Chapter 9: Delegated Underwriting Flashcards
Who can delegate their business activities?
Insurers can, and so can brokers, for things like document production
Who can an insurer delegate underwriting authority to?
Another insurer, a broker, or another entity all together
How can an insurer in the London market delehate underwriting authority?
Through a consortium or a lineslip
What is a consortium?
A group of insurers which have formed an agreement to accept risks together in a set proportion
How are consortiums run?
They have a leader, they are set up for a year like a syndicate, and have a stamp. Sometimes they have comissions for leaders.
Who in a consortium is responsible for handling claims?
The leader
Define ‘lineslip’
A set of insurers brought together by a broker
Define ‘declaration’
The individual risk that is being presented for agreement, so that it can be attached to the lineslip
Define ‘bulking lineslip’
The broker can aggregrate premium for the risks in Velonetic
Define ‘facility’
Another term for lineslip
Define ‘binding authority’
Delegating underwriting authority to a broker or another authority altogether
Which binding authority agreements need to be registered in lloyds?
All of them apart from restricted authority agreements
What are three reasons for an insurer delegating underwriting authority?
Manpower, local access, and accessing business that does not come into the London Market
Define ‘coverholder’
The partner for a delegated underwriting agreement
How much of lloyd’s premium income do coverholders represent?
30-35%
Define ‘conflict of interest’
Trying to serve two people who have two different interests
Define ‘coverholder undertaking’
A formal document which outlines teh stamdards Lloyds expects of its coverholders
Define ‘approved coverholder’
A coverholder in Lloyds who has been approved
Who supports the application for a new coverholder?
A broker and a managing agent
Define ‘service company’
A company set up by a managing agent as a separate comapny- which gains its authority from Lloyds. Normally a sister company in the group
What are the different types of authority that can be given to coverholders?
Full authority, pre-determined artes, pre-determined rates with no disrection, prior submit
What three parts form part of the binding authority documentation?
Binding authority schedule, binding authority wording, and non-schedule sections
What is the first principle of doing business at LLoyds?
Underwriting profitability- there is a clear appetite for delegated authority, controls are in place, and this aligns with the main business plan
WHat is the fourth principle of doing business in lloyds?
It is clearly articulated how claims are outsourced
