The Vanishing Approval Step
A regional insurer's commercial claims team processes about 900 claims a month. The documented process says every claim over $10,000 gets a second-level approval before payment. Last quarter, audit sampled 120 high-value claims and found 31 paid without the second approval. The claims system logs approvals, but the approval field is optional and defaults to blank when the supervisor is on leave. Three supervisors cover two regions, and one region has had no permanent supervisor for five months. Staff say they "just pay it if it's been sitting." The average cycle time for high-value claims is 9 days versus the 4-day target, and customer complaints about delay have doubled. The audit committee wants a fix within 60 days.
1. Diagnose why the control is failing and recommend the first three changes, in priority order, with justification.
Read the worked answer
The symptom (31 of 120 unapproved) is not a training problem; it is a process design problem with three reinforcing causes.
- Optional field = no control. A control that can be left blank is a data-entry suggestion, not a gate. The system should block payment release when the required approval is absent, with a documented exception path (e.g., delegated approver or time-boxed override with reason code).
- Capacity gap in one region. No permanent supervisor for five months means the required step has no owner. Redesign the approval matrix by role and delegation, not by named person, so absence does not remove the control.
- Workaround incentive. Staff pay stale claims because the queue pressure is real. If the control blocks payment, work will pile up unless you add a capacity or triage mechanism.
Priority order: (a) make the control mandatory in the system with a logged exception route; (b) fix the approval matrix and delegation; (c) add a queue-age trigger that escalates to a backup approver. Track the unapproved-payment rate and cycle time weekly. Do not announce a crackdown before the capacity fix, or you will trade compliance risk for service failure.
2. The audit committee asks whether the 60-day deadline is realistic. What do you tell them, and what evidence supports your answer?
Read the worked answer
A 60-day window is realistic for the control fix but not for proving the outcome. Separate the two.
Achievable in 60 days: system configuration to require approval, a written delegation matrix, a queue-age escalation rule, and a training note. These are design and configuration changes, not behavior change at scale.
Not provable in 60 days: a sustained drop in unapproved payments and cycle time. Behavior and backlog effects need at least two full monthly cycles, and the backlog of stale claims must be cleared first, which may temporarily raise cycle time.
Tell the committee: "We can have the control in place and tested within 60 days. We will report leading indicators (percentage of claims blocked for missing approval, exception volume) at day 60 and outcome measures (unapproved rate, cycle time) at day 120." Offer a clear definition of done and name the owner. This is more credible than promising the outcome, and it protects the team from a false deadline that encourages more workarounds.