Chapter 8: Business Process Flashcards
Define ‘quotation’
A proposal or indication from the insurer as to the terms and conditions they would suggest for the risk
What is the ‘order’?
The share of a risk a broker will place
At what point are insurers on risk?
When the underwriter puts their line down on the broker’s slip, teh contract is committed. They are on risk when the policy incepts
Define ‘signing down’
The process in which shares of arisk are reduced to 100%
What happens if an underwriter says they want their line to stand?
If the written lines add up to more than 100%, they can keep their line as originally written and others will stand down around them
What are reasons for the natural termination of an insurance contract?
Cancellation by thr insured, cancellation by the insurer, fulfilment, or expiry of the policy period
What are reasons for the unexpected termination of an insurance contract?
Breach under the duty of fair presentation, breach of warranty, fraud
What are the FCA rules on renewal transparency for personal insurances?
Companies must state the cost of last year’s premium, they should include text to encourage consumers to shop around, and send an additional message to consumers who have renewed with them 4 consecutive times
When do days of grace exist?
Only if explicitly stated in the policy
What is WNKORL?
Warranted no known or reported losses
Define ‘proposal form’
Used by the broker to present the risk to the insurer, however, they are not common in the London Market outside of lines like yacht insurance and professional indemnity
Define ‘endorsement’
A document on which brokers present the changes in policy to the underwriters
Define ‘general underwriters agreement’
Creates an agreement between all underwriters on a particular risk regarding how to deal with contract changes, clarifies authority and grants flexibility
What are the three different groups of insurers that can confirm something in GUA?
Part 1- slip leader only
Part 2- slip leader plus agreement parties
Part 3- all underwriters
When is the GUA stamp used?
When there is an endorsement
What is LPAN
A London Premium Advice Note
Define ‘condition precedent’
A condition that must be satisfied for the contract to exist or to have liability under the contract
Define ‘exclusion’
A risk an insurer will not cover under a particular policy
Define ‘warranty’
Promises made by the insured relating either to facts or to performance concerning the risk- something will or will not be done. or a fact does or does not exist
Under Insurance Act 2015, what happens of there is a breach of warranty?
The policy is suspended until the breach is remedied, when the suspension lifts automatically
Define ‘service company’
Companies who can underwrite business on behalf of the syndicate
What is Lloyds Insurance Company SA?
Lloyds Brussels
Define ‘delegated underwriting’
Granting someone permission to underwrite on your behalf
Define ‘contract certainty’
Achieved by the complete and final agreement of all terms between the insured and the insurer, at the time that they enter into the contract, with contract docs provided promptly therafter
