The Underwriting Process– Who, How, and Why?
TABLE OF CONTENTS
|
SECTION 1: THE UNDERWRITER |
4 |
|
WHAT IS AN UNDERWRITER? |
7 |
|
WHAT IS THE PURPOSE OF UNDERWRITING? |
12 |
|
PHYSICAL HAZARD |
13 |
|
MORAL HAZARD |
14 |
|
WHAT TYPES OF DECISIONS DOES AN UNDERWRITER MAKE? |
16 |
|
ISSUING A POLICY WITH HIGHER PREMIUMS |
17 |
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ISSUING A POLICY WITH LIMITED POLICY BENEFITS |
17 |
|
ISSUING A POLICY WITH CERTAIN EXCLUSIONS |
17 |
|
ISSUING A POLICY THAT IS EQUITABLE |
18 |
|
ISSUING A POLICY THAT IS DELIVERABLE |
18 |
|
ISSUING A POLICY THAT IS PROFITABLE |
19 |
|
WHAT KIND OF UNDERWRITING BEHAVIORS ARE VITAL FOR UNDERWRITERS? |
20 |
|
SECTION REVIEW |
24 |
|
SECTION 2: THE UNDERWRITING PROCESS– WHAT IS INVOLVED? |
25 |
|
THE INSURANCE APPLICATION: GATHERING PERTINENT INFORMATION |
25 |
|
THE RATING SYSTEM: DETERMINING RISK CLASSIFICATION |
34 |
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THE UNDERWRITING MANUAL: EVALUATING AND RATING RISKS |
35 |
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THE UNDERWRITING PROCESS: PRELIMINARY PROCESSING |
41 |
|
INSURABLE INTEREST |
42 |
|
VALID CONTRACT |
43 |
|
INSURABLE RISK |
44 |
|
THE UNDERWRITING PROCESS: EVALUATING THE INFORMATION AND MAKING A DECISION |
46 |
|
EVALUATING LOSS EXPOSURES |
46 |
|
DETERMINING UNDERWRITING DECISION |
47 |
|
SELECTING AN UNDERWRITING DECISION |
47 |
|
IDENTIFYING THE APPROPRIATE PREMIUM |
48 |
|
IMPLEMENTING THE UNDERWRITING DECISION |
48 |
|
MONITORING THE INSURED |
48 |
|
ADDITIONAL FACTORS TO KEEP IN MIND: WHEN REVIEWING THE APPLICATION |
49 |
|
ADDITIONAL FACTORS TO KEEP IN MIND: CASE APPROVAL AUTHORITY |
51 |
|
ADDITIONAL FACTORS TO KEEP IN MIND: UTILIZING UNDERWRITING SOFTWARE |
53 |
|
SECTION REVIEW |
57 |
|
SECTION 3: MAINTAINING PROFITABILITY AND SOLVING PROBLEMS |
58 |
|
UNDERWRITING AND THE UNDERWRITING CYCLE |
59 |
|
PROBABILITY AND INSURANCE |
61 |
|
EVENTS |
61 |
|
PROBABILITY SCALE |
61 |
|
COMPOUND EVENTS |
62 |
|
COMPOUND PROBABILITY |
62 |
|
RATEMAKING AND UNDERWRITERS |
64 |
|
REINSURANCE AND PROFITABILITY |
68 |
|
LARGE-LINE CAPACITY |
70 |
|
CATASTROPHE PROTECTION |
70 |
|
STABILIZATION |
71 |
|
WITHDRAWAL |
71 |
|
UNDERWRITING ADVICE AND GUIDANCE |
72 |
|
SECTION REVIEW |
73 |
|
SECTION 4: HOW LEGISLATION AFFECTS UNDERWRITING |
75 |
|
ANTI-DISCRIMINATION STATUTES |
76 |
|
DISCRIMINATION BASED ON SEX |
77 |
|
DISCRIMINATION BASED ON PHYSICAL OR MENTAL IMPAIRMENTS |
77 |
|
DISCRIMINATION BASED ON GENETIC CHARACTERISTICS AND INFORMATION |
80 |
|
DISCRIMINATION BASED ON MARITAL STATUS |
86 |
|
DISCRIMINATION BASED ON SEXUAL PREFERENCE |
86 |
|
PERSONAL INFORMATION AND PRIVACY LAWS |
87 |
|
THE FAIR CREDIT REPORTING ACT (1971) |
88 |
|
THE PRIVACY ACT (1974) |
90 |
|
THE GRAMM-LEACH-BLILEY ACT (1999) |
98 |
|
SECTION REVIEW |
102 |
|
COURSE REVIEW |
104 |
|
SECTION 1: THE UNDERWRITER |
104 |
|
SECTION 2: THE UNDERWRITING PROCESS– WHAT IS INVOLVED? |
107 |
|
SECTION 3: MAINTAINING PROFITABILITY AND SOLVING PROBLEMS |
109 |
|
SECTION 4: HOW LEGISLATION AFFECTS UNDERWRITING |
111 |
|
REFERENCES |
113 |
United Insurance Educators, Inc.