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.
View 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
View guidance on features of effective underwriting systems and controls
View guidance on Pre-Bind Quality Assurance.
View guidance on Competition Law and the European Commission business insurance sector inquiry.
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.
View guidance on retention of information and testing of underwriting controls.
They ensure that underwriting decisions are the subject of an appropriate peer review process.
View guidance on an appropriate peer review process.
They require the referral of risks or underwriting decisions which are outside an underwriter's agreed levels of authority.
View additional notes on underwriting and controls.
