Underwriting and controls

The managing agent has effective systems and controls over each managed syndicate's underwriting.

Principle

The managing agent has effective systems and controls over each managed syndicate's underwriting.

Minimum standards

The managing agent's board should ensure that there are effective underwriting systems and controls in place.

See below for guidance on effective systems and controls.

Effective systems and controls have the following features:

They ensure that underwriting takes into account:

  • The syndicate's annual business plan and underwriting policy
  • The underwriter's terms of reference and authorities pricing policy
  • Exposure management information
  • The syndicate's reinsurance arrangements
  • Requirements to achieve Pre-Bind Quality Assurance (PBQA), including Contract Certainty.
  • External regulatory requirements
     

They ensure that the managing agent keeps (or has the right to access) all relevant information in respect of each risk underwritten by the syndicate including the slip and the placing documentation.

They ensure that a representative range of risks underwritten by the syndicate is reviewed and assessed regularly by an appropriately qualified individual who is independent of the underwriter of those risks.

They ensure that underwriting decisions are the subject of an appropriate peer review process.

They require the referral of risks or underwriting decisions which are outside an underwriter's agreed levels of authority.

 

See also

Independent and peer review 

“See the report on market independent and peer review activities”