The U.S. is still a significant market for non U.S. reinsurance and insurance companies. Hence, reinsurance claims developments in the United States are of special interest to U.K. and European reinsurers. The practice of reinsurance claims treatment is undergoing fast change.
The reinsurance sector is facing many testing or difficult times now. Many new requirements are put forward which is the reason for the difficult times for the reinsurance sector. Many questions are being raised on the matter of arbitration and mediation. The question is regarding the fact that whether arbitration and mediation is able to solve the problems in this sector. These are the organizations which deal with reinsurance claims now. Arbitration and mediation are the alternative methods for dispute resolution other than court.
Most reinsurance claims or disputes are determined short of litigation or arbitration and most disputes are arbitrated in private, and so the number of public information is limited. The failure of a ceding insurer to give on time notice to its reinsurer of the filing of a reinsurance claims, or of an incidence that may effect in the filing of a reinsurance claims, may offer the re insurer with a defense to indemnification under the reinsurance contract.
When reinsurance claims are made under a reinsurance contract, a chain of procedures needs to be set in action. These procedures include:
- Claim is flagged by the organization.
- Claim is linked with suitable certificates, contracts and reinsurers.
- Reinsurer billing is set with supporting credentials.
- Bill is sent to reinsurer and recorded on sub ledger as reinsurance recoverable.
- Amount is recorded and received by company.
- Payment made is cleared against reinsurance recoverable.
Many factors make it difficult to utilize technology for reinsurance claims to be issued
Factors affecting claims
Several factors make it especially difficult to use technology for running reinsurance claims. The factors are
- Multiple platforms
- The need to aggregate and accommodate third parties
- There are lots of departments to deal; with reinsurance claims
As the reinsurance claims at first arise from the assured, the reinsurers usually have no chance to hinder with the reinsured’s claims handling process. Claims requirements are used to conquer the severe consequences of such a state of affairs and third party reinsurers may be at liberty to be concerned in the reinsured’s claims handling. Reinsurance claims provisions can be seen in US reinsurance policies as well, and claims control provisions entitle reinsurers to manage claims against reinsured. There is also a corresponding duty on the reinsured to make prompt and full disclosure of the information the reinsurer wants in order to make a decision whether to associate. The cure for breach of claims provisions depends strictly on the nature of provisions in the contract.
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