8 Business Process

Question 1

Stages of forming and terminating a contract

Answer 1

Broker receives a quotation. These do not remain valid indefinitely - insurer can indicate period of validity

Question 2

Time period on quote if not specified

Answer 2

concept of ‘reasonable time’ applies - standard rule in contract law

Question 3

Insurer’s reference

Answer 3

specific to insurer. may contain data such as business code or indicator as to whether it is reinsured

Question 4

Why might broker not place 100% order of risk

Answer 4

client asked another broker to place a portion for eg competitiveness

Question 5

Signing down

Answer 5

Reducing share of risk to 100% (eg diff between written lines to signed lines)

Question 6

What stops signing down

Answer 6

Line to stand

Question 7

Equation for calculating signing down

Answer 7

Total % Written Line to fill / Total % Written Line Indicated x Amount looking for

Question 8

Natural termination - by the Insured

Answer 8

Consumer insureds have 14 day cooling off period to cancel. Commercial do not have the same.

Question 9

Short rate premium provision

Answer 9

Used to calculate % of premium payable depending on days policy was in effect pre-cancellation

Question 10

Natural termination - by the Insurer

Answer 10

Marine hull - if vessel sold as ownership of vessel is a key risk factor

Question 11

Notice of cancellation

Answer 11

Delivered and evidence obtained by recorded delivery

If broker - usually goes through them

Question 12

Natural termination - Fulfilment

Answer 12

Total loss and policy pays out

Question 13

Claims after expiry

Answer 13

Valid claims still valid post-expiry