When PSC loses or gains business to/from another broker and there is a transfer of documents (such as slips, policies, claims files, underwriting information) it is important that Very Senior Personnel (as applicable to your business) or the Head of Compliance reviews the broker of record letter and signs the transfer letter if applicable before any such information is passed to the other broker/received by PSC. The letter must state the effective date of the transfer and clearly specify what documents are being transferred. It is sensible to check that the previous broker is up to date with all items such as payment of premium to Insurers, issuance of policies and so on.
Also, it is important to be prudent when taking on new business at this stage. The general approach is that the new broker takes full responsibility for all aspects in terms of servicing the risk, including claims. It is essential that the individual involved in acquiring the new business steps back and determines whether it makes sense to take on the risk, in consideration of not just the commission earned, but also the time and effort that will be expended on the risk. For example, a risk may have a disproportionate amount of claims attached to it.
Furthermore, it is also important that the individual involved in acquiring the new business understands how and with whom the risk is placed at that time. The incumbent market may not meet PSC’s criteria and risks bound on certain facilities, such as a Binder, present other issues. It is also important that the individual ensures that he/she only accepts business where the line(s) of business covering the risk(s) are authorised in Appendix 2.
Before being asked to sign a transfer letter, the said signature will expect that a review of this nature will have been carried out.
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