CHAPTER 6 - C Flashcards
What are the key roles of a broker in the placing process?
The broker’s key roles include:
* Reviewing the client’s needs
* Putting together a Market Reform Contract (MRC) to obtain quotes
* Reviewing quotes with the client
* Finalising the placement
* Compiling documentation for submission to Velonetic
* Requesting premium from their client
* Submitting documentation to Velonetic
What is the first step a broker must take in the placing process?
Reviewing the client’s needs
What is the purpose of the Market Reform Contract (MRC)?
The MRC is the main document used to submit information to insurers to obtain quotes.
What additional information might insurers require alongside the MRC?
Insurers may require supplementary information such as surveys and loss records.
What does a broker do after receiving quotes from insurers?
The broker reviews the quotes with the client and advises on differences.
What is the significance of ‘signing down’ issues in the placement process?
Signing down issues occur when the written lines total more than 100%; the broker must calculate to bring it back to 100%.
True or False: The written line is always equal to the signed line.
False
What must a broker compile for submission to Velonetic?
The broker must compile the MRC and the London Premium Advice Note (LPAN).
What does the London Premium Advice Note (LPAN) include?
The LPAN sets out the premium information.
Fill in the blank: The broker needs to relay the insurers’ payment requirements to their client to ensure that they remit funds to the broker in _______.
good time
What system is used for electronic submissions to Velonetic?
Accounting and Settlement
What does the Signing Number and Date represent in the Velonetic system?
A unique reference which relates to that risk and allows for easy identification.
What happens if the premium is not paid in accordance with insurers’ requirements?
The insurance may be cancelled by the insurers for non-payment of premium.
What is a broker’s responsibility regarding tax for overseas clients?
The broker must know whether tax should be collected by the overseas broker or paid directly in the country concerned.
What does the broker need to ensure before approaching insurers for quotes?
The broker needs to ensure they have all relevant and material information from their client.
What is the broker’s role in communicating with insurers after the client selects a quote?
The broker must confirm (or accept) the lines with the insurers.
What types of businesses might require proposal forms in addition to the MRC?
Particularly yacht insurance and professional/financial risks.
What should a broker do if there are changes to the risk?
The broker should take their client’s instructions and promptly advise insurers accordingly.
This includes creating endorsement paperwork or electronic endorsements.
What is the purpose of endorsement paperwork or electronic endorsements?
To obtain agreement from insurers to changes made to the risk.
Endorsements are formal modifications to an insurance policy.
Who should the broker visit or send endorsement paperwork to?
The lead insurer, a set combination of insurers, or all insurers on risk, as required.
This ensures that all parties involved are informed and in agreement.
True or False: A broker can ignore client instructions when changes to the risk occur.
False
Brokers must always follow client instructions when advising insurers.
Fill in the blank: The broker must create _______ to advise insurers of changes to the risk.
[endorsement paperwork or electronic endorsements].
What is the broker’s first role in the claims process?
The first notification of a loss is made by the insured to their broker, who assists in putting together necessary information for presentation to the insurers.
How does the broker facilitate expert instructions during a claim?
The broker often communicates the instruction to experts, although insurers may also issue instructions directly for advice on claim coverage.
What is the broker’s responsibility regarding experts’ fees?
Experts’ fees can be collected by the broker, but many choose not to provide this service, leaving it to experts or fee collection agencies.
What updates does the broker provide during the claims process?
The broker provides further updates from their client and any experts to the insurers and receives comments from the insurers.
What role does the broker play in negotiating claims?
The broker negotiates on behalf of their client when claims are not straightforward and explains the insurers’ positions when necessary.
How has the claims process in the London Market changed over time?
The processes have become increasingly electronic, facilitating claims presentation but not relieving the broker of their negotiation role.
What is the broker’s role in the settlement of claims?
The broker receives claims funds from insurers and forwards them to the insured or other designated destinations in a timely manner.
What is subrogation in the context of insurance claims?
Subrogation is the right of insurers to recover amounts from third parties after indemnifying the insured, exercised in the name of the insured.
Fill in the blank: The broker should ensure that their client appreciates the need to cooperate with insurers regarding _______.
[subrogation]
True or False: The broker’s role in a claim concludes once the claim is presented to insurers.
False
What assistance can brokers provide regarding uninsured losses?
Brokers can inform insurers of additional amounts related to uninsured losses that might be included in claims against third parties.
