Transactional Filing, 1

TRANSACTIONAL FILING

The use of transactional filing is not mandatory to the use of these procedures, but will provide efficiencies not found in the manual environment. When a procedure stipulates a filing step, it will assume the use of transactional filing, unless the procedure specifies a suspense file.

What is a paperless environment? Will we be able to fully rid ourselves of paper? What do we mean by paperless? We mean that the method of storing the information necessary to transact day-to-day business is automated on electronic files instead of the traditional paper files. The paper documentation of these transactions must be kept for E & O purposes, but will not be used once the data is stored in an automated management system.

We still will need to send paper to insureds and companies (memos, certificates, binders, etc.). How we maintain this paper documentation is the real issue.

I have stated for a long time that the only thing less efficient than a manual agency system is one that is both manual and automated at the same time. That is, an agency keeps the paper files in the same or similar way as they did prior to automating. At the same time, they are loading information into their automated system. To add to this inefficiency, the members of the agency then use both the paper files and automated files concurrently to transact business. If this be the case - where is the savings? I think you can see that this is worse than having just manual files.

I believe that one of the first steps to the paperless environment is to adopt the practice of transactional filing. The benefits of transactional filing are great. By using this practice, we are able to eliminate much of the time and effort connected with storing, filing, pulling, maintaining, and looking for customers' files.

First, we have to set up a permanent customer paper file. This is an alphabetical filing system containing each customer's file. In those files items such as original applications, inspections, appraisals, financial statements, claims files and other unique correspondence are established.

Actually, even these items can be included in the transactional file, if the date that information is documented on the computer note pad. It is truly more efficient to do it this way, because it will result in maintaining a single file system, not two.

Next we set up the transactional files themselves. This system is based upon the date that a transaction occurred. The work itself, whether an endorsement, renewal, correspondence, etc., is invoiced, processed and entered into the computer. A file folder is created for each day of the year. After entering the data into the computer, the paper documentation is filed by the date it was entered. In other words, a file labeled with a single date (month, day, year) would contain the paper for everything entered into the computer on that date. Since systems are different - some using entry date, some transaction date, some invoice date, etc.; the actual date used by your agency depends on the system you have, but whichever is used, the agency must be consistent.

Let's use the following example to clarify the process. A call from a customer requesting a change in auto coverage is received by the CSR. The CSR updates the data base and orders the endorsement from the company and a follow up date is established in the system. So far, so good. The customer's file has not been pulled!

Then the paper documentation, the endorsement, is received by the agency. The item is checked for accuracy, based upon the information in the customer's electronic file. It is then invoiced, if necessary, and the follow up date removed.

The CSR then either writes or date stamps the date on the paper endorsement that corresponds to the entry date used in the system. The paper is placed in a file tray labeled 'transactional filing.' At the end of the day the person responsible for filing picks up all the paper and files it in the appropriate dated folder.

The whole endorsement process has been completed without the necessity of pulling a paper file. Also, we have reduced filing time to a small fraction of the time that it used to take. The agency would use the same basic procedure for new business, renewals and cancellations.

Now that we have explained the basic concept, how does an agency get started? First, the agency must have a full customer and policy data base in their system.

Next, all transactions including new business, renewals, endorsements, claims, cancellations, etc. must be able to be processed on their system. Usually there is no problem with non- direct bill items, but some companies require use of their forms to order endorsements, etc. on direct bill items.

Everyone in the agency must have access to (and the inclination to) use the computer. If anyone, usually the principal, refuses to use the new system, it will undermine the entire process.

Finally, your system must be able to provide you with a listing of all customer transactions showing the dates of those transactions. The dates of these transactions will correspond to the file folder with the same date, which contains the actual paperwork.

Just think of the few instances that you need the actual file to review or prove exact wording. The necessity to assemble all the paper for a customer's policy will be rare. Just think of the number of hours that will be saved in a week, a month, a year, by this procedure!

I know the big question will be whether or not this process will increase your E & O exposure. The answer is NO. If your system will produce a listing of all transaction dates, you can find all of the paper documentation by going to the appropriate dated transactional files and pulling the appropriate documentation.

To start this practice you must pick a start date, hold your nose and jump in! The existing paper files will not be changed initially. The staff will know that everything filed prior to the date will be in the old files and everything after that date in the transactional files.

Next have a meeting to explain the concept, procedures, benefits, etc. to the staff. Answer all objections and get the full (or as nearly as you can) concurrence of everyone to give it a great try.

I think you should start with personal lines and then when you feel comfortable move to the small commercial accounts. It should also be noted that it is a lot easier to use this procedure if your system has an extensive 'notepad' capability.

Many of you will reject this whole idea as too radical, too dangerous, etc., but it is one of the changes that must be made to make full use of your automated and human resources and be able to improve your workflow and efficiency. It will also save you money. I think that anyone with a full time file person can see that their energies can be redeployed in other areas.