Life and disability claims

Objective
To develop in the candidate: a knowledge and appreciation of the claim considerations for life and disability and critical illness insurance; a knowledge of the legal, medical and financial factors; the ability to apply knowledge and skills to practical situations; the ability to synthesise different aspects of the syllabus and apply them to given scenarios.

Summary of learning outcomes

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Introductiontoclaimsmanagement Initialclaimconsiderations Claimsassessmenttoolswhatisavailableandwhentousethem Financialassessment Determiningvalidityoftheclaim Legalandregulatoryissuesatclaimstage Actuarialconsiderationsandreassurance Disabilitytermsandconcepts Disabilityassessment Medicalaspectsofclaimsassessment Rehabilitation

Important notes
 ThesyllabusisexaminedonEnglishlawandpracticeunlessotherwisestated.  TheAprilsessionwilltestthelegalpositionasof31stAugustoftheprecedingyear.  TheOctobersessionwilltestthelegalpositionasof28thFebruaryofthesameyear.

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1.
1.1

Introductiontoclaims management
Roleoftheclaimsdepartment Candidates should be able to: describe the role of the claims department.

2.2

Underwriting Candidates should be able to: discuss the importance of reviewing the proposal form and underwriting papers; discuss the principles of underwriting.

1.2

Claimsphilosophy Candidates should be able to: explain the claims philosophy of a life office, including the approach to: customer service; early intervention; claimant expectation.

3.
3.1

Claimsassessmenttoolswhatis availableandwhentousethem
Communication Candidates should be able to: explain the importance of effective briefing and questioning communication used in the claims handling process.

1.3

Productcontrolcycleandriskmanagement Candidates should be able to: discuss the product control cycle; discuss the principles of risk management.

3.2

Medicalreports,notesandexaminations Candidates should be able to: describe the use and purpose of GP reports and notes; consultant reports; independent medical examinations; functional assessments; vocational assessments.

1.4

Majorbenefittypes Candidates should be able to: discuss the major benefit types, including: income protection/mortgage protection and waiver of premium; critical illness; terminal illness and permanent total disability; death; describe the other benefit types, including: long-term care; hospital cash; accident.

3.3

Claimsforms,questionnairesandother evidence Candidates should be able to: explain the use and purpose of occupational questionnaires and job descriptions; explain the use and purpose of financial questionnaires and other financial evidence; explain the importance and use of claim forms.

1.5

Groupandindividualbusiness Candidates should be able to: explain the differences of approach between group and individual claims. 3.4

Privateinvestigators Candidates should be able to: explain the use and purpose of private investigators; explain the legal and industry guidelines for the use of private investigators.

1.6

Filemanagement Candidates should be able to: explain the importance of file management and the implications of poor file management.

3.5

Homeandemployervisits Candidates should be able to: explain the use and purpose of home and/ or employer visits in the handling of life and disability claims.

2.
2.1

Initialclaimconsiderations
Policyinforce Candidates should be able to: determine whether a policy is in force; discuss the procedure in respect of a lapsed/paid up policy; discuss the procedure and explain the implications in respect of a lost policy; describe the procedure in respect of proof of age. 3.7 3.6

Occupationaltherapists Candidates should be able to: explain the role of occupational therapists in life and disability claims assessment. Proofofdeath Candidates should be able to: explain the procedures and documentation required for death claims; explain the role and procedures of the coroner.

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3.8

Sourcesofinformation Candidates should be able to: explain how other sources of information such as the internet, Companies House and the ABI register are used to assist with life and disability claims processing.

4.5

StateBenefitsystem Candidates should be able to: describe the State Benefit system and in particular: available Benefits; assessment and entitlement to those Benefits.

4.
4.1

Financialassessment
Financialunderwriting Candidates should be able to: describe the financial underwriting considerations applicable to the following types of claim: income protection; critical illness; total permanent disability; death.

4.6

Proportionateandrehabilitationbenefits Candidates should be able to: discuss the purpose, nature and application of proportionate and rehabilitation benefits.

5.
5.1

Determiningvalidityoftheclaim
Claimpolicyconditions Candidates should be able to: assess the nature and application of standard claim policy conditions for each benefit type, including exclusions.

4.2

Limitationofbenefit Candidates should be able to: assess the application and implications of limitation of benefit, particularly in relation to: income/mortgage protection; key person/locum cover; group income protection benefits. 5.2

Theroleofexperts Candidates should be able to: describe the role and use of experts in life and disability claim handling, including: chief medical officers; solicitors; accountants.

4.3

Employmenttypes Candidates should be able to: evaluate the importance of the following forms of employment and the evidence required for claims assessment: employed; self employed; employed directors; partnerships; combined business structures; personal service providers; policyholder/spouse who run their own business. 5.4 5.3

Proceduresforincomeprotectionclaimsand waiverofpremium Candidates should be able to: discuss the procedures for regular payment claims and waiver of premium. Groupclaims Candidates should be able to: discuss the issues posed by the following for group claims: actively at work; switched schemes; pre-existing conditions; eligibility; termination of employment; free cover; death in service; scheme salary; rights of third parties.

4.4

Otherfinancialconsiderations Candidates should be able to: discuss the purpose, nature and effect of other financial considerations, including: benefits in kind; dividends; commission; depreciation; drawings; pension. 5.5

Criticalillness,terminalillnessandtotal permanentdisablement Candidates should be able to: assess the issues in relation to the interpretation of definitions for critical illness, terminal illness and permanent total disablement claims.

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5.6

Determiningtitle Candidates should be able to: assess the issues affecting the determination of title, including: death; assignment; trusts; power of attorney; Court of Protection orders; bankruptcy.

6.3

Utmostgoodfaith Candidates should be able to: discuss the application of utmost good faith to life and disability claims, including: duty at proposal; duty at commencement/reinstatement; duty at claim stage.

6.4

Legislation Candidates should be able to: outline the main provisions of the following pieces of legislation and their application to life and disability claims: Financial Services and Markets Act 2000; Contract Rights of Third Parties Act 1999; Human Rights Act 1998; Data Protection Act 1998; Protection from Harassment Act 1997; Disability Discrimination Act 1995/ Equality Act 2010; Unfair Terms in Consumer Contract Regulations 1994; The Access to Health Records Act 1990; Unfair Contract Terms Act 1977; Proceeds of Crime Act 2002; Life Assurance Act 1774; Access to Medical Reports Act 1988; Current money laundering regulations.

5.7

Overseasclaims Candidates should be able to: discuss the issues applicable to overseas claims.

5.8

Non-contractualprovisions Candidates should be able to: discuss the operation and implications of the non-contractual provisions, including: commuted values; ex-gratia payments; provisional/on account.

5.9

Non-disclosure Candidates should be able to: discuss the identification of non-disclosure in relation to a claim; discuss the evidence required to investigate suspected non-disclosure. 6.5 6.6

5.10 Decliningclaims Candidates should be able to: discuss the recommended procedures for declining claims and the implications thereof.

Confidentialityandthehandlingofpersonal andsensitiveinformation ABICodesofPracticeandtheFSAICOB Rules Candidates should be able to: evaluate the role and impact of the ABI Codes of Practice and the FSA Insurance Conduct of Business Rules on life and disability claims.

6.
6.1

Legalandregulatoryissuesat claimstage
Non-disclosureandmisrepresentation Candidates should be able to: explain the classifications of nondisclosure and misrepresentation; assess the remedies for each.

6.7

Agency Candidates should be able to: describe the implications of use of agency and the role of the agents in life and disability claims.

6.8

Disputeresolution Candidates should be able to: describe the appeals process in relation to a claim, including the FSA complaint handling rules; explain the role and procedures of the Financial Ombudsman Service, and discuss how strict law is modified; describe the current legal environment that applies to declining claims discuss the use of contractual and other types of arbitration.

6.2

Determiningandrespondingtofraud Candidates should be able to: discuss the methods for determining and responding to fraud, including fraud conditions.

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7.
7.1

Actuarialconsiderationsand reassurance
Actuarialaspects Candidates should be able to: outline the actuarial aspects of life and disability claims, including: inception and termination rates; experience analysis; commuted values; claims reserves; actuarial control cycle.

10 Medicalaspectsofclaims assessment

10.1 Generalconsiderationsandproductspecific details Candidates should be able to: discuss general medical considerations in respect of claims assessment, including: musculo-skeletal problems; respiratory diseases; cancer; neurological disease and injuries; sensory disabilities vision and hearing; mental health problems; cardiovascular diseases; renal problems. 10.2 Subjectiveandvariableconditions Candidates should be able to: discuss the assessment of subjective and variable conditions. 10.3 Multipleimpairments Candidates should be able to: discuss the implications of multiple impairments. 10.4 Theroleofthegeneralpractitionerin certifyingfitnessandunfitnessforwork

7.2

Reassurerandreassurance Candidates should be able to: describe the role of the reassurer and the types of reassurance available.

8.
8.1

Disabilitytermsandconcepts
Definitionofterms Candidates should be able to: describe the differences between the following terms: disability; incapacity; functional capacity; impairment; handicap.

8.2

Modelsofdisability Candidates should be able to: describe the definition of different models of disability specifically own occupation suited any activities of daily living and work, for both disability and tpd.

11. Rehabilitation
11.1 Assessmentofskills Candidates should be able to: describe the assessment of social and communication skills; discuss the assessment for return to work; describe the assessment and guidance for non-work activities; describe the possible outcomes and alternatives to previous employment. 11.2 Rehabilitation Candidates should be able to: discuss the principles of rehabilitation and their relevance to claims assessment; discuss the process of rehabilitation including early intervention; explain how the outcomes of rehabilitation are evaluated; describe the personal and social aspects of rehabilitation. 11.3 Rehabilitationagenciesandspecialists Candidates should be able to: explain the role of other agencies, medical specialists and the Department for Work and Pensions.

9.
9.1

Disabilityassessment
Factorstoconsider Candidates should be able to: evaluate the impact of the following factors in relation to disability claims assessment; medical conditions, mental and physical; occupation; social factors; motivation; functional limitations; financial considerations.

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Reading list
The following list provides details of various publications which may assist with your studies. Periodicals and publications listed will be of value in ensuring candidates keep up to date with developments and in providing a wider coverage of syllabus topics. Any reference materials cited are authoritative, detailed works which should be used selectively as and when required. Note:Theexaminationwilltestthesyllabusalone. The reading list is provided for guidance only and is not in itself the subject of the examination. CII/Personal Finance Society members can borrow some of the additional study materials below from Knowledge Services. CII study texts can be consulted from within the library. For further information on the lending service, please go to www.knowledge.cii.co.uk. Life and disability claims. London: CII. Coursebook 556. Guide to life assurance underwriting. Keith Sankey. 3rd ed. London: Buckley Press, 1991. Distributed by Incisive Financial Media. Recent developments in life assurance law. Robert Surridge. London: CII Knowledge Services. Updated as necessary. Available online at www.knowledge.cii.co.uk/ category/resource-type/fact-files (CII/Personal Finance Society members only). The regulation of retail investment business. Tony Wiltshire. London: CII Knowledge Services. Updated as necessary. Available online at www.knowledge.cii.co.uk/ category/resource-type/fact-files (CII/Personal Finance Society members only).

Websites
CII Knowledge Services www.knowledge.cii.co.uk

Examination guides
Guides are produced for each sitting of written answer examinations. These include the exam questions, examiners comments on candidates performance and key points for inclusion in answers. You are strongly advised to study guides for the last two sittings. Please visit www.cii.co.uk to buy online or contact CII Customer Service for further information on 020 8989 8464. Older examination guides are available (for members only) at www.knowledge.cii.co.uk/category/resource-type/ exam-guides.

Exam technique/study skills

There are many modestly priced guides available in bookshops. You should choose one which suits your requirements. You will also find advice at www.knowledge.cii.co.uk/career-support (CII/Personal Finance Society members only).

Reference materials
Brackenridges Medical selection of life risks. 5th ed. Editors, R D C Brackenridge, Richard S Croxson, Ross Mackenzie. London: Palgrave Macmillan, 2006. Dictionary of insurance. C Bennett. 2nd ed. London: Pearson Education, 2004. Also available online at www.knowledge.cii.co.uk/resource/dictionary-insurance (CII/Personal Finance Society members only). Housemans Law of life assurance. 13th ed. Robert Surridge, Brian Murphy, Noleen John. Haywards Heath, West Sussex: Tottel, 2007. Life assurance contracts. Andrew McGee. Abingdon (Oxfordshire): Routledge-Cavendish, 2006. MacGillivray on insurance law: relating to all risks other than marine. 11th ed. London: Sweet & Maxwell, 2008.

Periodicals
Cover. London: Incisive Financial Publishing. Monthly. Health Insurance & Protection. London: Informa. Monthly. The Journal. London: CII. Six issues a year. Also available online (CII/Personal Finance Society members only) at www.knowledge.cii.co.uk/category/resource-type/journal. Post Magazine. London: Incisive Financial Publishing. Weekly. Further articles and technical bulletins are available via www.knowledge.cii.co.uk (CII and Personal Finance Society members only).

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