Chapter 9 - Delegated Underwriting Flashcards

1
Q

Who can underwriting authority be delegated to?

A
  • another or consortium of insurers
  • broker
  • another entity all together
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What is a consortium?

A

A group of insurers who have formed an agreement to accept risks together in a set proportion

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

How long is a consortium set up for?

A

A year

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What are the benefits of a consortium?

A
  • placing process quicker and more efficient for broker
  • consortium leader gets a commision for the trouble
  • followers access to business without seeing broker
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is the difference between a line slip and a consortium?

A

Line slip is brought together by the broker

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What are the benefits of a line slip / facility?

A
  • efficient for broker when placing risks that fall withi criteria
  • insurers gain access to business without having to agree the risks individually
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is a declaration?

A

individual risk presented for agreement by broker so it can be attached to the line slip

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Why would an insurer delegate underwriting?

A
  • manpower
  • local access
  • other access
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What is the term for a delegated underwriting partnet?

A

coverholder

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

How much of Lloyd’s business do coverholders write?

A

30 - 35%

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

How do Lloyd’s assess potential coverholders?

A
  • 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
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What system is used for application to be a coverholder?

A

Atlas

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What does a coverholder applicant need to indicate?

A
  • 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

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What are the two types of coverholder?

A
  • approved coverholder

- service company

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is a service company?

A

Set up by a managing agent with authority to write insurance under a binding authority from a syndicate

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What are the types of authority for coverholders?

A
  • full authority: complete control
  • pre-determined rates: where possible price-matching or discretion allowed for renewal business
  • pre-determined with no discretion
  • prior-submit: all risks referred to underwriter prior to binding
17
Q

What do binding authority agreement documents consist of?

A
  • binding authority schedule
  • binding authoirty wording
  • non-schedule sections
18
Q

What are the six sections of the minimmum standards?

A
  • culture, strategy, and fair treatment of customers
  • setting standards and reviewing performance
  • claims preserving
  • product and assessment review
  • customer experience
  • outsourcing
19
Q

What are the key points of the minimum standard realting to management of delegated underwriting?

A
  • managing agent has clear strategy for writing and managing delegated underwriting as part of overall business plan
  • thorough due diligence of coverholders
  • binding authorities in place with each coverholder
  • proactive management of delegated underwriting contracts to make sure complianance with contract conditions
20
Q

What should an audit policy state?

A
  • frequency of audits
  • scope of review in the audit
  • details of the auditors
21
Q

What are areas that would be examined by an audit of delegated underwriting?

A
  • underwriting
  • accounting
  • financial reporting
  • credit control
  • IT systems
  • documentation controls
  • compliance with Lloyd’s regulations