Transcript here - NJAIRE

Welcome!
Residual Market Audit Services
NJ AIRE
Compliance Audit Program
Deb Silva
AIPSO
Automobile
Insurance
Plan Service
Office
Objective of NJAIRE Audits
To ensure that companies are
submitting complete and accurate data
to the NJAIRE central processor - ISO.
Compliance – Data reported meets
specifications in the Plan of Operations.
Operational – Company’s internal controls are
effective in identifying and processing NJAIRE
business.
Audit Process
Three Stages
1.
Planning
2.
Fieldwork
3.
Reporting
Audit Process
Stage 1: Planning
a. Company Selection
b. Communication with ISO
1. Call Forms
2. Statement of Compliance
3. Concerns with Companies
Audit Process
Stage 1: Planning
c. Engagement Letter – Includes
request for data
1. All private passenger BI claimants
2. All reportable claimants
3. All other claims
d. Company contact information
received
Audit Process
Stage 1: Planning
e. Receipt of company detail
f. Verification of detail to call forms
g. Obtain internal procedures for
reviewing data submissions
h. Confirmation Letter
Audit Process
Stage 2: Fieldwork
a. Opening meeting
b. File review
• Determination Forms
Reportable Claimant
Determination Form
 The purpose of the form is to assist the claims
person when determining whether a settled BI
claimant is Reportable or Non-Reportable.
 The determination form can be found on the
NJAIRE.org website under the Documentation and
Forms title.
 Check out the training module on NJAIRE.org
under the Claims Training title.
Determination Form
IMPORTANT CHANGE
Effective 1/1/2012
Claim Determination Form is
Mandatory!
Determination Form
8. Is the claimant a person who is
required to maintain PIP Insurance (i.e.,
does he own a private passenger auto
registered in New Jersey), or is he
eligible to collect PIP benefits as a result
of the accident?
Audit Process
Stage 2: Fieldwork
c. File review
• Work-papers
Audit Process
Stage 2: Fieldwork
d. Fieldwork summary
e. Closing meeting
Audit Process
Stage 3: Reporting
1. Draft Report
2. Company’s Response
3. Final Report
Pre-Audits
 Instituted in 2011 for companies new to the NJ
automobile market
 ISO determines when a company is ready for a
pre-audit
 Pre-audit is similar to a regular audit but on a
smaller scale
 Determines if a company is reporting correctly
prior to a full audit
Crunching the Numbers
2003 – 2014 Audits
125 Audits Completed
Reportable Claims
• Total claimants reviewed – 5,204
• Number of claimants over reported – 642
or 12%
• Dollar amount over reported –
$10,524,089
2003 - 2014 Audits
Reasons for Over Reporting:
• Claimant or Insured Incorrect Threshold
• Unverified Claimant Threshold
 These two reasons account for 52% of
reporting errors
Additional Reasons for Over
Reporting
• Economic Loss Payment Included
• Claimant had pierced the threshold
• Claimant was not a NJ Resident
• Claim Occurred outside of NJ
• Expense Payments Included in Reporting
Reporting Errors
• Incorrect Territory Codes (Accident Year 2007
and prior)
• Settlement Reported in an Incorrect Reporting
Year
• Over Reporting of the Dollar Amount
2003 – 2014 Audits
125 Audits Completed
All Bodily Injury Claims:
• Total claimants reviewed – 9,660
• Number of claimants under reported –
255 or 3%
• Dollar amount under reported –
$2,404,748
• Number of claimants over reported as BI
claims – 245 or 3 %
Reasons for Under Reporting
• Claimant had a Zero Dollar Threshold
• Insured had a Verbal Threshold
• Unverified Claimant Threshold
Reporting Errors
• Non Bodily Injury Paid Claims
• Bodily Injury Claims with No Payment
• Incorrect Territory Codes (Accident Year 2007
and prior)
• Settlement Reported in an Incorrect Reporting
Year
NJAIRE Claim Handling TIPS
• Claims handlers should be familiar with the
NJAIRE procedure manual – NJAIRE.org
• Know the requirements for verification of the
claimant’s threshold (Pgs 31 – 32 of the procedure
manual)
• Use the required NJAIRE Claim Determination
Form
• Check the final determination after claim is settled
and before it is submitted to IT
QUESTIONS?
What?
Huh?
What does it all
mean?
Thank you!
Residual Market Audit Services
NJAIRE
Compliance Audit Program
Deb Silva