When deciding on the markets to be used it is important that the BIPAR principles are observed.
This does not allow premiums to be increased for all Insurers in order to complete an order. Only the Insurers who require any extra premium can be paid the increased premium for their share of the risk. Insurers who have already agreed to write a risk at a lower premium must be made to honour their commitment for their share of the risk. It may be necessary to have more than one Slip for the same risk but with different premiums. Policy terms & conditions should be the same for all Insurers unless it is clear what the differences are and the Client acknowledges having been given informed advice of the possible consequences (e.g. not 100% cover for the costs incurred defending a claim).
Care needs to be taken to ensure that the communication of information which occurs during the subscription process and the procedures for completing the Slip do not fall foul of competition law. Underwriters should independently decide whether or not to participate in the insurance of individual risks presented to them by brokers and whether or not the proposed structure of underwriting is acceptable.
In terms of the latter, the following text where applicable should be included on quote documents:
Method of placement – BIPAR
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