1. 2009 General Meeting ● Assemblée générale 2009 Ottawa, Ontario ● Ottawa (Ontario) 2009 General Meeting ● Assemblée générale 2009 Ottawa, Ontario ● Ottawa (Ontario) Canadian Institute of Actuaries Canadian Institute of Actuaries L’Institut canadien des actuaires L’Institut canadien des actuaires Session/séance : PD-10 Individual Claims “On the Front Lines” Speakers/conférenciers : Stacey Howe, Tracy Swift

2. Working Together 2009 General Meeting Assemblée générale 2009

3. On The Front Lines: DI & LTC Overview Contract Definitions Parts to a Claim Best Practices Claims Management Challenges Case Studies Questions 2009 General Meeting Assemblée générale 2009 2009 General Meeting Assemblée générale 2009

4. DI: Overview Types of coverage » Income Replacement » Office Overhead » Pension » Buy-Sell Benefit Period » 1 – 2 years » 5 years » To age 65 » Lifetime » Lump sum 2009 General Meeting Assemblée générale 2009 2009 General Meeting Assemblée générale 2009

5. DI: Overview Average age at policy issue » 33 years old Average age of claimant at onset of claim » 42 years old 2009 General Meeting Assemblée générale 2009 2009 General Meeting Assemblée générale 2009

6. DI: Overview Top causes of claim Musculoskeletal Mental » These causes of claim are often overlapping Subjective and Complex Claims Non-medical factors are often driving the claim » Workplace/business issues » Family dynamics » Substance abuse » Financial problems 2009 General Meeting Assemblée générale 2009 2009 General Meeting Assemblée générale 2009

7. DI: Overview Top occupations » Physician » Dentist » Dental Hygienist » Other Healthcare » Small Business Owner » Lawyer 2009 General Meeting Assemblée générale 2009 2009 General Meeting Assemblée générale 2009

8. DI: Contract Definitions Regular Occupation The gainful occupation in which you are engaged at the onset of disability. Total Disability – Standard Your inability, due to Injury or Sickness, to perform the substantial duties of Your Regular Occupation. Total Disability will not exist while you are engaged in any gainful occupation. 2009 General Meeting Assemblée générale 2009 2009 General Meeting Assemblée générale 2009

9. DI: Contract Definitions Total Disability – Own Occupation Your inability, due to Injury or Sickness, to perform the substantial duties of Your Regular Occupation. 2009 General Meeting Assemblée générale 2009 2009 General Meeting Assemblée générale 2009

10. DI: Contract Definitions Residual Disability As a result of Injury or Sickness: 1) You are not Totally Disabled; and 2) You are engaged in Your Regular Occupation or another occupation; and 3) Your loss of earned income is at least 20% of your prior earned income. 2009 General Meeting Assemblée générale 2009 2009 General Meeting Assemblée générale 2009

11. DI: Contract Definitions Residual Disability Payment is on a proportional basis and eligible to the maximum benefit date » To age 65 » Lifetime 2009 General Meeting Assemblée générale 2009 2009 General Meeting Assemblée générale 2009

12. DI: Contract Definitions Partial Disability As a result of Injury or Sickness: 1) You are not Totally Disabled; and 2) You are either: i. Engaged in Your Regular Occupation, but are unable to perform one or more of the important duties, or are unable to work for more than half of the time usually spent at that occupation; or ii. Engaged in another gainful occupation, but are unable to work for more than 20 hours per week. 2009 General Meeting Assemblée générale 2009 2009 General Meeting Assemblée générale 2009

13. DI: Contract Definitions Partial Disability Payment is generally 50% and may be time- limited » 6 to 36 months » Benefit could reduce to as little as 25% after a set period The terms “Residual” and “Partial” are sometimes used interchangeably 2009 General Meeting Assemblée générale 2009 2009 General Meeting Assemblée générale 2009

14. DI: Parts to a Claim Claimant Claimant Statement Financial Documents » Income Tax Returns » Financial Statements » Business Records Occupational Verification » Business Partners » Business Contracts » Employer Physician Attending Physician Statement 2009 General Meeting Assemblée générale 2009 2009 General Meeting Assemblée générale 2009

15. DI: Claims Management Challenges Defining occupational duties Obtaining independent sources of information Uncovering non-medical drivers What is really driving the claim Return-to-work strategies Do not have the benefit of an employer 2009 General Meeting Assemblée générale 2009 2009 General Meeting Assemblée générale 2009

16. DI: Claims Management Challenges Other motivating factors Tax-free benefit Own Occupation Rider Savvy consumer Understands the contract 2009 General Meeting Assemblée générale 2009 2009 General Meeting Assemblée générale 2009

17. DI: Best Practices Proactive Disability Management Early intervention for optimal outcome Will minimize the claim’s duration, both within and outside the context of economic recession Subjective and Complex Claims A claimant will be less likely to return to work until underlying issues are addressed and/or resolved 2009 General Meeting Assemblée générale 2009 2009 General Meeting Assemblée générale 2009

18. DI: Best Practices Telephone Communication Obtain and clarify information Uncover claim drivers Obtain claimant’s perspective on their situation Description of Occupational Duties Must understand job duties to assess disability 2009 General Meeting Assemblée générale 2009 2009 General Meeting Assemblée générale 2009

19. DI: Best Practices Investigative Tools Home Visit Surveillance Advance Payments & Lump Sum Settlements Alternate resolutions to the claim File Documentation Rationale for decisions and action plan for disability management 2009 General Meeting Assemblée générale 2009 2009 General Meeting Assemblée générale 2009

20. LTC: Claim Data Top causes of claim Alzheimer’s Disease (34%) Dementia (19%) Stroke (12%) Average age of claimant 80 years old Average duration of claim 2.76 years 2009 General Meeting Assemblée générale 2009 2009 General Meeting Assemblée générale 2009

21. LTC: Claim Data Target Consumer Ages 45-65 Average benefit amount $70 per day ($2100 per month) 2009 General Meeting Assemblée générale 2009 2009 General Meeting Assemblée générale 2009

22. LTC: Contract Definitions Long Term Care Facility Canadian institute licensed as a convalescent nursing facility, skilled nursing facility, a convalescent hospital, an intermediate care facility or custodial care facility. Must have continuous nursing services by or under the supervision of a physician or graduated registered nurse as well as a planned program of observation and treatment by a physician in accordance with existing standards of medical practice for the condition causing confinement. 2009 General Meeting Assemblée générale 2009 2009 General Meeting Assemblée générale 2009

23. LTC: Contract Definitions Home Care A program of medically necessary care, recommended by a physician and provided in your home by a licensed vocational nurse or other employee of a Home Care Agency. 2009 General Meeting Assemblée générale 2009 2009 General Meeting Assemblée générale 2009

24. LTC: Contract Definitions Eligibility Claimant must be confined in a LTC facility or receiving Home Care, on the certification of a physician as the result of: » Inability to perform 2 or more Activities of Daily Living (ADL) » Cognitive Impairment » Medically Necessary Condition caused or contributed to by a chronic illness » Injury or Sickness. 2009 General Meeting Assemblée générale 2009 2009 General Meeting Assemblée générale 2009

25. LTC: Parts to a Claim Claimant Claimant Statement Physician Attending Physician Statement Long-Term Care Facility or Home Care Provider LTC Questionnaire 2009 General Meeting Assemblée générale 2009 2009 General Meeting Assemblée générale 2009

26. LTC: Claims Management Challenges ADL’s Eating vs. Food Preparation Hands on vs. Stand by assistance Home Care Providers Licensed providers vs. friends & neighbours 2009 General Meeting Assemblée générale 2009 2009 General Meeting Assemblée générale 2009

27. LTC: Claims Management Challenges LTC Facilities Facilities which offer independent living as well as nursing care Married Claimants One claimant qualifies for Facility Care but their partner does not 2009 General Meeting Assemblée générale 2009 2009 General Meeting Assemblée générale 2009

28. LTC: Best Practices Telephone Interviews Clarify missing information Determine appropriate contact person Verify necessary documents Answer questions Plan of Care Clarify reimbursement of covered services Clarify frequency of obtaining medical update 2009 General Meeting Assemblée générale 2009 2009 General Meeting Assemblée générale 2009

29. LTC: Best Practices Overall Picture Family situation Services required » Home management services » Nursing services » Therapist (speech, occupational or physical) » Adult Day Care » Respite Care 2009 General Meeting Assemblée générale 2009 2009 General Meeting Assemblée générale 2009

30. DI: Case Study 1 Claim incurred in 2003 Policy issued in 2000 $10,000 monthly benefit is tax-free 45 year-old male Diagnosis is Anxiety Occupation is Financial Planner Definition of Total Disability To age 65 Own Occupation Rider 2009 General Meeting Assemblée générale 2009 2009 General Meeting Assemblée générale 2009

31. DI: Case Study 1 Questions in 2007 as to extent of claimant’s disability New diagnosis of Fibromyalgia No active treatment Level of activity unclear Claim investigation continues Rehab plans to reintegrate claimant back to work Surveillance to verify claimant’s activities 2009 General Meeting Assemblée générale 2009 2009 General Meeting Assemblée générale 2009

32. DI: Case Study 1 Surveillance reveals excessive activity Playing sports and socializing regularly No apparent limitations Claimant refuses to participate in assessments and return-to-work planning Raises further questions about validity of disability 2009 General Meeting Assemblée générale 2009 2009 General Meeting Assemblée générale 2009

33. DI: Case Study 1 Information on file supports termination of claim However, there are challenges » Medical information vs. insurer’s evidence » Own Occupation definition of Disability » Legal climate Claimant remains totally disabled under the terms of the contract Investigation of claim continues 2009 General Meeting Assemblée générale 2009 2009 General Meeting Assemblée générale 2009

34. LTC: Case Study 1 81 year-old female Currently lives at home Diagnosis is Osteoporosis Claimant is due to enter LTC facility March 2010 The doctor has confirmed that once in the facility, she will require help with bathing and meal preparation 2009 General Meeting Assemblée générale 2009 2009 General Meeting Assemblée générale 2009

35. LTC: Case Study 1 Claim for Facility Care submitted Claimant’s children submit a claim on her behalf Family awaits claims decision Family cannot afford this facility without the funds from her policy Looking for advance approval of claim before signing documents to confirm the claimant’s spot in the facility 2009 General Meeting Assemblée générale 2009 2009 General Meeting Assemblée générale 2009

36. DI: Case Study 2 Claim incurred in 2006 Policy issued in 2000 $5,000 monthly benefit is tax-free 33 year-old female Diagnosis is Cervical Disc Disease Occupation is Chiropractor Definition of Total Disability To age 65 Own Occupation Rider 2009 General Meeting Assemblée générale 2009 2009 General Meeting Assemblée générale 2009

37. DI: Case Study 2 Questions in 2008 as to extent of claimant’s disability Details obtained during home visit inconsistent with documentation on file Claim investigation continues Rehab plans to reintegrate claimant back to work Background check to verify business activities 2009 General Meeting Assemblée générale 2009 2009 General Meeting Assemblée générale 2009

38. DI: Case Study 2 Claimant refuses to participate in return-to-work planning Raises further questions about validity of disability Background check reveals excessive activity Claimant participates in physical fitness competitions Contradicts medical information on file 2009 General Meeting Assemblée générale 2009 2009 General Meeting Assemblée générale 2009

39. DI: Case Study 2 Information on file supports termination of claim However, there are challenges » Medical information vs. insurer’s evidence » Legal climate Claimant remains totally disabled under the terms of the contract Investigation of claim continues 2009 General Meeting Assemblée générale 2009 2009 General Meeting Assemblée générale 2009

40. LTC: Case Study 2 79 year-old male & 78 year-old female Couple send in claims for Facility Care Secured a “couples” room at a LTC facility and moved in the week prior Male: diagnosis is Stroke Can no longer care for himself Requires assistance with bathing, eating, dressing and transferring Moved directly from the hospital to the facility 2009 General Meeting Assemblée générale 2009 2009 General Meeting Assemblée générale 2009

41. LTC: Case Study 2 Female: diagnosis is Memory Loss Requires stand by assistance while transferring, and help with bathing Her husband has helped with these needs for the past 3 years Claimant moved from their home to the facility Home is for sale Couple received a premium discount for buying their policies jointly 21 years ago 2009 General Meeting Assemblée générale 2009 2009 General Meeting Assemblée générale 2009

42. Questions? 2009 General Meeting Assemblée générale 2009