While underwriting establishes the risk relationship, it is the efficiency, accuracy, and integrity of the claims function that ultimately determine trust, financial stability, and market confidence.
In the context of operational resilience, “CBS-2 Claims Processing & Settlement” is not merely an operational workflow — it is a critical business service whose disruption could materially impact cedants, beneficiaries, and the broader insurance ecosystem.
Operational resilience expectations articulated in the Bank Negara Malaysia 2025 Discussion Paper on Operational Resilience require financial institutions to identify their critical business services and clearly map the underlying processes that enable their continuous delivery.
For MLRe, this means breaking down the end-to-end claims lifecycle into detailed, manageable Sub-CBS components to ensure each stage is governed, measurable, recoverable, and resilient to disruption.
This chapter, therefore, moves beyond high-level service identification and provides a structured articulation of the detailed processes (Sub-CBS) underpinning CBS-2 Claims Processing & Settlement.
The purpose of this chapter is to provide readers with a clear, structured, and operationally practical breakdown of the detailed business processes that collectively enable MLRe’s Claims Processing & Settlement service.
By reading this chapter, the reader will understand how the claims function is decomposed into measurable and manageable Sub-CBS components, how each contributes to service continuity, and how operational resilience principles are embedded within each stage.
This foundation prepares the reader to subsequently assess dependencies, identify vulnerabilities, define impact tolerances, and design response and recovery strategies in alignment with regulatory expectations.
|
Sub-CBS Code |
Name of Sub-CBS |
Description of Sub-CBS |
|
2.1 |
Claim Notification & Receipt |
Initial intake of claim notifications from cedants (life insurers), including notification details, policy references, and preliminary documentation. Ensures logging of claim events, assignment of tracking ID, and validation of receive date/time to meet service standards. |
|
2.2 |
Document & Data Verification |
Verification of submitted claim forms, supporting medical/legal documents, policy coverage, and beneficiary information. Identification of missing items and follow-up with cedants to ensure completeness within regulatory timelines. |
|
2.3 |
Preliminary Assessment & Triage |
Initial assessment to determine claim validity, categorise claim type (e.g., mortality, critical illness), and prioritise based on urgency. Decision on whether further investigation is needed. |
|
2.4 |
Detailed Claims Assessment |
Technical evaluation by claims analysts/underwriters, including actuarial review, medical review where required, and cross-checking against reinsurance treaty provisions, limits, and exclusions. Determines eligibility and provisional settlement calculations. |
|
2.5 |
Third-Party Engagement & Investigation |
Engagement with external parties (e.g., medical examiners, loss adjusters, legal counsel) for further fact gathering or dispute resolution when required. Ensures independent evidence collection and supports accurate evaluation. |
|
2.6 |
Claims Decisioning & Approval |
Final claim determination, including approval or repudiation. Involves multi-level review, compliance checks, and governance sign-off by authorised personnel consistent with internal policies and regulatory requirements. |
|
2.7 |
Settlement Calculation & Fund Disbursement |
Calculation of payable amounts based on treaty terms and approved claim decision. Preparation of settlement documentation and execution of funds transfer to cedants or clients. Includes reconciliation of payments and audit trails. |
|
2.8 |
Claim Communication & Reporting |
Formal notification of claim decision to cedant,s including payment advice or reason for denial. Ensures transparent communication and supports dispute escalation channels if cedants disagree with outcomes. |
|
2.9 |
Record Archival & Compliance Reporting |
Secure storage of claim records, audit trails, correspondence, and decision logs. Preparation of regulatory reports for Bank Negara Malaysia as applicable, and internal governance reporting to demonstrate process resilience. |
|
2.10 |
Continuous Improvement & Analytics |
Post-claim review to analyse key performance indicators (turnaround times, errors, disputes) and drive process improvement. Feedback is used to enhance systems, controls, and resilience capabilities in line with operational resilience expectations. |
While the 2025 BNM Discussion Paper on Operational Resilience does not prescribe reinsurance-specific steps, it emphasises that financial institutions must define critical business services (such as claims processing) and ensure processes are robust enough to prevent, respond to, and recover from disruptions. This includes clear governance, accountability, and continuity of core functions.
In this context, each Sub-CBS above outlines a core step in the claims lifecycle, supporting end-to-end resilience — from intake and review to settlement and reporting — so that operational disruption (e.g., systems outages, data issues, third-party failures) does not materially impact the ability to process and settle claims.
The detailed articulation of Sub-CBS for CBS-2 Claims Processing & Settlement provides more than a process map — it establishes the foundation for operational resilience implementation.
By defining each discrete stage of the claims lifecycle, MLRe can identify key dependencies (people, systems, data, third parties), evaluate potential points of failure, and set appropriate impact tolerances consistent with regulatory guidance.
For a reinsurer, resilience is not abstract. Delays in claims settlement can affect cedants’ liquidity, policyholder confidence, and systemic stability within the insurance sector.
Therefore, operational resilience begins with clarity — clarity of processes, accountability, governance, and recovery capability.
With the Sub-CBS structure now established, the organisation is positioned to move into deeper resilience analysis: dependency mapping, severe but plausible scenario testing, disruption management, and continuous improvement.
In doing so, MLRe strengthens not only its operational robustness but also its role as a trusted risk partner within Malaysia’s financial services ecosystem.
|
Building Organisational Resilience: An Operational Resilience Guide for Malaysian Life Reinsurance |
|||||
| eBook 3: Starting Your OR Implementation |
|||||
| CBS-2 Claims Processing & Settlement | |||||
| CBS-2 DP | CBS-2 MD | CBS-2 MPR | CBS-2 ITo | CBS-2 SuPS | CBS-2 ST |
For organisations looking to accelerate their journey, BCM Institute’s training and certification programs, including the OR-5000 Operational Resilience Expert Implementer course, provide in-depth insights and practical toolkits for effectively embedding this model.
Gain Competency: For organisations looking to accelerate their journey, BCM Institute’s training and certification programs, including the OR-5000 Operational Resilience Expert Implementer course, provide in-depth insights and practical toolkits for effectively embedding this model.
To learn more about the course and schedule, click the buttons below for the [OR-3] OR-300 Operational Resilience Implementer course and the [OR-5] OR-5000 Operational Resilience Expert Implementer course.
|
If you have any questions, click to contact us. |
||
|
|