Chapter 9 Flashcards
Delegated Underwriting (15 cards)
Who can underwrting authority be delagated to?
- Another or consoritum of insurers
- Broker
- Another entity all together
What is a consortium?
A group of insurers who have formed an agreemenet to accept risks together in a set proportion
How long is a consortium set up for?
A year
What are the benefits of a consortium?
- Placing process quicker and more efficient for broker
- Consortium leader gets a commision for the trouble
- Followers access to business without seeing broker
What is the difference between a line slip and a consortium?
Line slip is brought together by the broker
What are the benefits of a line slip / facility?
- Efficient for broker when placing risks that fall withi criteria
- Insurers gain access to business without having to agree the risks individually
What is a declaration?
Individual risk presented for agreement by broker so it can be attached to the line slip
Why would an insurer delegate underwriting?
- Manpower
- Local Access
- Other Access
What is the term for a delegated underwriting partner?
Coverholder
How much of Lloyd’s business do coverholders write?
30 - 35%
How do Lloyd’s assess potential coverholders?
- Suitability and experience of those working for applicant
- Systems and controls in applicant’s infrastcture
- Financial status of the applicant
- Authority of applicant to operate in specified territories
What system is used for application to be a coverholder?
Atlas
What does a coverholder applicant need to indicate?
- Type of work they are applying to be involved with
- Areas of the world they operate from, where they will be accepting risks
What are the two types of coverholder?
- Approved coverholder
- Service Company
What is a service company?
Set up by a managing agent with authority to write insurance under a binding authority from a syndicate
