Chapter 9 - Underwriters Flashcards

1
Q

Role of the underwriter

A

Make decision on behalf of insurer whether to accept risk

& determines t&cs when acceptance made.

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

What is a ‘scratch’?

A

Initials & date

Confirming underwriter has seen the presentation made.

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

In a Lloyd’s syndicate who are underwriters employed by?

A

Managing agent

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

Functions of an underwriter

A

Manage pool of premiums as effectively and profitably as possible.

  • assess risk
  • decide to accept risk
  • determine t&cs
  • calculate premium
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is placing a risk on a ‘subscription basis’?

A

More than one insurer participating in a risk.

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

Why might an UW only take a proportion of a risk?

A
  • Size of risk & authority levels
  • Balancing portfolio
  • Insurance broker input
  • New class of business
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Leading UW roles

A
  • Review the risk presentation from the broker
  • Consider whether to accept
  • Decide t&cs
  • quote premium
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Following market underwriters

A

Support the leading underwriter and take a share of the risk - might request more premium before agreeing to support

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What does ‘competition law’ prohibit?

A

Behaviour where the normal competitive nature of the insurance market is removed. Prevents markets acting together to detriment of client

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

BIPAR (European Federation of Insurance Intermediaries) 5 high level principles

A
  1. Intermediary shall specify demands and needs of client
  2. Before placing risk, intermediary will review and advise client on market structures to meet its needs
  3. If client places risk, intermediary will review, explain relative merits and advise on options
  4. After placing risk previously agreed premium of lead and following insurers will not be aligned upwards
  5. Intermediary keep client informed of progress
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Three different types of leader

A

Overall Leader
Slip Leader
Bureau Leader

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

General Underwriter Agreement (GUA) divides post bind changes into 3 categories

A
  1. Non-material. Agreed leader only.
  2. Anything not in 1 or 2. Leader & some agreement parties
  3. Material changes. All underwriters.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What causes difficulties with electronic trading?

A

Multiple separate slips because of differences in t&cs - more parties have to be involved

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

Single Claims Agreement Party (SCAP) - Feb 2018

A

Allows subscribing insurers to agree at time of placing that claims will be agreed by a single insurer only. Slip leader. Must be Lloyd’s syndicate or UK auth insurer.

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

Ghost leaders

A

Suddenly involved in claims handling where they never intended to be. Created by existence of more than one slip, particularly with advent of electronic claims handling.

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