1. REINSURER CLAIMS
AUDITS
Eli Wahby, Senior Consultant LOGiQ3

2. Why Audit?
Reinsurers audit:
• Underwriting
• Administration
• Claims
1. Opportunity to understand current state
2. Share knowledge/ information
3. Focus on key areas as requested by ceding company
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3. Why Audit?
Automatic Treaty:
• Reinsurer on risk as soon as ceding company on risk
• Volume of business
• Treaty Compliance
• Business ceded to reinsurer qualifies under the treaty
• Facultative submission
Understanding the client:
• Systems
• Procedures
• Claims philosophy
• Gaps, if any, and how addressed
• Manual?
• Systemic?
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4. Why Audit?
Understanding the client: cont’d
• Claim File Review
• Review Application/ UW
• Claims Proofs
 Documentation
 Completeness
 Accuracy
 Decisions
 Investigation
 Contestable Claims
 Litigation
• Review claims not sent to reinsurer
• “Streamlined” claims process
• Bordereau/ listing
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5. Why Audit
Drivers of an audit include:
• Systems conversions or upgrades impacting claims
• Cyclical rotation (calendar)
• Acquisitions of new blocks
• Complex business arrangements (many direct systems)
• Compliance (SOX, Internal Audit)
• Undue delays in claims reporting, errors, inconsistencies, etc.
To ensure accuracy of:
• Claims reporting
• Treaty parameters
• Systems connectivity (direct/ reinsurance)
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6. Audit Stream
Policy Issue Claim Documents Reinsurance System Reinsurance Reporting
Application/ Claim File/ Image TAI or Reinsurance System Inforce/Transaction File
Underwriting
What are we reviewing?
• Application and U/W: face amount, date application signed, insured details (name/dob/age),
residence, u/w specs (smoker status/table rating/premium classification, facultative/auto indicator, u/w
notes)
• Claim File/ Image: face amount, insured census, issue date, date of death, cause of death, contestable
investigation (where applicable), litigation (where applicable), claims notes
• Reinsurance System: face amount, retention, insured census, issue date, ceded amount, pool share,
plan codes, treaty parameters, cession status, premium payments and refunds
• Inforce/Transaction File: premium paid, allowances, insured census, transaction type
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7. Complexities
• Multiple legal entities due to acquisitions or regulatory environment
• Multiple direct issue systems
• Home grown claims systems with reinsurance capabilities
• Reinsurance / Claims systems modifications
• Corporate retention system
• Third Party Administrators
• Imaging systems
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8. Successful Audit
• Sharing of information between parties
• No surprises in financial impact
• Accurate information at claim time
• Confidence in the data for mortality and research studies
• Documentation of specific gaps, both systemic and manual
• The audit report will provide a snapshot of claims operations
Property of LOGiQ3 © 2012