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Overview:
Mutual Life is one of Canada's largest insurers which served approximately 1.35
million people in 9,600 groups in Canada and the northern United States. It has five divisions
each headed by a senior or executive vice-president which includes the Group Division
headed by Alex Brown, senior vice-president. It specialized in employee group benefit
programs such as life, health, rehabilitation, and pension products. In August, 1992, Mutual
Life's Group Division developed a service that offered a no-questions-asked guarantee
equivalent to $10 for each employee covered up to a maximum of $10,000. George Draper,
the representative from Consolidated's Hamilton, Ontario, branch, client of Mutual Life, had
told Janet Desilva, regional group marketing director of Mutual Life, that he wanted to invoke
the Group client Service Guarantee. It is critical that Mutual Life makes sure that their clients
do not take advantage of the guarantee policy.
Problems:
At the Group Divisions of Mutual Life, the person claiming the guarantee policy,
frequently, does not understand the benefits of the program, or had claimed without letting his
or her mangers know. The employees do not know how to handle the claims. Such occurrence
causes some embarrassment for all parties involved. Mr. Brown is also the one handling all
the claims. Junior administrators making claims increase potential abuse. With the
introduction of the no-questions-asked guarantee, Group Division is exposing the company
to potential abuse. Customers without service complaints, take advantage of ...