njaire data reporting a.overview of current reporting requirements b.quality reviews
TRANSCRIPT
NJAIRE Data Reporting
A. Overview of Current Reporting Requirements
B. Quality Reviews
Reporting Requirements
1. Call Forms
Form #3 – Accident Year 1998 – 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 RequirementsEarned Exposures by Threshold and
Accident Year (Individual insurers may vary)
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
4,500,000
5,000,000
2001 2002 2003 2004 2005 2006
Zero
Verbal
Reporting RequirementsExposure Thresholds for Accident Year 2006
(Individual insurers may vary)
6%
94%
Zero
Verbal
Reporting RequirementsExposure Thresholds for Accident Year 2006
Individual Company (Actual Data: Minimum 10,000 Exposures)
17%
83%Zero
Verbal
Reporting RequirementsExposure Thresholds for Accident Year 2006
Individual Company (Actual Data: Minimum 10,000 Exposures)
2%
98%
Zero
Verbal
Reporting Requirements
Call Forms – Required Data
BI Paid Claimants by Insured Threshold by Territory and Accident Year
Reporting Requirements
2002
• Exposures(Insurers may vary)
• BI Claimants(Insurers may vary)
8%92%
Zero
Verbal
6%94% ZeroVerbal
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 RequirementsA 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 RequirementsReportable Claims to Verbal BI by Accident Year
(Individual insurers may vary)
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
2001 2002 2003 2004 2005 2006
Reportable
Verbal
Reporting RequirementsReportable Claims to Verbal BI Accident Year 2002
(Individual Insurers may vary)
14%
86%
Reportable
Verbal
Reporting RequirementsLoss Severities by Year
(Individual insurers may vary)
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
2002 2003 2004 2005 2006
AVG NJAIREReportableClaim Loss Amt(By AccidentYear)
AVG NJ BIClaim Loss Amt(By CalendarYear)
Reporting Requirements
How are Reportable Claims Identified?
Reportable Claimants should be reported consistent with the facts involved in the settling of the claim.
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
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
2. Financial Impact on Companies
The magnitude of the financial transactions:
– $ 11 million every quarter via the monthly payments and quarterly disbursements (the provisional transactions)
– $ 550 million every year via the Annual Cash Settlement true-up
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!
3. Cost of Late, Erroneous 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
3. Cost of Late, Erroneous Data (cont.)
• Putting just 3 BI claims in the wrong threshold column can cost $ 60,000
• Putting just 3 BI claims vs. zero threshold insureds in the wrong territory can cost $ 50,000
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
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
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?
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?
4. Detecting Errors at the Call Form Level (cont.)
Common errors:
Exposures: car months, written, cumulative, threshold
BI Claims: threshold, territory
4. Detecting Errors at the Call Form Level (cont.)
COMPANY/GROUP NAME:Company B NJAIRE CALL FOR STATISTICS: FORM # 4COMPANY/GROUP NUMBER: #CONTACT PERSON: Please check one: ( X ) Voluntary (incl. A.R.) ( ) CAIPADDRESS: NOTE: Separate forms must be completed for voluntary (including assigned risks) and
CAIP business. Completed forms for voluntary business must be returned to theTELEPHONE NUMBER: address at right. CAIP forms must be sent to the applicable association.
ACCIDENT YEAR 2007TOTAL NUM OF BI LIAB. TOTAL NUM OF BI LIAB. REPORTABLE CLAIM INFORMATIONEARNED EXPOSURES PAID CLAIMANTS* PAID BI LIAB. TOTAL NUMBER
(CAR YEARS) AGAINST POLICIES IN WHICH REPORTABLE OF BI LIAB.TERR. BY TORT THRESHOLD: INSURED CHOSE THRESHOLD: LOSS AMOUNT REPORTABLECODE ZERO DOLLAR VERBAL ZERO DOLLAR VERBAL (DOLLARS ONLY) CLAIMANTS001 0 0002 0 0003 0 0004 1 0005 0 0006 1 1,071007 39 5008 0 77010 0 126 11 0011 1 116012 0 36
4. Detecting Errors at the Call Form Level (cont.)
• Common errors:
Reportables: claims included
ALAE, ULAE: reported separately and combined
4. Detecting Errors at the Call Form Level (cont.)
COMPANY/GROUP NAME: NJAIRE CALL FOR STATISTICS: FORM # 4COMPANY/GROUP NUMBER: CONTACT PERSON: Please check one: ( X ) Voluntary (incl. A.R.) ( ) CAIPADDRESS: NOTE: Separate forms must be completed for voluntary (including assigned risks) and
CAIP business. Completed forms for voluntary business must be returned to theTELEPHONE NUMBER: address at right. CAIP forms must be sent to the applicable association.
ACCIDENT YEAR 2006REPORTABLE CLAIM INFORMATION
PAID BI LIAB. TOTAL NUMBER PAID LOSS ADJUSTMENT EXPENSES
REPORTABLE OF BI LIAB. COMBINED**
TERR. LOSS AMOUNT REPORTABLE ALLOCATED UNALLOCATEDALLOC. & UNALLOC.
CODE VERBAL (DOLLARS ONLY) CLAIMANTS(DOLLARS ONLY)(DOLLARS ONLY)(DOLLARS ONLY)
001002003 15 100,000 15004005006 200,000 1007008 750 1,250 2,000010011012
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
Sample Spreadsheet (Exhibit C of handout)
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%
4. Detecting Errors at the Call Form Level (cont.)
Company A:Earned Exposures by Quarter
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
200603 200606 200609 200612 200703
Exposures
4. Detecting Errors at the Call Form Level (cont.)
Company B:Earned Exposures by Quarter
0
10,000
20,000
30,000
40,000
50,000
60,000
200603 200606 200609 200612
Exposures
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
4. Detecting Errors at the Call Form Level (cont.)
Company A:BI Claimants by Quarter
0
50
100
150
200
250
300
350
200703 200706 200709 200712 200803
BI Claimants
4. Detecting Errors at the Call Form Level (cont.)
Company B:
BI Claimants by Threshold and Quarter
01020304050
200403 200406 200409 200412
Zero
Verbal
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
4. Detecting Errors at the Call Form Level (cont.)
Company B:
Verbal and Reportable Claimants by Threshold and Quarter
01020304050
200603 200606 200609 200612
Reportable
Verbal
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?
4. Detecting Errors at the Call Form Level (cont.)
• More difficult errors to detect:
Territory errors
Completeness
4. Detecting Errors at the Call Form Level (cont.)
• Checks that could help:
Territory:
Additional proofreading, if posting numbers
Visual checks
4. Detecting Errors at the Call Form Level (cont.)
• Visual Checks by Territory – Possible Problem areas:
Large change in Exposures by Quarter
Exposures in Other Than Current Accident Year for the Current Quarter
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
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
4. Detecting Errors at the Call Form Level (cont.)
COMPANY/GROUP NAME:Company B NJAIRE CALL FOR STATISTICS: FORM # 4COMPANY/GROUP NUMBER: #CONTACT PERSON: Please check one: ( X ) Voluntary (incl. A.R.) ( ) CAIPADDRESS: NOTE: Separate forms must be completed for voluntary (including assigned risks) and
CAIP business. Completed forms for voluntary business must be returned to theTELEPHONE NUMBER: address at right. CAIP forms must be sent to the applicable association.
ACCIDENT YEAR 2007TOTAL NUM OF BI LIAB. TOTAL NUM OF BI LIAB. REPORTABLE CLAIM INFORMATIONEARNED EXPOSURES PAID CLAIMANTS* PAID BI LIAB. TOTAL NUMBER
(CAR YEARS) AGAINST POLICIES IN WHICH REPORTABLE OF BI LIAB.TERR. BY TORT THRESHOLD: INSURED CHOSE THRESHOLD: LOSS AMOUNT REPORTABLECODE ZERO DOLLAR VERBAL ZERO DOLLAR VERBAL (DOLLARS ONLY) CLAIMANTS001 0 0002 0 0003 0 0004 1 0 1005 0 0006 1 1,071007 4 500 100,000008 27 1010 0 126011 1 116012 0 36 8 1
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
REMEMBER,
• ISO is here to help make your reporting of NJAIRE data as easy and accurate as possible.
• If you have any questions, you can email [email protected] or contact:– Mike McAuley, [email protected] (201-469-2323)– Pat Lloyd, [email protected] (201-469-2326) – Aislinn Nichols, [email protected] (201-469-2290)
• You can also visit the NJAIRE website at www.njaire.org. It contains a Frequently Asked Questions section, copies of all reporting forms, seminar information including “Review” spreadsheet and PowerPoint presentation, Plan of Operation, Procedure Manual, etc.