How to Create a Non-Conformance Report for Insurance
A procedure for documenting, investigating, and resolving instances where policies, services, or processes do not conform to specified requirements.
Purpose
To provide a formal mechanism for capturing and managing non-conformances, ensuring they are properly investigated, corrected, and prevented from recurring.
Scope
Applies to all non-conformances identified during production, inspection, service settlement, audits, or customer complaints, across all departments.
Prerequisites
- Defined non-conformance classification criteria
- Access to the non-conformance reporting system
- Trained staff who understand how to identify and report non-conformances
Aligns with ASIC regulatory requirements, General Insurance Code of Practice, and AFSL obligations. Includes audit trail provisions.
Step-by-Step Procedure
Identify the Non-Conformance
Recognise that a policy, service, or process does not meet the specified requirement. Confirm the deviation against the relevant standard or specification.
- 1.1Compare the observed condition to the specified requirement
- 1.2Verify the non-conformance is genuine and not a measurement or interpretation error
- 1.3Contain the non-conforming item or process to prevent further impact
Raise the Non-Conformance Report
Create a formal non-conformance report in the system with all relevant details including description, location, quantity affected, and classification.
- 2.1Open a new non-conformance report in the tracking system
- 2.2Describe the non-conformance clearly with reference to the failed requirement
- 2.3Classify the non-conformance by type and severity
- 2.4Attach supporting evidence such as photographs and test data
- Include the specific requirement that was not met for clarity
Investigate Root Cause
Conduct an investigation to determine the root cause of the non-conformance using structured analysis techniques.
- 3.1Assemble the investigation team including relevant process experts
- 3.2Apply root cause analysis techniques such as five whys or fishbone diagram
- 3.3Document the identified root cause with supporting evidence
Determine Disposition
Decide what to do with the non-conforming items or outputs. Options include rework, use-as-is with concession, return to supplier, or scrap.
- 4.1Evaluate disposition options based on the nature and severity of the non-conformance
- 4.2Obtain required approvals for the selected disposition
- 4.3Execute the disposition action and record the outcome
Implement Corrective Action
Develop and implement corrective actions to address the root cause and prevent recurrence of the non-conformance.
- 5.1Define specific corrective actions with responsible owners and deadlines
- 5.2Implement the corrective actions
- 5.3Update relevant procedures and work instructions if needed
Verify Corrective Action Effectiveness
Confirm that the corrective actions have been implemented and are effective in preventing recurrence of the non-conformance.
- 6.1Verify implementation of corrective actions through inspection or audit
- 6.2Monitor the process for an appropriate period to confirm no recurrence
- 6.3Document the verification results
Close the Non-Conformance Report
Once all actions are verified as effective, close the non-conformance report and update quality metrics.
- 7.1Review all documentation for completeness
- 7.2Close the report in the non-conformance system
- 7.3Update quality dashboards and trend reports
Quality Checkpoints
Common Mistakes to Avoid
Expected Outcomes
Average number of days from non-conformance identification to verified closure, measuring responsiveness.
Percentage of non-conformances that recur after corrective action, indicating effectiveness of the resolution process.
Frequently Asked Questions
Who can raise a non-conformance report?
Any employee who identifies a non-conformance can raise a report. Organisations should encourage reporting at all levels to ensure issues are captured early.
What is the difference between correction and corrective action?
Correction addresses the immediate non-conformance, such as reworking a defective item. Corrective action addresses the root cause to prevent the non-conformance from recurring. Both are typically required.
When should a non-conformance report be raised?
A non-conformance report should be raised whenever a policy, service, or process does not meet a specified requirement. This includes deviations found during inspection, audit, testing, or reported by customers.
How are non-conformance reports tracked?
Reports are tracked through a centralised non-conformance management system that logs all details, assigns ownership, monitors corrective actions, and provides trend reporting.
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