Claims management and establishing effective fact finding processes

Part One of this article looked at the reasons why claims management should be viewed as an integral part of the holistic advice process. In this Part Two, Col Fullagar looks at fact finding within a claim environment and considers the case for – and contents of – a claim fact find. 

It was noted that direct and indirect risks can arise if advisers are not prepared for and involved in advising and assisting clients when they claim, and this was levered as a reason for developing a robust yet flexible process termed “claims management best practice”. 

The importance, yet weaknesses, of the insurer’s claim forms were discussed. 

Fact Finding

Fact finding might be defined as the obtaining and storing of relevant information in a form that will facilitate subsequent analysis. 

Whilst the fact finding process should have clearly defined outcomes and a business may have predetermined preferences, the process itself should be kept as flexible as possible such that allowance can be made for unique circumstances and individual clients. 

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The provisos overriding the above are, of course, that how information is obtained and stored should: 

• Facilitate the obtaining of relevant and accurate information in a professional and effective way; 
• Facilitate the storing of information in a safe and secure environment such that audit and accountability are enabled; and  
• Be highly respectful of the client and those associated with the client such that the process reflects well on the adviser, the adviser’s processes and business. 

Fact finding is the key to providing good advice – and without sound data all other subsequent components of the process are compromised.  

As it is at the time of initial advice, so it is at the time of claim. 

The diversity of template fact finds for other components of the advice process is matched by the dearth of fact finds specifically devoted to adviser involvement at the time of a claim. 

Yet, once again, it seems that consistency of process gives rise to a compelling case being made for the development and use by the adviser of a specific claim fact find. 

The insurer’s claim form is an all but compulsory component of claims management and, as such it plays a role in the fact find process; except from the adviser’s perspective, it is arguably a minor supporting role. 

If the claim form must be completed, then economies dictate that the adviser’s claim fact find should avoid duplication as much as possible, although there may well be some considerable need for expansion and clarification.  

Thus in considering the content of a claim fact find, a reasonable starting point is to ask, net of the information obtained from the insurer’s claim form: 

“What additional information might be obtained through the adviser’s claim fact find such that appropriate assistance and advice can be provided at the time of a claim?” 

The answer can only be found when there is a distancing from the restrictions of an insurer’s claim form and a venturing into the real world of appropriate advice.

Also, as with traditional fact finds, there will be considerable consistency and diversity of opinion as to where the answer to the question lies. 

Thus what follows should be viewed as “setting the scene”, recognising that space preclude more examples being provided. 

Background information 

Two questions almost universally asked of the client at the time of initial advice are: 

• Where are you; and 
• Where do you want to be? 

These incredibly appropriate questions form the core of the client’s instruction.  

Notwithstanding the answers within a claim scenario might appear obvious, it is appropriate to ask the questions, albeit in a different and expanded format. 

“Where are you?” and “Where do you want to be?” may be gleaned from the following:

• Under what constraints is the client operating? 
• Is the client physically or psychologically able to be involved in the claim’s process? If, yes, to what extent? 
• Does the client have an understandably high level of personal involvement such that objectivity is difficult at best? As such, would the client and the process be better served by the client being kept at arm’s length from the insurer? 
• Does the client inevitably become emotional at the mere mention of claims-related matters such that their medical condition is endangered; an even more compelling reason for adviser involvement?;  
• Are there issues associated with communication – for example, hearing and language difficulties, cognitive impairment, etc?; 
• Are there other constraints such as time, geographical challenges, lack of interest on the part of the client and/or a client preference to outsource to a third party?; or 
• Does the client have a preference for undertaking as much of the process themselves as possible such that they are seeking adviser guidance rather than direct action? 
• What is the intellectual position of the client? 
• Is the nature of the claims process such that the client is unlikely to be able to reasonably appreciate it, (another reason for adviser involvement, ie, to explain what is happening); or  
• Is the client’s condition such that they will be unlikely to understand what is happening, and if this situation is not immediate but it is inevitable, what is the likely time frame? 
• What is the legal position of the client? 
• Is the client the beneficiary or do they otherwise have clear title; 
• Does the client have the legal capacity to complete and sign documents; and 
• Are there complicating factors such as feral relatives and, if so, how can these problems be mitigated and/or overcome? 
• Are there other relevant client-related matters, for example: 
• Issues around time, such as the failing health of the client; and 
• Are there other parties who should be informed – the accountant, solicitor, etc,? 

Importantly and naturally, the client will want their claim to be paid, but information such as that above provides invaluable background that will assist to reduce delays and insurer misunderstandings. 

Claimed event 

Is this the first time the claim event has occurred or is this a recurrence of a previous claim event? 

Was the event giving rise to the claim acute or chronic? If it was a chronic event, when did it start and what has been its progression?  

Were there any signs or symptoms prior to the policy start date and, if so, could this be seen as relevant to the Duty of Disclosure and should an explanation be provided when the claim is lodged?  

Does the policy include a pre-existing conditions exclusion and if so, again, should research be undertaken and an explanation be provided? 

The above information will be particularly relevant if the claim occurs early in the policy duration, if the claim event is subjective by nature, for example mental and nervous disorders, or if the benefit amount is high or in excess of an insurer’s retention level.

Medical attention 

Did the client see the treating doctor concurrent with ceasing work or was there a delay”? If there was a delay; why and for how long? This can have an impact on the income protection insurance waiting period. 

If there are multiple treating physicians, hospitals, pathology laboratories, etc, which one or ones would be the best point of contact for the insurer to obtain medical records and test results. 

If there has been a recent diagnosis or change in treatment, how will these be viewed by the insurer? Could an assessment decision be deferred until the condition is more settled? If a deferment occurs, what impact will this have on claim eligibility or policy continuance? 

What is the client’s relationship with the treating doctors? Can these doctors be contacted and are they likely to co-operate and/or assist?  

What is the treating doctor’s attitude to involvement in the claim? Can direct discussions be had regarding claim reports or does the doctor see his or her self as being responsible for patient treatment alone? 

Ascertaining the above information at the start of the claim can assist with the obtaining of requirements in a timely manner rather than waiting for delays to occur and then trying to overcome them. 

Also, to allay any concerns, knowing the treating doctor’s attitude to involvement in the claim has nothing to do with seeking to influence the doctor or the content of medical reports; it has everything to do with ensuring the doctor is aware of the insurer’s requirements and can position their report to better respond to these requirements.  

Occupation details 

What is the working status of the insured: employed, self-employed? 

At the time of the occurrence of the insured event, was the client working full-time or part-time, on maternity or paternity leave, on sabbatical leave, unemployed, overseas for work or pleasure, and, if so, for how long? 

Does the client continue to have some involvement in their business, by way of being a director, signatory, guarantor, etc, and how might this be viewed by the insurer? 

If the client was on contract, was it about to expire, in which case could this be misconstrued by the insurer as the reason for a claim being made? 

How stable was the client’s occupation; for example, if self-employed, was the business financially strong or weak? Could the answers to these questions be seen by the insurer as influencing the claim? 

If the client was unemployed, for how long has this been the case, and was the unemployment voluntary or involuntary, or not really voluntary – ie, forced redundancy? 

It may also be that questioning via the fact find will identify the need for a second and more detailed fact find meeting. For example, if the claim is occupation-relevant, an expanded report of the insured’s occupation might be of assistance. This could include: 

• Business name, number of employees, turnover, representation level (ie, state/national/international);  
• Position title of client; 
• The client’s three or four main job responsibilities;  
• The three or four key functions that  make up each responsibility; and 
• The skills and capabilities needed to undertake all the functions. 

The above information should be written in such a way that a person unfamiliar with the client – for example, a claims assessor – can readily visualise what is involved in the client’s occupation. 

If relevant to the claim, details of the insured’s education, training and experience should be provided together with details of occupations the insured might be reasonably suited to by virtue of these, together with the basis for coming to these conclusions.  

If the claim event is a chronic condition, clarification may be needed about any impact the condition has had on the clients, such as: 

• Hours of work; 
• Income; and 
• Ability to perform duties; ie, are there specific duties that can/cannot be performed or is the ability to perform all duties reduced? 

Return to work 

Has the client engaged in any work; for example, during or subsequent to the expiry of the waiting period, and if so, on what basis?  

Was a return to work attempted and, if unsuccessful, why was this? 

Has the client attended or is intending to attend the work place for any reason, work or non-work related? 

How will the client’s business be impacted by the client’s absence and would an explanation of changes made within the business assist the insurer to better understand what is happening? 

Details of insurance 

Details of all insurances should be obtained (ie, for all insurers, for all types of insurance even if not immediately relevant) and for all distribution types (ie, advice-based, direct, employer-sponsored, platform and industry funds). 

Are premium payments up to date? If insurance is not in force, why is this; was it an intended act or erroneous outcome? Can the position be corrected? 

Is a copy of the policy terms and conditions available? If not, what is the best way to obtain a copy? Has a Guarantee of Upgrade operated and, if so, can/should copies of the upgraded policies be obtained? 

Is a claim under interim cover possible? 

Client’s financial position 

Details of any financial imperatives that would render claim assessment and acceptance more urgent should be noted for possible communication to the insurer – for example, loans due for repayment, loan guarantees that exist, any shortage of cash flow, etc. 

Does an income generating family member need to stop work to look after the client and, if so, for how long? 

Are there financial institutions that need to be advised of the pending claim? 

Confidentiality 

There may be issues revolving around confidentiality – for example, the need for media protection for a high profile client. It may even be necessary to put the insurer on notice. 

For split or divided families, are there issues that need to be noted and considered – for example, are all relevant parties on good terms? Are any potential beneficiaries or would-be beneficiaries the subject of material idiosyncrasies or addictive habits? 

Summary

Part One of this article looked at: 

• The important role of claims management within the holistic advice process; 
• The issue of risk exposure if advisers are not prepared for and involved in advising and assisting clients when they claim; and arising out of this, 
• The development of a robust yet flexible process termed Claims Management Best Practice. 

Part Two looked at the role of fact finding and the value of a template fact find as part of Best Practice. 

The third and final part of this article will round out the process by reviewing the role of analysis, research and a formal recommendation. 

Col Fullagar is the principal of Integrity Resolutions Pty Ltd.