Chapter 13 - Automobile Insurance C14

Terms	Definitions
What are the THREE (3) functions of underwriting?	i. consideration of the acceptance or rejection of a risk. ii. if the risk is accepted, the terms of the policy iii. premium for the policy.
Where is underwriting carried out?	normally carried out at the head office.
What are some of the different marketing philosophies among insurers?	broad range of auto insurance business - rely on underwriting and rating to earn profit niche writers - selected classes of expertise
What information does an automobile underwriting manual contain?	- acceptance or rejection list - "senior underwriter only" acceptance list - limit table (max liability limits which can be accepted) - classification guide - other instructional material
What are limit tables?	it is the liability coverage limits of the business. this is based on the insurer's reinsurance treaties and extent of exposure of own net account.
How and by whom are limit tables used?	limited tables are used by underwriters to determine the amount of risk an insurer keeps for own account. it restricts different classes.
What are "intelligent underwriting" computer programs?	They are computer programs that handle risk selection process by point allocation or by "flagging" the underwriter on the computer screen.
What are the functions of an automobile underwriter?	classifying risks, rating drivers according to driving records, placing risks in the correct rate groups, using endorsements correctly.
What tools are available to assist underwriters?	claims history systems, driving records, "flagging" systems used to assess risks for renewal, codes from claims handlers.
What TWO (2) general classes of endorsements are available?	extensions - used for additional coverages agreements or restrictions - limitation of amount or value endorsements
To whom are underwriters responsible?	responsible for the insurer's image and duty to insurance buying public and employers to avoid mistakes.
Identify sensitive areas that can affect an insurer's image to the public or result in penalties from industry regulators.	- policy cancellation for underwriting reasons, insurer's refusal to renew, premium surcharges, premiums appropriate for risk, lowest applicable rate, improper use of credit information.
How is underwriting carried out in provinces that have government automobile insurance plans? And by whom?	they are carried out by a government body responsible for auto insurance and private insurers.
How does underwriting differ between government insurers and the private sector insurers?	they cannot deny basic coverages and main underwriting function is to determine correct rate group.
How does underwriting differ between private sector insurers in provinces that have government automobile insurance plans and those in provinces where only the private sector provides the insurance?	Private companies in government insurer provinces are confined to requirements regarding accident-free status and driving experience. mostly provide coverage for private passenger vehicles and recreational vehicles.