1. Real-life example 1 data transfer  Situation: u $150,000,000.00 loss gets reported by TPA u Insurer’s system accepts only 8 digits numbers for Incurred amounts u 150M is recorded as 50M  Result: u Severe under-reserving u Company in run-off is now

2. Real-life example 2 duplicates  Situation: u TPA pays losses, client receives Recoveries u Incorrectly performed join u Every claim with multiple recoveries was accounted for several times  Result: u Severe overpayment by Insurer u Company is in run-off now

3. Real-life example 3 absent fields  Situation: u A construction damaged foundations of quite a few houses u Multiple GL claims constituted the same occurrence – subject to a limit u TPA bordereaux didn’t have “Location” field  Result: u Severe overpayment by Insurer u Company is in run-off now

4. Real-life example 4 “statistical” payments  Situation: u Claim files moved to new TPA u New TPA tracks only new payments on open claims (and adds to a total of closed before) u Old payments on reopened claims are double- counted  Result: u Severe overpayment by Insurer u Company is in run-off now

5. Real-life example 5 classification  Situation: u Treaty has a deductible on Med-only claims u TPA doesn’t support Med-only indicator u TPA lumps Med and Ind payments into single NetLoss field  Result: u Severe overpayment by Insurer u Company is in run-off now

6. Real-life example 6 perfect data  Situation: u TPA data do not contain any errors u Except… u …their accounting department continues to bill a Carrier for a non-renewed account  Result: u Severe overpayment by Insurer u Company is in run-off now

7. Multiple Claims Multiple Evaluation Dates Multiple Policies Fertile Grounds for ERRORS

8. Within Loss Run Across Multiple Loss Runs for Multiple Policies Avalanche of ERRORS