Chapter 9 - Delegated Underwriting Flashcards
Who can underwriting authority be delegated to?
- another or consortium of insurers
- broker
- another entity all together
What is a consortium?
A group of insurers who have formed an agreement to accept risks together in a set proportion
How long is a consortium set up for?
A year
What are the benefits of a consortium?
- placing process quicker and more efficient for broker
- consortium leader gets a commision for the trouble
- followers access to business without seeing broker
What is the difference between a line slip and a consortium?
Line slip is brought together by the broker
What are the benefits of a line slip / facility?
- efficient for broker when placing risks that fall withi criteria
- insurers gain access to business without having to agree the risks individually
What is a declaration?
individual risk presented for agreement by broker so it can be attached to the line slip
Why would an insurer delegate underwriting?
- manpower
- local access
- other access
What is the term for a delegated underwriting partnet?
coverholder
How much of Lloyd’s business do coverholders write?
30 - 35%
How do Lloyd’s assess potential coverholders?
- suitability and experience of those working for applicant
- systems and controls in applicant’s infrastructure
- financial status of the applicant
- authority of applicant to operate in specified territories
What system is used for application to be a coverholder?
Atlas
What does a coverholder applicant need to indicate?
- type of work they are applying to be involved with
- areas of the world they operate from and from which they will be accepting risks
What are the two types of coverholder?
- approved coverholder
- service company
What is a service company?
Set up by a managing agent with authority to write insurance under a binding authority from a syndicate