ECF Comments and query resolution

ECF Best Practice Group (July 08)LMA’s ECFUG & LMBC’s BEFIT

Aim and Content

• Illustrate some of the issues associated with ECF response types

• Identify potential ‘best practice’ going forward• Content of this presentation

– Highlight the problems– Overview of the current process– Proposed best practice– Identify at least one residual issue– Summarise best practice

Outline of the problem• There is a divorce between the system response (ie the

buttons) and the often more comprehensive and explicit written response, as contained within the Public Comments– Further confusion arises due to differences between IUA

and Lloyd’s versions of CLASS– A perception (within some MA’s) that Public Comments are

being ignored– Confusion as to how queries should be actioned/ resolved– Growing volumes of queried items, which has the potential

to become a serious problem for the market as a whole

Outline of the problem• The most appropriate system response (Seen/Action; Agree

Pay or Query/Return) depends upon a number of factors:– The merits of the claim, the accuracy of the supporting TR

plus the nature of the Public Comments made– Nature of the CLASS TR (whether an advice or a

settlement)– Whether claim is ‘Coupled’ or ‘De-coupled’– Whether it is the lead, or a subsequent agreement party

that queries the claim.

The process (Coupled)

Broker loads TR

Leader agrees TR

XCS agrees TR

XCS produces SCM

Essentially the same CLASS data flows through the whole process

The process (Coupled)

Broker loads TR

Leader queries TR

Leader Queries the TR

The process (Coupled)

Broker loads TR

Broker amends TR or loads additional documents

Leader either agrees TR or re-states query

Process then goes onto complete as applicable.

Leader Queries the TR and Broker amends TR

The process (Coupled)

Broker loads TR

Leader queries TR

Leader Queries the TR

The process (Coupled)

Broker loads TR

Leader either agrees TR or re-states query

Process then goes onto complete as applicable.

Leader Queries the TR and Broker deletes original TR

Broker may delete original TR and replace with a new one

If the broker deletes the original TR (as a consequence of the query resolution) it is vital that they copy any agreement party comments within the Public Comments, to the IMR. This is due to them also being deleted, along with the TR! per the Systems Process & Procedure manual.

The process (Coupled)

Broker loads TR

Leader agrees TR

XCS queries the TR

XCS Queries the TR

The process (Coupled)

XCS Queries the TR and broker amends the TR

Broker loads TR

Broker amends the original TR; deletes it and replaces it with a new one, and/or loads additional documents

XCS either agrees, or re-queries the TR

Process then either repeats or, goes onto complete as applicable.

Leader needs to re-agree the TR. It would be useful for the broker to detail, in the narrative, the changes made.

The process (De-coupled)

• All claims (where the 1st advice post-dates May 07) are now de-coupled

• The process is exactly the same as for coupled claims, however (as the ECF CLASS data does not automatically flow into the SCM) there is one further scenario, where both the leader and XCS can query a claim, yet an SCM can still be produced

The process (De-coupled)

Broker loads TR

Leader queries TR

XCS also queries the TR

Yet XCS can produce an SCM

An amendable copy of the original CLASS data flows through to the SCM

De-coupled

Further detail of the problem• Should the broker always create a new TR, to answer a query?

– Not necessarily so (duplication of effort for all)

– Suggest minor amendments to SP&P (section 3.1.3.1.& 3.1.3.1.1.) – Simply adding an email, or document to the IMR may resolve the query

• Should the broker amend or delete the TR?– Depends on the nature of the query and what is wrong with the original

TR– Depends upon what course of action the broker and the agreement

party that raises the query, decide upon– Focus should be upon getting the CLASS data ‘right 1st time’

• Always pay attention to the Public Comments– The ECF file often gives no clue that our prior comments have been

actioned/ addressed

Proposed change to SP&P

• Section 3.1.3.1. currently reads:• --- brokers must not load documents and assign them to

a TR on which the Lead Agreement Party has already added a response. All documents loaded after a Lead Agreement Party has added a response must be assigned to a new or replacement TR unless responding to a “Query/Return” response made by the Lead Agreement Party

Proposed change to SP&P•Suggest reword as:

•When an Agreement Party enters a response of Seen/Action; Agree Pay or Query/Return the broker must act upon that query, and/or supply all new documentation. The broker may load the additional documents to the IMR under the same transaction.However there will be no automatic notification to the Agreement Party who raised the query and the broker must therefore advise the Agreement Party of the new documents via means outside of ECF (e.g. telephone, email,etc.

•This agreement party will decide whether an amended or replacement transaction is required.

Proposed best practice• This complex and confusing issue can be assisted by:

– Endeavouring to query the TR, only when the CLASS data is incorrect (as opposed where there is a concern over the claim).

– If the TR is a settlement, Query/Return may be the only option– Both the broker and the agreement party should look to resolve any

query asap and via the most appropriate method. Options include:• Phone• Email (that can then be added to the IMR by broker or lead agreement party)• Amending the existing TR (or even deleting and replacing)• Additional CLASS TR, if warranted

– Would be helpful to amend the broker narrative, to enable the agreement party to see how the TR has been amended

• Responsibility for ensuring that the query gets resolved lies with:– a) Primarily the broker, to action the comments made within the Public

Comments (regardless of the system response)– b) The agreement party that raises the query

Residual Issues

• As the volume of ‘queried’ items grows, we will see two things:

• a) Innaccurate statistics of ‘unactioned’ items• b) More claims becoming ‘Revert to Paper’.• This due to the fact that a queried TR may ‘jam’

responses to later TR’s (unless the original query can be lifted). See example that follows

Residual Issues

Residual Issues

• 1st TR loaded, then subsequently queried on March 12th.

Residual Issues

• 1st TR loaded, then subsequently queried on March 12th.

• No further TR’s can be responded to, till the query on TR001 is removed

• The ’15 line’ limitation on text within the Public Comments may be insufficient to facilitate the query and resolution

Summary Best Practice• Query the TR when the CLASS data is incorrect (as opposed where

there is a concern over the claim). • If the TR is a settlement? (Query may be the only option).• Both the broker and the agreement party should look to resolve any

query asap and via the most appropriate method. Options include:– Phone– Email (that can then be added to the IMR by broker or lead agreement

party)– Amending the existing TR (or even deleting and replacing)– Additional CLASS TR, if warranted

• Would be helpful to amend the broker narrative, to enable the agreement party to see how the TR has been amended

• Responsibility for ensuring that the query gets resolved lies with:– a) Primarily the broker, to action the comments made within the Public

Comments (regardless of the system response)– b) The agreement party that raises the query