceding companies to ensure that the value of claims paid is in accordance with contracts.
Inserted by QFCRA RM/2013-1 (as from 1st January 2015).