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All insurance companies have written claim processes | Property Insurance Protection Law Blog



I was recently told that USAA has a claims manager who said that USAA has no written claims procedures. I was skeptical of that statement until I read USAA’s claims manager’s deposition.

USAA has written complaint procedures and complaint processes. I am attaching to this post only a subset dealing with its direct repair program, which was downloaded into the public domain by a USAA adjuster.1 Those working in its Contractor Connection program know all about these written claims procedures – so it’s not a top secret deal. In fact, when you have thousands of active and former USAA claims adjusters with knowledge of written claims procedures, it̵

7;s hard to imagine how claims procedures can be like a secret recipe for Coke or Kentucky Fried Chicken. USAA should share these with their members if they are truly honest about how their claims should be handled.

USAA’s written claims procedures are frequently reviewed during market conduct studies by the various insurance departments. So it seems like a blatant lie when a USAA claims manager says they don’t exist. For example, a Massachusetts Market Conduct Study by USAA2 found:

Observations: RNA noted that each of the claims tested was handled in accordance with company policies and procedures except as noted above. Based on testing, it appears that the company’s complaint handling processes generally operate in accordance with its policies, procedures and statutory requirements. Finally, after evaluating 11 injury-related complaints, the related claims appeared to be handled properly.

Necessary Actions: The Company shall adopt new policies and control procedures to meet the requirements of MGL c. 139 § 3B and MGL c. 175, § 24D, 24E and 24F and provide training or guidance to claims adjusters on the proper and timely implementation of these policies and procedures . The new procedures shall be tested by internal audit or compliance to ensure they are effectively implemented with the results of the independent testing completed and reported to the division by June 30, 2014, or another agreed upon date.

Subsequent measures: The company has adopted new procedures for compliance with MGL c.139, § 3B. The procedures have been communicated to claims staff and state that upon receipt of an initial notice of loss for property damage expected to exceed $1,000, staff shall notify local municipal officials of the claim using the company’s designed letter template.

In order to ensure that claims processes are being followed, USAA has actually conducted audits as noted in the Market Conduct Study:

The company has quality assurance programs in its insurance and claims departments. The company’s underwriting audit team conducts monthly quality assurance testing, which includes five files per underwriter to ensure compliance with the company’s underwriting standards and regulatory requirements. Additionally, supervisors and managers monitor telephone calls from customer service representatives for training and compliance with company policies and procedures. The company has also established a quality assurance program for claims handling through monthly reviews of closed claims reports by claims handlers. The claims reviews include a sample of claims for each adjuster to assess compliance with company policies and procedures. The results of the claims audit are documented and reported for each adjuster for use in claims management as part of employee training and performance evaluation.

The USAA Market Conduct Exam was also on page 53:

The company’s claims handling process is centralized at the home office with teams assigned to different claims handling processes and/or geographic regions. The claims staff at the home office is supplemented by employee field adjusters. The company uses field staff and independent field appraisers to complete auto appraisals for property damage claims. Non-car claims in Massachusetts are processed by two primary teams, which are specifically trained to handle Massachusetts claims. Claims management employees are organized into functional teams with an oversight structure in place to ensure compliance with claims regulatory authorities and company procedures.

Written policies and procedures guide claims handling processes…

USAA must have a rogue claims manager who says USAA has no written claims procedures. USAA had a code of conduct that its chief wrote about:3

Service, loyalty, honesty and integrity are the foundation of USAA’s business practices. These core values ​​also represent a shared bond with our loyal members, whose sacrifice inspires us to deliver on our mission.

The Code of Business Ethics and Conduct is your best resource for understanding how to treat each other and care for our members. Please take the time to familiarize yourself with it.

Each of us is responsible for upholding USAA’s principles as we serve our members with excellence into our second century.

My father and sister proudly served in the US Coast Guard. They are proud to be members of USAA, as are many other active and retired service members. The military has all kinds of written processes and procedures, and so does USAA. I have no idea why a USAA claims manager wouldn’t recognize them unless he and those under his leadership are not living up to the standards stated.

Today’s thought

If you tell the truth, you don’t have to remember anything.
– Mark Twain
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1 USAA Property Direct Repair Program Guidelines and Compliance. 3/1/2017.
2 Report on the comprehensive market research by United Services Automobile Association and USAA Casualty Insurance Company. Massachusetts Division of Insurance. January 8, 2014.
3 USAA’s Code of Business Ethics and Conduct.


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