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4 Best Practices to Achieve a Zero Exceptions Report

May 30, 2017 / Reinsurance, TAI Software


Data integrity is essential to reinsurance administration. A key part of our role as analysts is maintaining data accuracy throughout the entire chain of business. Which means we are responsible for data throughout its entire life cycle. Having the right people, processes and technology in place can be extremely beneficial for maintaining data accuracy throughout its life cycle.

One tool our team of analysts uses to ensure accuracy while processing policies is TAI’s exception reports. This tool generates an itemized report of any policy that was not successfully processed as intended. The ultimate goal in reinsurance administration is to get a zero exceptions report. Why?

Having a zero exceptions report every billing period demonstrates accurate maintenance and consistency of data over its entire life-cycle.

So how does one achieve zero exceptions report? I recommend these 4 best practices.

  • Routine review of exceptions reports

If TAI is unable to process a policy as it is instructed to, the system will list the policy details, error code and message in the exceptions report. The policy is then marked by TAI and any premium payments that should have been made in the current period will be deferred until a reinsurance analyst manually resolves the error in TAI and bills the policy up to date.

Regular review of exception reports avoids marked policies from compounding and becoming more complex. One of our best practices is to solve error issues as we encounter them in our billing cycles so that error management becomes an easier process and exceptions are eventually reduced to 0.

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  • Prioritize Errors

Depending on the business, errors can be prioritized based on the type of error, the date the policy was marked, the policy face amount and ceded amount or the amount of unbilled premium to reinsurers or retrocessionaires.

In our regular billing cycle, Face Change errors are resolved first because policy face values are one of the more important factors that influence the cost of a life insurance policy. Next, we finish off the Paid-Up errors and Billing errors. Since it is in the best interest to pay premiums to reinsurers or retocessionaires accurately and timely, I recommend prioritizing marked policies that are currently ceded to reinsurers or retocessionaires.


  • Set up Exceptions Resolution Procedures

I once had an Exceptions Report that was 468 pages long. That is a lot to cover if you’re on a tight timeline or need to get exceptions resolved before the end of the billing period! Having a set of approved exceptions resolution procedures in place reduces time spent on explanations and allows more time fixing marked policies on TAI.

PRO TIP: A set of approved exceptions resolution procedures is also a great tool to train newcomers and can work as an internal audit item as well.

  • Working with your reinsurance software provider

For some errors, such as Pending Terminations, we have worked with TAI to build a utility program that automatically terminates policies that have lapsed for more than 3 months. When faced with 15,000 pending terminations, it’s easier to click off a program and let the system do its magic while I assess and resolve other marked policies. This demonstrates the value of having the right technology (and technology partners) in place as it allows you to use your time effectively.

I sincerely believe with all four workarounds are done regularly, I’ll reach that ultimate goal: a zero exceptions report!

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Written by
Erine Ruiz