I recently sat on a panel discussion centred around a short set of topics that form a locus of interest of the requirements of Solvency II, particularly of Pillar2, and mainly on Operational Risk.  These topics were: Governance; Reserves; Data currency; Security; Process control and auditability and management of external services.  In previous posts of this blog, I gave my views on several of the topics and I conclude my report here:
 
5.     How can the claims director ensure that all incidents of data handling and exposure of details during the claims process are controlled and auditable to prevent any breach of privacy or data protection laws, limiting exposure to mis-processing resulting in litigation and reputational risk?

I think this is essentially the same answer as I have given before and that is the claims handling process should be automated. What systems are really good at is enforcing rules and providing workflow; people can’t circumvent like they can in manual processes or forget to do things or check things. Absolute automation is naïve but there are many pragmatic steps that can be put in place. The other thing systems are really good at is logging who did what and when. This provides an audit trail that is very difficult to achieve in a manual system.

The only points that I would like to reiterate here is the consistency and objectivity of the claim handling process delivered by the use of technology to control the claim process. If the company can be assured, via the use of common systems, that the TPA is processing the claims to the same SLAs and the same degree of scrutiny that they would use internally then this is a benefit.

Also the analytics and metrics delivered by a good system can also assist in measuring the performance of a TPA.