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Claims Management Audit Report - icare HBCF
Audit date: 27 - 28 September 2022
Introduction
The State Insurance Regulatory Authority (SIRA) has specific functions to ensure icare HBCF’s compliance with the home building compensation legislation. SIRA monitors icare HBCF’s claims management performance against the Home Building Compensation insurance guidelines and icare HBCF’s Claims manual.
Audit procedure
In accordance with section 105W of the Home Building Act 1989 (the Act), SIRA conducted a claims management performance audit of icare HBCF from 27 September 2022 to 28 September 2022.
The audit reviewed a sample of randomly selected claims that were made from 1 September 2021, to assess icare HBCF’s compliance and performance in relation to claims management activities during the past 12 months.
The audit measured activity in relation to the obligations and timeframes placed upon icare HBCF by the home building compensation legislation and the Home Building Compensation (claims handling) insurance guidelines and icare HBCF’s Claims Manual v 4.3. Observations were also recorded about activities that were outside of the audit criteria but essential to the management of the claims.
During the audit, icare HBCF were provided opportunity to review SIRA’s findings and provide comment and further evidence for SIRA’s consideration.
Audit outcome
The claims files reviewed demonstrated that icare HBCF were managing claims in accordance with the current legislative and guideline requirements and undertaking management practices to SIRA’s expectations.
An overall score of 99 per cent was achieved with 27 of the 30 files reviewed having full conformance.
Non-conformance
Non-conformance identified in three files related each time to not meeting the timeframe required to confirm to claimants that all prescribed information had been received. However, the periods measured outside of the timeframe were not considered to have caused significant delay to the progression of the claims.
Observations
Strengths:
- In the early stages, claims were progressed in a timely manner and claimants provided with the necessary documentation and information relevant to their claim
- Claims managers were maintaining good communication with claimants throughout the claims, ensuring the files were regularly reviewed and updates provided at least every month
- Proactive activity was demonstrated by claims managers to try and reduce delays occurring during the Building Consultant reporting phase
- The internal dispute process appeared to provide clear and detailed information to claimants about the process and outcome of their complaint.
Opportunities for improvement:
- Delays in receiving Building Consultant reports resulted in six claims requiring an extension of time to determine liability past 90 days. icare HBCF should consider if there are additional activities or measures that could be implemented when Building Consultants do not meet reporting expectations
- The tender stage of the claim appeared to be where periods of inactivity occurred, taking approximately three months to complete. icare HBCF should consider if there are ways that the process could be streamlined to reduce the time periods involved with this stage.
Audit overview
| Audit site location | icare HBCF, 321 Kent St, Sydney NSW 2000 |
| Audit dates | 27 - 28 September 2022 |
| Audit period | Claims made from 1 September 2021 |
| Number of claims audited | 30 |
Results overview
1. Loss notification
1.1 On receiving a loss notification, the insurer acknowledged receipt and provided details of next steps within two business days.
| Audit score: | 100% |
| Total criteria conformance: 22 | Maximum achievable criteria conformance: 22 |
| Key findings: | There were 22 eligible claims under this audit criterion within the audit sample. Evidence was provided on each of these claims that loss notifications had been responded to within relevant timescales. |
2. Prescribed information
2.1 The insurer made requests for prescribed information within relevant timescales.
| Audit score: | 100% |
| Total criteria conformance: 13 | Maximum achievable criteria conformance: 13 |
| Key findings: | There were 13 eligible claims under this audit criterion within the audit sample. Evidence was provided on each of these claims that requests for further prescribed information had been made within relevant timescales. |
3. Claim receipt
3.1 The insurer has received all prescribed claims information before commencing assessment of the claim.
| Audit score: | 100% |
| Total criteria conformance: 30 | Maximum achievable criteria conformance: 30 |
| Key findings: | All claims were eligible claims under this audit criterion within the audit sample. Evidence was provided on each of these claims that all prescribed information had been received. |
3.2 Acknowledge receipt of a claim in writing once all prescribed information is received within relevant timeframes.
| Audit score: | 90% |
| Total criteria conformance: 26 | Maximum achievable criteria conformance: 29 |
| Key findings: | There
were 29 eligible claims under this audit criterion within the audit sample.
Evidence was provided that for 26 claims, acknowledgement of the receipt of
the claim was provided within five business days. Non-conformance was found on the three claims where timeframes were exceeded by four, three and two business days respectively |
4. Trigger event
4.1 Claimant has been informed of trigger event within relevant timescale.
| Audit score: | 100% |
| Total criteria conformance: 25 | Maximum achievable criteria conformance: 25 |
| Key findings: | There were 25 eligible claims under this audit criterion within the audit sample. Evidence was provided on each of these claims that claimants had been informed of a trigger event within 30 days of claim receipt. |
4.2 A change to the trigger event has been communicated to claimant within relevant timescales.
| Audit score: | 100% |
| Total criteria conformance: 3 | Maximum achievable criteria conformance: 3 |
| Key findings: | There were three eligible claims under this audit criterion within the audit sample. Evidence was provided on each of these claims that claimants had been informed of a change to the trigger event within five days. |
5. Appointment of building consultant
5.1 Building consultant has been appointed and claimant notified within relevant timescales.
| Audit score: | 100% |
| Total criteria conformance: 24 | Maximum achievable criteria conformance: 24 |
| Key findings: | There were 24 eligible claims under this audit criterion within the audit sample. Evidence provided on each of these claims that a building consultant had been appointed to the claims and the claimants had been informed of the details within 10 days of the trigger event. |
6. Claims decision
6.1 Liability has been determined within relevant timescales.
| Audit score: | 100% |
| Total criteria conformance: 21 | Maximum achievable criteria conformance: 21 |
| Key findings: | There were 21 eligible claims under this audit criterion within the audit sample. Evidence was provided for 14 claims that liability determination was made within 90 days of claim receipt. Evidence was provided for the remaining seven claims that liability was determined within timeframes agreed with the claimant. In these instances, clear reasons were provided to the claimant as to why liability could not be made and what was required before a decision could be made. |
6.2 The claim decision been provided in writing to the claimant.
| Audit score: | 100% |
| Total criteria conformance: 21 | Maximum achievable criteria conformance: 21 |
| Key findings: | There were 21 eligible claims under this audit criterion within the audit sample. Evidence provided on each of these claims that a claim decision has been provided in writing. |
6.3 If partially accepted, liability reduced or denied, the reasons for the decision been made clearly and contain the relevant options available to make a complaint or dispute a decision.
| Audit score: | 100% |
| Total criteria conformance: 12 | Maximum achievable criteria conformance: 12 |
| Key findings: | There were 12 eligible claims under this audit criterion within the audit sample. Evidence was provided on each of these claims that decisions had been clearly explained. |
6.4 The claim has been finalised after all investigations, liability decision and payments have been made.
| Audit score: | 100% |
| Total criteria conformance: 9 | Maximum achievable criteria conformance: 9 |
| Key findings: | There were nine eligible claims under this audit criterion within the audit sample. Evidence was provided on each of these claims that finalisation was made correctly. |
7. File review and communication
7.1 File is reviewed within relevant timescale.
| Audit score: | 100% |
| Total criteria conformance: 17 | Maximum achievable criteria conformance: 17 |
| Key findings: | There were 17 eligible claims under this audit criterion within the audit sample. Evidence was provided on each of these claims that the files had been reviewed at least every month. |
7.2 Claimant is kept informed of progress in writing within relevant timescales.
| Audit score: | 100% |
| Total criteria conformance: 20 | Maximum achievable criteria conformance: 20 |
| Key findings: | There were 20 eligible claims under this audit criterion within the audit sample. Evidence was provided on each of these claims that the claimants had been kept informed of progress at least every month. |
7.3 Telephone calls are responded to within relevant timescales.
| Audit score: | 100% |
| Total criteria conformance: 17 | Maximum achievable criteria conformance: 17 |
| Key findings: | There were 17 eligible claims under this audit criterion within the audit sample. Evidence was provided on each of these claims that calls were responded to within 24 hours |
8. Complaints and disputes
8.1 Compliant or Dispute is considered through Internal Dispute Resolution (IDR ) within relevant timescales.
| Audit score: | 100% |
| Total criteria conformance: 1 | Maximum achievable criteria conformance: 1 |
| Key findings: | There was one eligible claim under this audit criterion within the audit sample. There was evidence provided that the IDR process was commenced within 15 business days of the dispute being lodged. |
8.2 Escalated complaint or dispute is considered in icare HBCF claims committee within relevant timescales.
| Audit score: | 100% |
| Total criteria conformance: 1 | Maximum achievable criteria conformance: 1 |
| Key findings: | There was one eligible claim under this audit criterion within the audit sample. Evidence was provided that the claims committee considered the complaint within 10 business days. |
8.3 Internal Review is completed within relevant timescales.
| Audit score: | 100% |
| Total criteria conformance: 1 | Maximum achievable criteria conformance: 1 |
| Key findings: | There was one eligible claim under this audit criterion within the audit sample. Evidence was provided on each of these claims that an internal review was completed within 30 business days. |
8.4 Claimant informed of right to appeal to NCAT or court within relevant timescales.
| Audit score: | 100% |
| Total criteria conformance: 1 | Maximum achievable criteria conformance: 1 |
| Key findings: | There was one eligible claim under this audit criterion within the audit sample. Evidence was provided that the claimant had been informed about their right to appeal within 45 days of receiving the outcome of a decision. |
9. Overview
| Audit score: | 99% |
| Total criteria conformance: 264 | Maximum achievable criteria conformance: 267 |
This final report has been completed on the consideration of all evidence presented and agreement with icare HBCF on the findings during the audit.
The SIRA audit team would like to thank the icare HBCF Claims team for their cooperation and assistance throughout the audit.