M81 - Chapter 6 Insurers

Question 1

3 Reasons why a broker may work with an Insurer

Answer 1

1. Commissions paid
2. Trading efficiency
3. Breadth of cover

Question 2

What 2 Guidance’s may an insurer work under ,

Answer 2

Classified - It has unrestricted to write business in its class.

Classified with restrictions - Geography, Sanctions, subject to disclosures to the client regarding the insurers status (like we do with unrated) or under express instruction from the client.

Question 3

What 3 ways does Lloyds Trade?

Answer 3

Face to Face

Via Delegated Authorities

Via outside companies set up by Syndicates

Question 4

3 Reasons to use an MGA

Answer 4

Specialist Expertise

Grow books without the need for expensive set costs for the Insurers

Access to markets that may have been too expensive

Question 5

2 Types of broker networks

Answer 5

Formal alliances between brokers

Commercial Entities set up to allow smaller brokers to join and compete with larger brokers (Broker Network)

Question 6

4 Factors that may ALSO lead a broker to recommend an insurer

Answer 6

Brokerage

Reputation

Sales literature

Credit facilities

Question 7

As of 31st December 2020, passporting writes have been removed from the UK as part of Brexit - What has replaced it?

Answer 7

Temporary permissions regime (TPR)

Question 8

3 Steps to complete and document a ‘fair analyses’

Answer 8

Define the list based on available classified insurers

Refine the list based on clients demands and needs, create shortlist.

Refine further to at least 5 recommendations based on your specialist knowledge as a broker, where the list is less than 5, all should be approached for terms.