Details the underwriting practices of an insurance company and provide specific guidance as to how underwriters should analyze all of the various types of applicants they might encounter. Also, called an underwriting manual, underwriting guidelines, or manual of underwriting policy.
Insurance Encyclopedia
Underwriting impairments
Factors that may increase an individual’s risk greater than that which is normal for his or her age.
Underwriting income
The insurer’s profit on the insurance sale after all expenses and losses have been paid. When premiums aren’t sufficient to cover claims and expenses, the result is an underwriting loss.
Underwriting loss
After health insurance premium income, the deficiency that remains after payment of insurance claims and administrative expenses.
Underwriting manual
Procedure and policy book that summarizes methods used by a specific insurance company to evaluate and rate risks. Underwriters use this as a reference book to research background information on underwriting impairments. It gives suggestions for underwriting actions to take when various impairments are present.
Underwriting member (of Lloyd’s)
an individual who assumes risks in the Lloyd’s market; underwriting members, or names, are grouped in syndicates; they may not accept business except through underwriting agents or active underwriters.
Underwriting or Working or Per Risk Covers
To provide protection in the event of loss caused to one risk or loss arising from one event as the case may be. In contrast to Catastrophe or per event covers.
Underwriting Policy (IRDA)
As per IRDA guidelines it is essential for every general insurance company in India to file with IRDA its underwriting policy duly approved by the whole Board of Directors. The underwriting policy shall cover the underwriting philosophy in the matter of underwriting profit expectation and whether ach product shall stand on its own or be cross-subsidized among products sold to one client – it is important that even though a client’s total portfolio may be profitable overall on gross basis, the position on net of reinsurance basis can be a loss because different percentages are reinsured in different classes of business. If the insurer want to write any business on a planned underwriting loss basis how the Board will control the effect of the same on solvency margin. Product design, rating, terms and conditions of cover and underwriting activity shall be consistent with the approved underwriting policy. The company has to designate two senior executives who are not directly one above the other in the line of authority to approve the decision. Responsibility for overall compliance vests with the Chief Executive Officer.
Underwriting policy clause
Obliges a reinsured to consult with, or seek approval from, the reinsurer when proposing to make material changes to established acceptance and underwriting practices.
Underwriting profit
Insurance company’s income from its operations as distinct from its investment earnings.
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The measure of the profitability of an insurer’s underwriting activity. This refers to earned premiums (net of reinsurance) with net operating expenses and claims incurred (net of reinsurance) subtracted. The underwriting profit does not include any investment income.