It is expected that managing agents would have written procedures, agreed at board level, for managing delegated underwriting contracts. These procedures should be applied consistently to all syndicates managed by the managing agent and regularly reviewed and updated.
The competencies needed for managing delegated underwriting arrangements are different to those needed for other methods of acceptance. Managing agents will need to satisfy themselves that they have the controls and resources (both systems and individuals with suitable experience and skills) to enter into and manage delegated underwriting arrangements effectively, taking into account:
- The number of coverholders
- The number of contracts which a syndicate leads or follows
- The extent of delegation
- The volume of income
- The classes of business
- The level of exposure (eg catastrophe exposure)
- The geographical distribution
