Transcript NJAIRE Data Reporting

NJAIRE Data Reporting
A. Overview of Current
Reporting Requirements
B. Quality Reviews
Reporting Requirements
1. Call Forms

Form #3 – Accident Year 1997 –
2000, for policies issued or
renewed before 7/1/1999

Form #4 – Accident Year 1999 –
present, for policies issued or
renewed on or after 7/1/1999
Reporting Requirements
Sample Form:
Reporting Requirements
Call Forms – Required Data

Earned Exposures by Threshold
and Territory - Current Account
Quarter Only, in Car Years
Reporting Requirements
Earned Exposures by Threshold and
Accident Year (Individual insurers may vary)
5,000,000
4,500,000
4,000,000
3,500,000
3,000,000
Zero
Verbal
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
2001
2002
2003
2004
2005
Reporting Requirements
Exposure Thresholds for Accident Year 2005
(Individual insurers may vary)
7%
93%
Zero
Verbal
Reporting Requirements
Call Forms – Required Data

BI Paid Claimants by Insured
Threshold by Territory and
Accident Year
Reporting Requirements
2001
• Exposures
92%
8%
Zero
Verbal
(Insurers may vary)
• BI Claimants
(Insurers may vary)
7%
93%
Zero
Verbal
Reporting Requirements
Call Forms – Required Data (cont.)

Reportable Claim Loss Amounts
and Claimants by Territory and
Accident Year

Loss Adjustment Expenses for
Reportable Claims, Allocated and
Unallocated (separately or
combined)
Reporting Requirements
A Reportable Claim is . . .
• One that could not be made had the
claimant selected the Verbal Threshold
(Tort Limitation) , and
• One where the claimant had the Zero
Dollar Threshold (No Tort Limitation)
and the insured selected the Verbal
Threshold
…the basis for establishing NJAIRE
Reporting Requirements
How are Reportable Claims Identified?
Via the proper Reportable Claim Determination
Form:
• Policies issued or renewed before
7/1/1999*
• Policies issued or renewed on or after
7/1/1999*
* This is when the definition of the Verbal
Threshold changed.
Reporting Requirements
How are Reportable Claims Identified?
Reportable Claimants should be
reported consistent with the settling of
the claim.
•
•
“Moving Day”
“Grandma”
Reporting Requirements
2. Due Dates: to ISO (other than
CAIP) or AIPSO (CAIP only)
Account Quarter
Due Date
First Quarter
May 15
Second Quarter
August 15
Third Quarter
November 15
Fourth Quarter
February 15
Quality Reviews
1. Use of the Data
2. Financial Impact on Companies
3. Cost of Late, Erroneous Data
4. Detecting Errors at the Call Form
Level
Quality Reviews
1. Use of the Data - The Call Form data is
used to calculate:
– the “pot” of losses to be reimbursed
– each company’s assessment
– each company’s reimbursement,
plus its share of investment income
– each company’s share of the
NJAIRE administrative expenses
Quality Reviews
2. Financial Impact on Companies The magnitude of the financial
transactions:
– $ 13 million every quarter via the
monthly payments and quarterly
disbursements (the provisional
transactions)
– $ 650 million every year via the
Annual Cash Settlement true-up
Quality Reviews
3. Cost of Late, Erroneous Data –
The costs can be significant:
•
Late Data - $ 50 per work day
•
Resubmissions - $ 250 per quarter
•
Undetected Data Errors – can be
over $1,000,000!
Quality Reviews
3. Cost of Errors, Late Data (cont.) –
How can it be that much?
•
The ultimate Annual Cash
Settlement formula assesses and
reimburses based on BI claims: by
threshold, territory & accident year
•
BI claims in the wrong place have
a real financial impact
Quality Reviews
3. Cost of Errors, Late Data (cont.)
•
Putting just 3 BI claims in the
wrong threshold column can cost
$ 70,000
•
Putting just 3 BI claims vs. zero
threshold insureds in the wrong
territory can cost $ 50,000
Quality Reviews
4. Detecting Errors at the Call Form
Level – What is done today?
•
ISO performs high level data
checks upon receipt and in the
financial transaction process
•
Companies are contacted
regarding unusual data
Quality Reviews
4. Detecting Errors at the Call Form
Level (cont.)
•
AIPSO performs completeness
checks and detailed checks on
claim samples in the compliance
audit process
•
This covers about 10 companies
per year
Quality Reviews
4. Detecting Errors at the Call Form
Level (cont.)
•
The ISO and AIPSO checks alone
cannot catch everything
•
What can companies do? What
kind of reviews will be useful?
Quality Reviews
4. Detecting Errors at the Call Form
Level (cont.)
•
What types of errors are
commonly made?
•
How many can be caught by
expending a reasonable amount of
company resources?
Quality Reviews
4. Detecting Errors at the Call Form
Level (cont.)
•
Common errors:
 Exposures: car months, written,
cumulative, threshold
 BI Claims: threshold, territory
Quality Reviews
4. Detecting Errors at the Call Form
Level (cont.)
•
Common errors:
 Reportables: claims included
 ALAE, ULAE: reported separately
and combined
Quality Reviews
4. Detecting Errors at the Call Form
Level (cont.)
•
Review needs: “Spreadsheet”
 Current & Previous Quarter’s Data
 Knowledge about your company
 About 15 minutes per quarter
Quality Reviews
4. Detecting Errors at the Call Form
Level (cont.)
•
Exposures by threshold
 Data needed: Statewide totals
 General expectation: Volume +/-5%
 Zero Dollar Exposures as % of total
+/-2%
Quality Reviews
Company A:
Earned Exposures by Quarter
35,000
30,000
25,000
20,000
Exposures
15,000
10,000
5,000
0
200503
200506
200509
200512
200603
Quality Reviews
Company B:
Earned Exposures by Quarter
60,000
50,000
40,000
30,000
Exposures
20,000
10,000
0
200503
200506
200509
200512
Quality Reviews
4. Detecting Errors at the Call Form
Level (cont.)
•
BI Paid Claims by Threshold
 Data needed: Statewide, all years
 General expectation: Similar volume,
allowing for credibility, yrs included
 Claim Frequencies/Threshold similar,
averaging 0.5-1.5 per 100 car years
Quality Reviews
Company A:
BI Claimants by Quarter
350
300
250
200
BI Claimants
150
100
50
0
200603 200606 200609 200612 200703
Quality Reviews
Company B:
BI Claimants by Threshold and Quarter
50
40
30
20
10
0
Zero
Verbal
200503
200506
200509
200512
Quality Reviews
4. Detecting Errors at the Call Form
Level (cont.)
•
Reportable Losses & Claims
 Data needed: Statewide, all years
 General expectations:
 Pct. of Verbal: 4-28%, avg. 15%
 Avg. Loss: $3-15,000, avg. $7,500
Quality Reviews
Company B:
Verbal and Reportable Claimants by Threshold and
Quarter
50
40
30
20
10
0
Reportable
Verbal
200503
200506
200509
200512
Quality Reviews
4. Detecting Errors at the Call Form
Level (cont.)
•
Loss Adjustment Expenses
 Data needed: Statewide by year
 General expectation: 5-35% of
Reportable Losses, note: may lag
 Company Methodology: Formula?
Quality Reviews
4. Detecting Errors at the Call Form
Level (cont.)
•
More difficult errors to detect:
 Territory errors
 Completeness
Quality Reviews
4. Detecting Errors at the Call Form
Level (cont.)
•
Checks that could help:
 Territory:
 Additional proofreading, if posting
numbers
 Visual checks
Quality Reviews
4. Detecting Errors at the Call Form
Level (cont.)
•
Visual Checks by Territory –
Possible Problem areas:
 Large change in Exposures by Qtr.
 Exposures in Other Than Current Qtr.
Quality Reviews
4. Detecting Errors at the Call Form
Level (cont.)
•
Visual Checks by Territory –
Possible Problem areas:
 Zero Exposures > Verbal Exposures
 Claims vs. Zero > Claims vs. Verbal
Quality Reviews
4. Detecting Errors at the Call Form
Level (cont.)
•
Visual Checks by Territory – Possible
Problem areas:
 Reportable Claims > Claims vs. Verbal
 Reportable Losses w/o Reportable
Claims, and vice-versa
Quality Reviews
COMPAN Y/ GR OU P N AME:
Company B
COMPAN Y/ GR OU P N U MBER :
N JAI R E CALL FOR
#
CON T ACT PER SON :
Please check one: ( X
AD D R ESS:
N OT E: Separate form
CAI P business. Comp
T ELEPH ON E N U MBER :
address at right. CAI P
ACCI D EN T YEAR 2006
T ER R .
COD E
T OT AL N U M OF BI LI AB.
T OT AL N U M OF BI LI AB.
EAR N ED EXPOSU R ES
PAI D CLAI MAN T S*
(CAR YEAR S)
AGAI N ST POLI CI ES I N W H I CH
BY T OR T T H R ESH OLD :
Z ER O D OLLAR VER BAL
I N SU R ED CH OSE T H R ESH OLD :
Z ER O D OLLAR
VER BAL
001
0
0
002
0
0
003
0
0
004
1
0
005
0
0
006
1
1, 071
007
39
5
008
0
77
010
0
126
011
1
116
012
0
36
R EPOR T ABLE
PAI D BI LI AB.
T OT AL N U MBER
R EPOR T ABLE
OF BI LI AB.
LOSS AMOU N T R EPOR T ABLE
(D OLLAR S ON LY) CLAI MAN T S
1
150, 000
11
0
Quality Reviews
4. Detecting Errors at the Call Form
Level (cont.)
•
Checks that could help:
 Completeness
 Other Existing Internal Data
 Special Reports
Summary
•
Poor data quality can have a large,
hidden impact on your company’s
bottom line
•
With a reasonable effort you can
help ensure that your company is
properly assessed and reimbursed