Chapter 5: Functions with insurance organisations Flashcards
What is the role of the underwriting department in an insurance company?
The essential role of the underwriting department in an insurance organisation is to calculate the premiums to be charged for the risks to be insured and to create and control the extent of cover given under the policy.
What is the pure risk premium?
The pure risk premium is the premium necessary to pay for losses and loss-related expenses only. It excludes other expenses such as sales and marketing.
What is a risk register?
A risk register is a centralised data source on all risks that a company is known to face and is kept up to date by the risk management department.
What is the role of the claims department?
The role of the claims department is to ensure that when claims are made the policyholders receives a fair and equitable settlement for their loss, in accordance with the contractual obligations of the insurance policy.
What is a claims notification?
This is when the customer reports the claim to the insurance company in the prescribed format. It is essential that the customer provides enough detail about the claim to enable the insurance company to consider the cause of the loss, the nature and extent of damage and determine the potential value of the claim.
What is delegated authority?
Delegated authority is when an insurer permits another party to act on their behalf, either in an underwriting or claims capacity.
A party to whom authority has been delegated is known as?
The cover holder
What is binding authority?
Binding authority is an agreement set up between parties that sets out the scope and extent of authority delegated to a cover holder.
What is the role of the compliance department?
A key role of the compliance department is to ensure, as far as possible, that the operations
of the firm are compliant with regulatory requirements.
What is a CAT model?
A CAT model is a computerised process that simulates potential catastrophic events and estimates the amount of loss due to the events.
What are the three elements of customer service?
- Pre-transactional. – customer service mission statement, staff training, complaints handling processes and preparation of warranties.
- Transactional. – managing customer service demand patterns, timing and monitoring levels of customer service delivery.
- Post-transactional. – claims handling service, handling complaints and cross-selling.
What is a white-label insurance?
White label insurance is insurance that a particular company offers other companies who then market and sell it under their brand.
