What are the costs of a poorly performing claims operations?

By Brian S. Bullock, LSSBB, FMLI, ALHC, AIRC, ACS  ( www.briansbullock.com)

👉North Carolina Fines Gerber Life Insurance Co. $1.1 million for Claims Violations 

Gerber Life Insurance Company was forced to pay over $1,000,000 in fines after they were investigated by the North Carolina Department of Insurance and found to have numerous violations.

Claims departments are often the most overlooked, yet extremely important, departments in an insurance company.  The claim time is when the insurance company makes good on their promises outlined in a policy.    

Unfortunately, there are millions of claims handled by life insurance companies every year in a careful and appropriate manner and no one hears about it.  It is cases like this that are highlighted and can erode public trust in the industry as a whole.
It is more important than ever that insurance companies have leadership that is experienced, competent and caring in place. 

"NCDOI said the examination revealed numerous claims processing violations, such as unnecessary information being requested from claimants that delayed claim payments. In one example, NCDOI said biological parents were initially denied benefits for natural born children and had to send in clothing receipts, tax returns and other unnecessary documentation to prove a “parent/child” relationship. Other claimants had to sue to recover amounts due under their insurance policies, which reduced the benefits received due to attorneys’ fees incurred. Additionally, some claims were not promptly settled under one portion of the policy where liability was reasonably clear in order to influence settlement under other portions of the policy, NCDOI said."

 A poorly operated claims department can cost a life insurance company dearly.  Regulatory fines, attorney fees, lawsuits, damage to brand are all results that can be avoided, with sound leadership, strategies and procedures.