Industry Regulatory Requirements
A: These levels of government share responsibility for monitoring and regulating the insurance industry.
Q: What are the federal and provincial/territorial governments?
The federal government deals with criminal law driving offences and the provincial/territorial government deals with auto legislation. (See page 2-3 of the textbook).
A: These are the two elements unique to insurance operations.
Q: What are underwriting and claims?
(See page 2-5 in the textbook).
A: This agreement waives the POL requirement on first-party auto claims if repairs have been carried out, but if there is subrogation potential, claims must be supported with documentation.
Q: What is the Agreement Respecting Standardization of Claim Forms and Practices, and Guidelines for the Settlement of Claims?
(See page 2-8 in the textbook).
A: Some insurers have formed these units where fraud is suspected or where other factors have been identified that require special investigation.
Q: What are Special Investigations Units?
(See page 2-12 in the textbook).
A: This legislation protects consumers from unfair business practices.
Q: What is Consumer Protection Legislation?
Adjusters require a wide range of both general and specialized knowledge. (See page 2-13 in the textbook).
A: These are provided in provincial and territorial legislation, by professional insurance associations, and by rules and policies that are unique to each insurance company.
Q: What are codes of conduct?
(See page 2-15 in the textbook).
A: This not-for-profit government-approved program protects policyholders if an insurer becomes insolvent.
Q: What is the Property and Casualty Insurance Compensation Corporation (PACICC)?
(See page 2-3 in the textbook).
A: This requires enough future claims to continue to produce a statistically accurate outcome.
Q: What is an average cost reserve?
AKA: Volume reserving, where large numbers of claims in a particular line of business have produced reliable statistics. Typically opens automatically on a qualified loss. (See page 2-7 in the textbook).
A: This organization developed an arbitration mechanism for settling disputes between insurers efficiently and cost effectively.
Q: What is the Canadian Insurance Claims Managers Association (CICMA)?
(See page 2-9 in the textbook).
A: This national not-for-profit organization was established in 2021 to combat fraud through advanced analytics, intelligence techniques, and coordinated loss investigations.
Q: What is the Équité Association?
IBC’s Investigative Services Division (ISD) and the Canadian National Insurance Crime Services (CANATICS) were integrated to create the Équité Association. (See page 2-12 in the textbook).
A: Adjusters must have up-to-date computer skills and be able to select the most suitable technologies (provided by their organization) for the work involved in adjusting a claim.
Q: What is digital and technological fluency?
Adjusters must understand and use the digital and technological applications and solutions available to them. (See page 2-14 in the textbook).
A: This plays an important role in maintaining professionalism, improving knowledge of best practices within the insurance industry, and providing resources for promoting, establishing, and maintaining standards of conduct within the field.
Q: What is ongoing insurance education?
(See page 2-15 in the textbook).
A: Violations of these laws can result in fines or reputational harm for insurers.
Q: What are privacy rights / laws?
(See page 2-4 in the textbook).
A: These individuals oversee the insurer's financial health and notify management if regulatory financial standards are not met.
Q: Who are reserving actuaries?
Reserving actuaries calculate the funds needed for bulk claims reserves, which include provisions for claims not yet reported (IBNR) and for potential increases in claim costs exceeding the reserve. (See page 2-6 in the textbook).
A: This partnership helps control claims costs, since insurers work with them to negotiate reduced rates on services or products.
Q: What are supplier partnerships?
Some insurance companies partner with independent businesses to provide services or products to policyholders. These partnerships help ensure quality work and keep costs down by negotiating better rates.
(See page 2-9 in the textbook).
True or false:
Most policies include coverage for property that has been illegally acquired, imported, stored, or transported.
FALSE.
Most policies specifically exclude property that has been illegally acquired, imported, stored, or transported. (See page 2-11 in the textbook).
Name four (4) areas of legal knowledge adjusters may need to familiarize themselves with?
What are:
- Civil Law (disputes between private individuals or corporations).
- Contractual Law (binding agreements between two or more persons for a particular purpose).
- Tort Law (where one person’s actions cause injury or harm to another, allowing the injured party the ability to sue for damages).
- Regulatory Environment (rules and regulations applicable to insurance).
- Consumer Protection Legislation (protects consumers from unfair business practices).
- Privacy Legislation
- Relevant Government Statutes
- Case Law (precedent)
(See page 2-13 in the textbook).
True or false:
All adjusters, whether company adjusters or independent adjusters, are required to be licensed in the province in which they work.
FALSE.
Only independent adjusters are required to be licensed in the province in which they work. employees of insurance companies do not need to be licensed or certified except in Quebec, New Brunswick, Newfoundland and Labrador, and Prince Edward Island. (See page 2-17 in the textbook).
A: This body evaluates the financial soundness and sets thee financial reporting requirements for Canadian and foreign property and casualty insurance companies that operate under federal charters.
Q: What is the Office of the Superintendent of Financial Institutions (OSFI)?
(See page 2-3 in the textbook).
A: These are the funds set aside for impending loss payments.
Q: What are reserves?
Reserves give management and regulators information on a company’s financial status to predict business trends, costs, and expenses. Actuaries rely on reserves to predict future claims costs and to provide accurate average reserves.
(See page 2-6 in the textbook).
A: This agreement is used to resolve claims when property policies overlap in coverage.
Q: What is the Agreement of Guiding Principles (Property Insurance)?
(See page 2-8 in the textbook).
A: This type of event occurs by chance and is an accidental occurrence.
Q: What is a fortuitous event?
Insurance policies cover fortuitous events, not deliberate or intentional acts. (See page 2-10 in the textbook).
A: Adjusters must balance the needs of the insurance company, the insured, the claims department, and the broker.
Q: What is company protocol knowledge?
The adjuster is a conduit for the information with which an insurance company determines how much it owes to fulfill contractual obligations. (See page 2-13 in the textbook).
A: This organization represents the collective interests of independent adjusters to government, industry, and the public on a provincial, regional, and national level
Q: What is the Canadian Independent Adjusters’ Association ("CIAA")?
The CIAA provides opportunities for training, education, and professional development, and encourages greater public understanding of the workings of the adjustment business. A high standard of professionalism is defined through the CIAA code of ethics and fair practice policies, which promote a uniform standard of conduct in the adjustment of claims.
(See page 2-16 in the textbook).
True or False:
Each province / territory has its own insurance statute.
A: TRUE.
The statute relates to approved policy forms; reports insurers must file; licensing of agents, brokers, IAs; and financial security requirements for insurers.
(See page 2-4 in the textbook).
A: These persons are responsible to analyze data and perform calculations to determine the price of the various classes of insurance; they are responsible for the basic ratemaking.
Q: Who are pricing actuaries?
(See page 2-6 in the textbook).
A: This agreement is binding on insurers only; if a signatory insurer sues another signatory insurer, the lawsuit must be dropped, and the initiating insurer covers legal costs.
Q: What is the Canadian Inter-Company Arbitration Agreement?
(See page 2-9 in the textbook).
Name five (5) examples of how fraud may occur.
A:
- The policy is issued for property that does not exist or that is owned by someone other than the insured.
- The policyholder intentionally misrepresents how insured property is used to obtain a lower premium.
- The claimant stages an accident to submit a fraudulent injury claim.
- The policyholder stages a burglary.
- The policyholder reports a vehicle theft when no theft has occurred.
- The policyholder significantly inflates a claim or commits arson in order to present a property claim.
- The policy is arranged by a ghost broker, who intentionally misrepresents him- or herself as the insured to obtain insurance.
A: This is the ability to communicate effectively, manage expectations (of the insurance company, of the insured or claimant, and of the broker), prioritize tasks, and solve problems.
Q: What are skills and characteristics required of an adjuster?
(See page 2-14 in the textbook).
A: This is measured against principles such as honesty, integrity, and justice.
Q: What is professional conduct?
(See page 2-15 in the textbook).