Pohjola Insurance warned of failure in claim processing time

The Finnish Financial Supervisory Authority (FIN-FSA) on Thursday issued a public warning to Pohjola (OP) Insurance concerning claim processing times of workers' compensation and occupational accident and disease insurance during 2019–2022, said the FIN-FSA and OP in separate press releases.

The FIN-FSA has also highlighted the related deficiencies in information systems and internal control.

The company has failed to commence the processing of claims, issue decisions and submit statutorily required documents to the appropriate appeal body within the time limits provided in the Workers’ Compensation Act, said the FIN-FSA.

Furthermore, the company has lacked adequate internal control for claims function and reporting as well as information systems concerning claims function producing adequately reliable information.

“Pohjola Insurance Ltd has failed to comply with the provisions of the Workers’ Compensation Act on time limits extensively and for a long time. In the period from April 2020 to May 2021 and from January to November 2022, the company has failed to commence the processing of several claims without delay and no later than seven working days after the institution of the claim,” said FIN-FSA in the press release.

Furthermore, in 2019–2022, the company has failed to issue several statutorily required decisions promptly and no later than 30 days from having received adequate reports to resolve the matter.

In addition, regarding several appeal matters in the period from January 2019 to March 2021, the company has failed to submit statutorily required documents to the appeal body within 30 days of the end of the appeal period or, concerning matters requiring further evidence, no later than 60 days after the end of the appeal period.

Finally, the company has failed to comply with the provisions of the Insurance Companies Act and Commission Regulation (EU) No 2015/35 in 2019–2022, in lacking adequate internal control covering claims function and reporting pertaining to the Workers’ Compensation Act as well as information systems producing adequately reliable information regarding compliance with the two time limits.

Imposition of a penalty payment instead of issuing a public warning is not provided in the applicable provisions.

A public warning has been issued to Pohjola Insurance Ltd for these omissions. The decision is not yet legally binding. The company has the right to appeal the decision to the Helsinki Administrative Court within 30 days of receipt of notice of the decision.

According to the FIN-FSA, Pohjola Insurance had significant deficiencies in adhering to statutory time limits, especially at the beginning of the review period. The observed deficiencies have almost been fixed in full. The company has done persevering work to fix them, said the OP in the press release.

"We apologise for the inconvenience caused to our customers. We take adherence to statutory time limits and the FIN-FSA's warning very seriously. We have significantly increased the number of employees in handling these claims, been engaged in extensive systems development and enhanced the competencies of professionals in claims processing to correct the situation," said Vesa Aho, Chief Executive Officer of Pohjola Insurance.

The measures have significantly improved the situation. Currently, Pohjola Insurance processes statutory workers' compensation and occupational accident and disease insurance claims in full within the specified time limit.

The company's claim settlement decisions are made almost in full within the time limits. The required takeover time of statutory workers' compensation and occupational accident and disease insurance claims is seven working days and the time limit for issuing a claim settlement decision is 30 days.

Deficiencies in the organisation of internal control have been fixed since 2020. Pohjola Insurance has continuously further developed reporting and control related to the monitoring of processing and has increased the number of employees involved in control.

Pohjola Insurance will continue developing services related to statutory workers' compensation and occupational accident and disease insurance and will be in active cooperation with the FIN-FSA.

Pohjola Insurance will not appeal the decision, said the OP.