Suspense System

INTRODUCTION

The purpose of a suspense system is to call an item to your attention that requires that action be quickly taken. Your suspense system must be regarded as a priority procedure in your office. The system must be accurate, infallible, and easy to use.

A suspense system is of little value if it adds more work to your agency's handling of paperwork. It is of little value if items are suspended improperly or if they are ignored, and action is not taken in a timely manner.

The following section will discuss the advantages and drawbacks of automated and manual systems, and outline ways in which each can be used to effectively service clients and avoid errors and omissions exposure.

OVERVIEW

Automated suspense systems have simplified the suspense process to a great extent, because computerized follow-up lists are generated for each person on a regular basis. However, problems do arise when the computer breaks down, the information input is incorrect (so an important suspense time is missed), the person responsible puts the list aside and it's lost or ignored, or manual back-up is required.

There are many ways of structuring a manual suspense system-some are centralized, while others are maintained and processed by the individual.

The purpose of this section is to give you some idea of what to put into your suspense system, and how to use the output most effectively.

ERRORS & OMISSIONS POSSIBILITIES

Every facet of the agency operation deals with dates, and when a date is missed:

• a policy may not have been renewed


• a new policy may not have been received


• a request may not have been responded to


• a coverage may not have been added


• a promised telephone call may not have been made


• a promised check may not have been received

Any one of the above instances can result in an uninsured accident or loss, or a cancelled policy, bringing on an E & O claim against your agency. At the very least, this could mean the loss of an account.

When introducing new staff members to your suspense system, be sure to impress upon them the importance of suspending. Each employee must give priority attention to the handling of each and every suspense item.

AUTOMATED SUSPENSE SYSTEMS

Every automated suspense system is different. Some computers allow you to design your own customized format. If you decide to design a system, take the time to gather input from the departments that will be using it, and, if possible, review with other agencies what has been successful for them. A poorly designed system will not be a usable tool, no matter how hard you try to enforce its use.

Advantages

1. Each employee receives a list of suspended items each day (or as often as printed) through a centralized system.


2. Should any employees be out ill, their printed lists can be reviewed by management and assigned to other employees for completion.


3. Once a suspense list has been established, and all items marked as having been completed or re-suspended, the list is returned to management. It then becomes a management tool to determine the efficiency of employees.

Disadvantages

1. If the computer breaks down or there's a power outage, no list is generated. Because of this potential problem, there's a need for a back-up manual system to generate the list.

Recommended Procedures

1. Suspense every item realistically. For instance, if it takes 60 days for your companies to issue endorsements, then suspend for 60 days. Most important, when there is a deadline involved, suspend 10 days prior to that to allow for additional immediate action.


2. Educate your insureds. When selling an account, explain that, during a policy year, it is possible that you or the company may need additional information, such as drivers' license numbers, financial or health statements, signatures on endorsements, evidence of loss control recommendations compliance, and, especially, payment of premium. Emphasize the importance of responding immediately to such requests.


3. Follow up suspense lists in the following manner:


1. Prioritize your list. Mark in red those items needing immediate attention. Pull the files and take action.


2. Draw a line through the suspended item, indicating that it is completed and should be deleted from the list. (Some computers leave an item on the list and it continues to appear until deleted.)


3. Re-suspend an item by writing a new date in the left margin and update the message with any change.


4. At the end of the day, require all employees to turn in the printed copy of each suspended record to the word processing operator for updating.


5. After the disks have been updated, require that printed copy be forwarded to management for review and subsequent filing. This will help managers determine an employee's efficiency and may help them to spot problems and intercede.


6. The printed copies of the suspense should be filed chronologically for each employee. These should be kept in order to check in the event of an E & O claim or other question concerning how a particular account or item was handled.


7. All appointments should be entered on the suspense list [and it's recommended that a back-up desk or pocket calendar be used to avoid missing any appointments).


8. Create a manual back-up system. Many offices simply back up on an individual basis, just in case of computer breakdown. Employees file a copy of the endorsement request or application by suspense date in their desk drawers or a nearby file cabinet. They pull copies daily and check them against their list. This is extra work, but many offices feel it is necessary to avoid a problem.

MANUAL SUSPENSE SYSTEMS

There are many manual suspense systems that do an excellent job of bringing an item to your attention for handling. We will describe two of these systems as options for your consideration.

Centralized v. Individualized Handling

Centralized suspense-giving one person the responsibility of pulling the suspense items and delivering them to the proper employees for handling-is one way of being certain that the suspended items are pulled. Where each employee pulls his or her own suspended items-individualized suspense-it is easy for employees to feel too pressured by other duties to make this a priority.

However, most employees prefer to handle their own suspense items and, if it is decided that suspense shall be handled in this way, then it's imperative that everyone understand that there can be no exceptions. The suspense must be pulled each day, or according to written procedure.

Advantages

Each employee has control of his or her own suspense system.

Disadvantages

Management has little or no opportunity to monitor the handling of the system, or the efficiency of the employees responsible for it.

Recommended Procedures

1. Suspend every item realistically. For instance, if it takes 60 days for your companies to issue an endorsement, then suspend it for 60 days. And when there is a deadline, suspend 10 days prior to that time to allow for additional immediate action.


2. Educate your insureds. When selling an account, explain that, during the policy year, it is possible that you or the company may need to contact them regarding additional information, drivers' license numbers, financial or health statements, signed endorsements, evidence of loss control recommendations compliance, and, especially, collection of premiums. Emphasize the importance of their immediate response.


3. Give your suspense system priority. Never feel that you're too busy to pull your suspense items for a given day. It might just be the day that a policy had to be renewed, and one of your insureds might end up with no coverage.

Manual Options

There are basically three manual suspense options from which you may choose. You'll need to determine how often you'll suspend-some agencies follow up daily, while others follow up every five days. Select the timing that works for your agency.

Option 1: You will need a supply of color-coded cards slightly larger in height than the customer file. The color-coded cards correspond to certain days of the month-days on which the CSR will check suspended items.

Here's how option 1 works:

1. Every item that becomes a subject of future follow-up should be stapled to a color-coded suspense card and put back into the customer file. The customer file is then put back into the file drawer.


2. On each follow-up date, pull all the files with the same colored card, indicating that these will be handled on the same date.


3. Take the necessary action, then remove the stapled memo or application from the card and process it, or re-suspend it by stapling it to a different colored card for a future date.


4. If a second request is necessary, photocopy the memo, write across the memo "second request," and send it to the company. (This should be infrequent, if the item is suspended for a realistic period of time the first time.)

Option 2: The method is the same, but color-coded folders are used in lieu of cards.

For this system, you'll need a number of manila folders dated 1 through 31, if you choose to establish a daily suspense system; or dated 5^th, 10^th, 15^th, 20^th, 25^th, and 30^th, if you choose to suspend every five days. You will need enough folders for three months.

1. As you type an endorsement request, application, letter to the insured, or some other item that requires suspension, mark the follow-up date on the second and third copies. File the third copy in the folder matching the follow-up date. Attach the second copy to the daily report (keeping a copy of the policy in your file). Of course, mail the original copy to the recipient, and distribute any extra copies required by your specific agency procedure.


2. When the suspended item comes in, pull the file for processing and, referring to the date of follow-up on the copy attached to the daily, find the folder showing that date and pull the suspended copy and discard it. Attach the second copy to the daily report with the correspondence for that policy.


3. Pull suspense on the date indicated on the folders, and follow up in the same manner as with Option l.

SOME TIMESAVERS TO AID YOUR SUSPENSE SYSTEM

Several " common sense" timesavers will really allow your suspense system to work for you. Standardized forms can save CSRs the time of retyping or otherwise transferring information-teach them to record it the first time on the appropriate form.

Keeping customer files at each CSR's desk can maximize efficiency and save time by eliminating a lot of walking to another part of the office to find a file. However, hunting for files throughout the office wastes everyone's time. Use "out" cards in place of a file you remove to indicate where it is.