C9 Flashcards
How did the term underwriter originate
A merchant would place their name under the risk info presented to them. If they were happy to participate on a risk they would scratch it, which ment providing their initials and typically the date
What is the function of the underwriter
Assessing risks that will enter the common pool
Determine the terms and conditions to write the risk
Determine the premium that should be taken for that risk
What is a subscription market
Where risks can be placed with many different insurers each taking a portion of the risk
Why May am underwriter only opt to take a potion of the risk
- they don’t have authority to take on anymore risk
-a higher proportion would affect the balance of their portfolio
-new area of business so don’t want to take on a lot of the risk
How does the subscription market operate
The broker when placing a risk approaches one underwriter to begin with. If they are keen to operate they will be the leader as their scratch/stamp will be at the top of the slip
What does a leader do
Take into consideration all aspects of the risk and provide a good quotation.
They set the initial terms and conditions for a risk
What is the following market
It is a collaborative market where insurers that follow a leader need to trust the leaders judgment
It can consist of a number of insurers and are needed to place the residual part of the risk.
However each insurer that takes a share of the risk makes their own separate contract with the insured and is liable for their share of any loss
Overall lead
Can be outside the london market however if in the london market they are just called slip lead
What are post bind changes
Changes incorporated in a midterm basis
Normally requires an endorsement to the policy
Bureau lead
Where there is a mix between company and syndicates on a slip and if the first underwriter is a company then the first Lloyds syndicate on the risk will be the bureau lead
What is the GUA
General underwriters agreement
Helps streamline post bind changes
Part one changes - not material and will go to the agreed leader only
Part two changes - goes to leader and any relevant agreement parties
Part three - most significant and must be agreed by all underwriters on risk
What is SCAP
Single claims agreement part
Allows ensures on specific risks to nominate the slip leader to deal with any claims on their behalf
What is multiple placements
The General Underwriters Agreement (GUA) categorises changes into non-material, general, and material changes, each requiring different levels of agreement from underwriters.
What is a mutual market
In the Mutual Insurance sector, most risks are accepted 100% by one insurer, unlike the subscription market.
What is a smart follow underwriter
uses data and trackers to manage portfolios with lower operational costs compared to traditional setups.
Deductible
Amount of money a policy holder must pay before their insurance coverage kicks in
Higher deductible lower premium
BIPAR
Can followers charge more than leads
Yes
What must the broker present placements to Xchange for
Risk recording and premium transfer process
