S6 #1
This regulation stipulates that all cars being driven on public roads are required to have insurance
What is "The Insurance Act?"
This type of rating is used for complex classes of insurance such as commercial or personal risk that require considerations.
What is "Manual Rating"?
In rating, these are additional charges for features considered more hazardous.
What are "Loadings"?
How many questions are there on an auto insurance application form, and how many of them are mandatory?
There are 27 Items on the application form:
- Items 1-13 are mandatory
- Items 14-27 are supplemental information
This is incorrect or missing information about a material fact that is offered or not by an applicant or insured with or without the intent to mislead.
What is "Misrepresentation"?
This is the only form approved for use in underwriting automobile insurance for the standard automobile policy (owner’s policy SPF 1).
What is the "SAF 1"? (Standard Application Form)
This contains the information needed to underwrite, rate and issue a policy.
What is an "Application Form"?
In certain provinces, UW is influenced by the mandate to provide insurance to “all persons” and so one of the usual functions of underwriting of declining risks, is illegal.
What are Government Automobile Insurers (SK, BC, MB)?
This involves scrutinizing a risk and then deciding on its eligibility for insurance.
What is "Underwriting"?
Describe risk.
Risk is the chance of loss.
- It is the possible loss or destruction of property, or the possibility of a liability exposure.
- AKA: the subject of an insurance contract.
This is the sum of values insured under a policy - the total amount the insurer could become liable for under a policy.
What is "Exposure"?
Management establishes a marketing philosophy that will produce a profit, including creating underwriting and rate manuals and systems of operation to attract and classify profitable business.
What is "head office underwriting"?
Why might a risk be rejected?
A risk could be rejected based on:
- the class of business (the insurance company may not insure that class of business),
- the hazard level (more hazardous than average whereby the potential for loss is almost certain) or
- if a substandard risk is presented (the potential for improving or upgrading it exists, but the applicant is not prepared to carry out suggested improvements).
- The risk could be well-managed but the claims frequency and severity for the last one or two years may have placed it in an unfavourable underwriting rating position.
The decision to underwrite a policy is based on what factors?
The decision is ultimately based on the moral (personal info) + physical hazards and exposures + any other factors pertaining to the risk or type of insurance.
BONUS: What is the perfect name for an insurance salesman?
Justin Case.