Retention of all relevant information
Each managing agent is expected to be able to produce all relevant information regarding each risk written to satisfy audit purposes and to allow the proactive review and management of each risk. Relevant information would include slips and placing information, as well as the rationale for risk acceptance, terms and pricing.
Testing of underwriting controls
Managing agents are expected to test that underwriting controls are working effectively and to produce written reports to demonstrate this at least quarterly, with any variances or control failures highlighted and addressed. The findings from control testing should be shared with relevant underwriting teams and actions relating to variances agreed. It is expected that the findings would also be shared with the managing agent's board. (Testing should ideally include consideration of reinsurance programmes, systems for modelling risks and aggregating exposures and the records supporting pricing).
These reports will normally be built up from the writing of each risk, to enable detailed analysis of identified issues.
Where underwriting authority is delegated and aggregated returns are received by the managing agent it is expected that data at individual risk level will be available to the managing agent to ensure that underwriting controls are working effectively.
