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Flashcards in Chapter 9 - Underwriters Deck (15)
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1

Role of the underwriter

Make decision on behalf of insurer whether to accept risk
& determines t&cs when acceptance made.

2

What is a ‘scratch’?

Initials & date
Confirming underwriter has seen the presentation made.

3

In a Lloyd’s syndicate who are underwriters employed by?

Managing agent

4

Functions of an underwriter

Manage pool of premiums as effectively and profitably as possible.
- assess risk
- decide to accept risk
- determine t&cs
- calculate premium

5

What is placing a risk on a ‘subscription basis’?

More than one insurer participating in a risk.

6

Why might an UW only take a proportion of a risk?

- Size of risk & authority levels
- Balancing portfolio
- Insurance broker input
- New class of business

7

Leading UW roles

- Review the risk presentation from the broker
- Consider whether to accept
- Decide t&cs
- quote premium

8

Following market underwriters

Support the leading underwriter and take a share of the risk - might request more premium before agreeing to support

9

What does ‘competition law’ prohibit?

Behaviour where the normal competitive nature of the insurance market is removed. Prevents markets acting together to detriment of client

10

BIPAR (European Federation of Insurance Intermediaries) 5 high level principles

1. Intermediary shall specify demands and needs of client
2. Before placing risk, intermediary will review and advise client on market structures to meet its needs
3. If client places risk, intermediary will review, explain relative merits and advise on options
4. After placing risk previously agreed premium of lead and following insurers will not be aligned upwards
5. Intermediary keep client informed of progress

11

Three different types of leader

Overall Leader
Slip Leader
Bureau Leader

12

General Underwriter Agreement (GUA) divides post bind changes into 3 categories

1. Non-material. Agreed leader only.
2. Anything not in 1 or 2. Leader & some agreement parties
3. Material changes. All underwriters.

13

What causes difficulties with electronic trading?

Multiple separate slips because of differences in t&cs - more parties have to be involved

14

Single Claims Agreement Party (SCAP) - Feb 2018

Allows subscribing insurers to agree at time of placing that claims will be agreed by a single insurer only. Slip leader. Must be Lloyd’s syndicate or UK auth insurer.

15

Ghost leaders

Suddenly involved in claims handling where they never intended to be. Created by existence of more than one slip, particularly with advent of electronic claims handling.