Chap 1-4 Flashcards
Who within the Lloyd’s Market is responsible for meeting the Lloyd’s Principles for doing good business
Managing Agents
Who provides the capital that enables Lloyd’s to write insurance?
Its members
What is Errors and Omissions Insurance also known as?
Professional Indemnity OR Professional Negligence Insurance
In Marine insurance, what is the principle of General Average?
A contribution paid to someone for making a sacrifice to save everyone else’s property
What type of insurance will have a ‘maintenance period’?
Construction - post handover/completion date
What class of insurance will have a ‘waiting period’?
Business Interruption- i.e. if the policy period has a waiting period of 14 days and your business is back up and running in 7 days, you have no claim.
- the insurer will also set out a max payout time in days/months
- also requires some physical loss/damage to insured’s property
What is a ‘losses occurring’ policy?
Most property/first party policies - triggered by losses that happen during the policy period
What is a ‘claims made’ policy?
Generally liabs/3rd party policy - triggered by claims being made on the insured, which may be some time after the alleged incident occurred.
The policy that is triggered is the one in force when the claim is made, not the one in force when the alleged wrongdoing took place.
i.e. D&O
Why buy reinsurance?
- risk transfer
- peace of mind
- balancing peaks & troughs
- releasing capacity
Why sell reinsurance?
- Accessing business not otherwise accessible
- Access new classes of business
- Business preference
REINSURANCE: Full Follow Clause
Insurer makes all claims decisions - doesn’t even have to tell reinsurer a claim in process
REINSURANCE: Claims Co-Operation Clause
[MIDDLE GROUND] Insurer has to advise reinsurer of loss + handling of claim
Reinsurer doesn’t necessarily have any rights to interfere w/ decision making
REINSURANCE: Claims Control Clause
Full decision-making control to reinsurer
What is Facultative Obligatory Reinsurance?
For all risks that fall within a pre-agreed set of criteria, the insurer has the choice to cede individual risk to reinsurer.
Reinsurer HAS to accept it (obligatory)
What is Excess of Loss Reinsurance?
NON-PROPORTIONAL (prem/claims not shared in equal proportions)
coverage bought in layers of ANY size to build reinsurance programme, e.g. 1m retained + 2m xs 1m + 1m xs 3m = 4m XL reinsurance.
Can be purchased as fac, but more often as contracts/portfolio