Loss Funds
Introduction
The use of Loss Funds, to facilitate the swift settlement of claims, has long been a common practice in the London Market. All Loss Funds become due for repatriation however, and where this is overlooked, third parties continue to maintain cash credits that should rightfully be returned to insurers.
Objective
1. To establish those Loss Funds where cash credits should be returned to insurers, resultant from any of the following:
- All losses have been paid, and there remains a surplus of cash in the fund itself
- Accounts have been transferred between brokers but the ongoing administration of the associated fund has been overlooked
- Broking administration staff have moved elsewhere but the ongoing administration of any Loss Funds has been overlooked
- An insurer has been replaced mid-term, but is not included in cash return distribution, where the full fund value is unused
- Outstanding Loss reserves no longer justify the maintenance of a Loss Fund
2. To identify data inaccuracies relative to "claims paid", and establish an accurate position of a Loss Fund deficit or surplus throughout its lifespan.
Services
By way of Coverholder / Third Party communication, establish the position of paid claims / recoveries, and reconcile these against initial Loss Fund cash credits / subsequent cash injections, and thereafter make the necessary arrangements for any redundant Loss Funds to be repatriated.
Benefits
Our existing infrastructure, broker relationships and data recording system, enables us to undertake review work with minimal impact upon our clients’ Claims Departments, and also provides clients with:
- Confidence that Loss Funds are not maintained unnecessarily
- Improved cash flow through repatriation
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