Case Application for
Private Medical Insurance:
An introduction
PMI1A
This case application can be used as a further learning support
in your studies.
Copyright © Insurance Institute of Ireland 2011
This Case Application is issued by Insurance Institute of Ireland (III) to members taking courses and/or examinations of the III. It may not be used in whole or in part for any course of study/examination of any other body whatsoever without prior permission in writing of the III. This Case Application, or any part there of, may not be made available in any library and it may not be reproduced, in whole or in part, stored in a retrieval system or transmitted in any form or by any means – electronic, electrostatic, magnetic, mechanical, photocopying, recording or otherwise, without prior permission in writing of the III.
Case applications have been developed to allow an active learning environment that can be described as student centred activity based. The case studies have an element of both a project-based and problem-project-based learning approach.
The following is a summary of the course content for the PMI1A module that will be explored upon in the case application:
PMI1A
Private Medical Insurance & Risk The Healthcare System & PMI Market
Contract & Agency Insurable Interest Utmost Good Faith
Proximate Cause Indemnity
Contribution & Subrogation Valid Claims & Claims Settlement
Statutory Regulation
Should you have any queries during your studies, please contact the Student Services Department of the III at (01) 6456600 or studentservices@iii.ie.
In addition, we have a Module Feedback Questionnaire. This questionnaire is designed to give students the opportunity to provide comments and feedback on this module and is available on
www.iii.ie
PMI1A
Student Services 01 – 645 6680
CASE APPLICATION PMI1A
Lorcan is a 47 year old man, married to Alison with 3 children (Evie 9, Mark 18 & Janine 21). The family live in a semi-detached house near Roscommon and have 2 cars. He works for a medical devices company in Roscommon and is the coach with the local football team.
TUTORIAL
Case Application questions in relation to each PMI1A chapter :
1 PRIVATE MEDICAL INSURANCE AND RISK
Mark, Lorcan’s 18 year old, is doing a project for his Business Studies module in University and has asked Lorcan to help him out with the topic ‘The operation of insurance (pooling,
classification and insurability) and its benefits in the economy’. Analyse this topic.
2 THE HEALTHCARE SYSTEM AND THE PRIVATE MEDICAL INSURANCE MARKET
Alison is in the process of renewing the family’s PMI cover when Lorcan asks her why they cannot just use the public healthcare system. Alison explains why differentiating between the cover provided by the public and private systems and the relationship between the two systems. Discuss the issues Alison will address.
3 CONTRACT AND AGENCY
‘Contracts are all about a meeting of minds’ says Mark’s lecturer. A class discussion follows in
which the issues of offer, acceptance, consideration and termination are addressed. Discuss the issues addressed.
4 INSURABLE INTEREST
Evie, Lorcan’s 9 year old daughter, has overheard recent conversations in the house on insurance and has decided that this could be a great way to earn extra pocket money. In short, she thinks, you insure something (or someone), it has an ‘accident’ and the insurance company gives you money – win-win situation really. Worried for the safety of his property and family members, Lorcan attempts to explain to Evie why insurable interest is so important in insurance and how it works in practice.
Insurance premiums can be expensive and one night when trying to balance the family’s finances, Lorcan considers how the principle of utmost good faith and the requirement to ‘reveal all’ can seem like a negative for consumers and how being ‘careful’ with the truth might seem like an appealing way to reduce premiums (to ‘forget’ to mention that Alison’s jewellery is a priceless heirloom, that they don’t actually have a burglar or smoke alarm, that Grandpa Max has a conviction for theft). Explain to Lorcan how, in the long run, utmost good faith is the keystone to the whole relationship of trust which must exist between the insurer and the insured.
6 PROXIMATE CAUSE
Janine, the family’s resident conspiracy theorist, concludes that the principle of proximate cause is the insurer’s method of refusing to indemnify the insured – a huge loophole in the insurance process. Alison tries to explain that, though the concept appears complicated, it is really a case of tracing back to the cause of the event in order to determine if it was insured or not. She defines proximate cause for Janine and illustrates how it is applied and modified in insurance.
7 INDEMNITY
‘The calculation of indemnity differs depending on the subject matter and policy terms in
question’ says the intermediary from which Lorcan’s employers purchase their insurance during
a presentation to the company’s management. ‘How ?’ asks Lorcan. Critically analyse the statement made by the intermediary to Lorcan and the management team.
8 CONTRIBUTION AND SUBROGATION
‘If contribution and subrogation were not applied, the principle of indemnity would not be
maintained’ states the headline in Lorcan’s newspaper. Lorcan reads on to understand why this
is so. Discuss.
9 VALID CLAIMS AND CLAIMS SETTLEMENT
Lorcan has made a claim against his PMI and is worried that his claim will be a long drawn out process. However, his PMI Claim Handler states “Private Medical Insurers endeavour to deliver a simple and efficient claims process, that allows policyholders to concentrate on getting better,
rather than having to become involved in a lengthy administrative process”. In your groups,
10 STATUTORY REGULATION
On the six o’clock news bulletin, the newsreader comments “The Consumer Protection Code and the Minimum Competency Requirements are designed to protect consumers by ensuring that the behaviour and ability of those involved in insurance is sufficient to serve the consumer”. Intrigued by this statement, Lorcan decides to carry out his own research in relation to the two statutory documents. In your groups, outline the information that Lorcan will come across.
DISCUSSION QUESTION
“Private Medical Insurance is often considered an unnecessary expense by potential buyers”. Critically analyse this statement under the following headings:
• Issue • Reasoning • Application • Conclusion
