The International Operating and Client Servicing Procedures are divided into the following sections:

Transcription

1 INTRODUCING BUSINESS Section : Introducing Business Page : 1 of 22 The WBN International Operating and Client Servicing manual has been prepared by and for the members of Worldwide Broker Network. It provides the networks guidelines to how broking services should be provided internationally to clients. The manual is not a rule book: it is a guideline which is flexible and can be adjusted to suit the brokers and client s specific needs and requirements. The International Operating and Client Servicing are divided into the following sections: I Network Structure - outlines the aims of the network, its structure and the roles and responsibilities of key network management functions. II Operational - outlines the procedures for implementing, coordinating and servicing business. III Templates - the standardised forms referred to elsewhere in the guidelines. All the templates are listed at WBN homepage under Member Information >Templates.

2 TABLE OF CONTENTS Section : Table of Contents Page : 2 of 22 I Network Structure What is WBN and what are the aims of the Network? WBN Committee structure The Owners Council The Executive Committee The Commercial & Employee Benefits Committees II Operational Introducing Business Guideline for uniform standards Roles & responsibilities Referred business Prospecting foreign subsidiaries Programme implementation Collecting information /maintaining records Risk & exposure analysis and policy assessment form Survey report Policy summary forms Global account review form Loss control Claims Accounts in jeopardy Income Sharing Standard income sharing procedures Appeals procedures, cases of hardship and arbitration Accounting & money transmission Delinquent accounts III Templates This section contains specimens of the standardised forms referred to elsewhere in the guidelines. All the following templates are listed at WBN homepage ( under Member Information >Templates.

3 NETWORK STRUCTURE Section : Network structure Page : 3 of 22 What is WBN and what are the aims of the Network? Worldwide Broker Network, (WBN), is the world s largest international grouping of independent brokers, risk management and employee benefit consultants operating on the basis of a cohesive and streamlined structure. Founded in 1989 to handle cross-frontier business, WBN has evolved into an integrated worldwide insurance services network of independent brokers, providing a broad range of services including property, liability, risk management and employee benefit plans to a diverse business community. Member firms epitomise the entrepreneurial spirit which stimulates the pursuit of excellence allied with the personal touch. WBN Committee Structure The Owners Council: The Council consists of the principals of the member firms and performs the overall management and administrative roles of WBN. The Council decide on the strategic direction of the network, membership and matters involving all of the members. The Owners Council sits twice a year. The Executive Committee WBN s Executive Committee acts as the networks Board of Directors. The Committee holds a monthly conference call and meets periodically in between owners meetings. This Committee undertakes the background work and prepares material for consideration by the Owners Council. Executive Committee members are appointed by the Owners Council; the Committee comprises the chairman and vice-chairman of WBN and six other WBN members. The Commercial & Employee Benefits Committees Members are the international experts of the member companies and they meet twice a year. The Committees discuss client services, operational guidelines, country/market information and new and existing client information

4 OPERATIONAL Page :4 of 22 Introducing Business Guidelines for uniform service standards - It is the responsibility of the introducing member to specify the service standards which are required when introducing a new account to the local member. Where the introducing member does not lay down standards, the following standards are deemed to apply. If it is not possible to meet the response times the local broker should inform the producing member and agree a revised response time. - Where new covers or whenever alterations to existing covers are required, the introducing member must give the local member adequate information to enable it to arrange the covers/alterations and allow a minimum of two working days in which to do so. In the case of difficult or complex cases extra notice must be given. Documents such as New Business Referral, Information on International Programmes can be found in the Templates section. - Correspondence must be acknowledged within one working day and wherever possible replied to within seven working days. - Written confirmation of new covers or alterations to existing covers must be issued to the local client and introducing member within two working days of the cover being arranged. - When tendering for new business it is essential that all members meet the deadline laid down by the introducing member who must ensure that the deadline set is reasonable. - Requests to local members for specific technical information should clearly define what is required and confirm the response time in working days within which the information should be provided. - Loss Control surveys should be carried out within 20 working days of the request from the introducing member or local client or earlier if requested and such a request is reasonable. - Policy documents to be issued to local client within seven working days of receipt. Introducing member should provide local member with details of global coverages on the introduction of a new account. Local member is to provide summaries of local coverage within ten working days of inception (see sample Information on International Programme and Policy Summaries in the Templates section: under Member Information >Templates ).

5 Page : 5 of 22 Roles and responsibilities Producing Member Co-ordinate collection and collation of underwriting data with servicing member(s) Negotiate global covers and DIC s Communicate details of global covers and in country responsibilities to local brokers to network Deliver group services e.g. Loss Control, Risk Management, Captive Management Produce and implement Client Service Plan Monitor premium flow Provide market and technical benefits to clients Review captive requirements/ development plans and forward responsibilities to local brokers Client service manual (if required) Servicing Member Places local covers according to programme Works with local client company to ensure corporate and local objectives are achieved Understands overall programme and any non-admitted coverage Coordinate local covers with multinational programme Provides local administration/ policy summaries/ loss control surveys/ claims reporting Meet clients as required to monitor significant client developments Keeps producing member appraised of all relevant local developments and market conditions It is the responsibility of both producing and servicing members to ensure that local legislation and taxation of policies is dealt with correctly. Everyone involved in a clients programme must ensure the placements are compliant. WBN extranet and Riskclick gives access to AXCO information.

6 Page : 6 of 22 Referred Business From WBN members All referred accounts will be co-ordinated by the WBN member in the country where the subsidiary is located. For referred business opportunities into the U.S. which involve more than one WBN member the introducing member will determine which U.S. member will control and co-ordinate the account. The local WBN member is responsible for determining the proper resources within their region to act upon and service the account. The local WBN member is also responsible for ensuring compliance with standard revenue sharing on these accounts. From brokers not part of WBN Occasionally requests are received by WBN member offices from brokers who are not part of WBN to service incoming business on their behalf. In the event of this happening, the WBN member receiving the request to service the referred business on behalf of another broker should notify the WBN member in the country or closest state where the non-wbn broker is located to ensure that there is no conflict of interest.

7 Page : 7 of 22 Prospecting foreign subsidiaries If a WBN member is prospecting a local subsidiary of a global company based in another country, the member in the country/region where the subsidiary is located must make every attempt to inform the member in the company s home country of the prospecting activity as soon as they become aware that the prospect is owned by a multinational based in another country. The member should advise the following detail wherever possible:- the office prospecting the account and the name of the account executive involved; the existing broker; the status of the contact; the lines of business being discussed; the estimated potential income; the last contact date, next anticipated contact date and the name and title of the individual being contacted.

8 Page : 8 of 22 Programme implementation The following procedure for implementing a global programme for a new client must be followed by the producing member s office. the client s risk management philosophy is understood specific account instructions regarding coverage, limits, rates, premiums, loss control, claims management, etc are clearly understood and acted upon with a minimum delay time frames are adhered to correct documentation is supplied the local subsidiaries or correspondents of the global insurance company underwriting the programme are notified. It is the responsibility of the producing office to ensure that the client notifies all subsidiaries to be involved in the programme of the details of the new arrangement, including the following: that the insurance arrangements have been revised and that WBN members have been appointed the scope of the appointment and the lines of insurance and/or specific services involved the objectives and structure of the programme that the WBN members for their country will call on them and that they should provide full co-operation with that representative. The Use of WBN documents, the New Business Referral, Information on International Programmes, Local Client Information, Global Account Review Form, Policy Summaries etc all of which are in the Templates section should be used. Also the client risk manager (or equivalent) should provide the producing WBN office with a list of subsidiaries and a contact for the insurance programme at each one. If the programme includes premium allocations, they must be agreed to by the client s risk manager, who must communicate them to the local subsidiaries. The producing office must inform all local servicing WBN offices of the details of the programme and directions for approach and initial contact with the client subsidiary. Copies of letters written by the client to the subsidiaries and the insurers to their branch should be sent by the producing broker to each WBN member involved (see sample Introduction Letter in the Templates section). The information provided by the introducing broker should include at a minimum: the name of the parent company and local subsidiary(ies), including risk management contact names (both parent and local), exact title, address, telephone, fax and address; a brief description of the global client s business, including if possible a copy of their most recent annual report/ brochure;

9 Page : 9 of 22 the scope of the WBN appointment; the specific responsibilities of the local servicing WBN office, including loss prevention programme responsibilities (if applicable); instructions for issuance of notices of cancellation on existing local policies and where necessary and/or feasible, to bring anniversary dates in line with the master policy; the structure of the global programme, including coverages, term of insurance, limits, exclusions, deductibles, captive participation (if applicable), any special reinsurance arrangements, any master coverage being provided on a nonadmitted basis; the name of the global insurer where and the local subsidiary or fronting company; confirmation that the controlling office of the global insurer, where applicable, has issued written instructions to each local insurer involved. If possible, the name of the individual at the local insurer contacted by the global insurer should be provided; a copy of the Broker of Record letter; timetable for information gathering, reporting back to the producing office, and implementation of programme coverage(s); method of remuneration and commission/fee level for the servicing WBN member and whether documenting of time and expense is required; details on premium allocations; timetable for collection and payment of premium. If the client has its own risk and insurance management guidelines the introducing broker must ensure that all procedures are in accordance with instructions to our network and the WBN International Operating and Client Servicing. Any differences must be communicated to the servicing members. If the client does not have such guidelines the introducing broker should investigate the clients needs and suggest using WBN s draft guidelines as draft for modification and use. The producing WBN office is also responsible for providing all necessary information to the client including: a list of local WBN servicing offices, including contact name(s), addresses, telephone, fax and addresses; the agreed time frame for local contact between WBN and the local client subsidiaries; timetable for premium payment; copies of summaries for all policies serviced by WBN members; a copy of the Master Policy(ies); periodic Stewardship reports as required.

10 Page : 10 of 22 All local servicing offices are to provide, at a minimum, the following: confirmation of receipt and understanding of the new programme instructions; feedback on any difficulties with the local client or the local insurer; a summary of all existing local policies (in format required by the producing office for the standard WBN version, please see the Templates section); Sample letters introducing new clients into WBN are included in the Templates section. confirmation of premiums and taxes and/or local charges paid

11 Page : 11 of 22 Collecting information / maintaining records Risk & exposure analysis and policy assessment form In the initial stages of prospecting a client the controlling broker is in need of information about risks and exposures around the world. The intention stated elsewhere in these guidelines that local member involvement will always be the ultimate goal, completion of the questionnaire used to gather key information is a new business/acquisition expense not subject to any fee or compensation. Should this be the first step in an exercise leading to a worldwide appointment, income will follow in due course. The Risk & Exposure Analysis and Policy Assessment Form is intended to gather general information about local subsidiaries, identify and analyse the risks and exposures and to review the extent to which existing insurance policies adequately cover these risks. The form is divided into Part A Property/Casualty and Part B Employee Benefits. It is up to the servicing member to provide additional information at their discretion. See the Templates section for a copy of this form. The producing broker must only request reasonable information in line with the size of the local client.

12 Page : 12 of 22 Survey report Identification of risks and exposures is the first step towards managing and controlling them. The intention of this report form is to facilitate this process on an ongoing basis. Measures taken to eliminate or reduce risks and exposures are only effective when the situation they relate to does not change. However, changes occur all the time and therefore a constant review is necessary in order to keep up with alterations and increases in the chances of losses occurring. Completion of the Survey Report Form (in the Templates section) will highlight current risks and exposures and enable the insured to understand why loss control and prevention measures are recommended. By managing risks and exposures in this way the insured will be able to influence the cost of insurance protection.

13 Page : 13 of 22 Policy summary forms These provide the producing broker with up to date information on local policies. These helps the customer more than having this information in a uniform and clear layout. WBN policy summary forms are designed to facilitate this. The appendices include a standard all cover and specified by class summary forms. It is up to the controlling broker in consultation with their client to decide which style of policy summary form best suits the clients and programme requirements. Specimen forms are found in the Templates section. WBN policy summary forms are designed to inform clients of local cover and policies.

14 Page :14 of 22 Global account review form The Global Account Review Form has been prepared to assist with the gathering of information on a uniform basis so that a Stewardship Form can be prepared.

15 Page : 15 of 22 Loss control The following Loss Control procedures apply to Property/Casualty and to Employee Benefits. 1 Recognising that Loss Control services vary between different countries depending on customary practice and the capabilities of the member in each country, it is the responsibility of the introducing member to inform the local member of the standard of Loss Control services which is required in respect of each international account. 2 On being informed of the standard of services required, the local member must inform the introducing member of the services which can be provided: (a) in-house (b) by the insurance carrier (c) by outside agencies with an estimate of the likely cost of such services. 3 The introducing member must specify the frequency with which it expects the local member to carry out Loss Control surveys. Loss Control surveys must be carried out within 20 working days of request from introducing broker or local client or earlier if requested and the request is reasonable. When deciding on the frequency of surveys the introducing member must seek the advice of the local member as it may be necessary to increase the frequency depending on local circumstances. 4 Due to the differing nature of client activities, Loss Control report forms will be developed by the introducing broker and sent to the servicing broker for completion. 5 A copy of the report with recommendations to be issued to the introducing member within 14 days of carrying out the survey. 6 Routine recommendations to be issued to the local client within 14 days of carrying out the survey with a copy to the introducing member. Recommendations of a critical nature i.e. those which affect the insurance coverage such as breach of policy conditions must be notified to the local client immediately and be referred to the introducing member within two working days of the survey so that appropriate action can be taken. 7 Insurance carrier s surveyor must always be accompanied by a representative from the local member unless agreed otherwise with the introducing member. Any recommendations or requirements made by the insurance carrier following such survey must be issued to local client and introducing member within seven working days. 8 Where the local member requires a fee to provide Loss Control services, the services and fee must be agreed with the introducing member before any costs are incurred.

16 Page : 16 of 22 Claims On admitted policies, there claims arising under policies will be handled by the local broker. In case the local policies do not provide cover the servicing broker is requested to contact the introducing broker immediately in order to find out whether cover can be provided under the DIC/DIL portion of the master policy. The introducing broker has to be informed immediately of significant claims. If claims adjusters/ surveyors have to be utilised the introducing broker has to be informed. Claims involving loss of life must also be communicated by telephone immediately. Claims arising under non-admitted program, no local claims service would be contemplated. However, each WBN broker would provide those services needed on an agreed to time and expense basis. In cases involving substantial amounts of time and expense the local WBN member will be entitled to compensation to be negotiated with the introducing member. Once again, such recommendations need to be agreed in advance of work being undertaken.

17 Page : 17 of 22 Accounts in jeopardy In the event of the producing or servicing broker believing an account is in jeopardy, it must notify all members involved so that local members can review the level of service to ensure that the problem is not exacerbated at any level. Notification regarding accounts in jeopardy should include but not be limited to the following information: the reasons for the account being in jeopardy; the seriousness of the problem i.e. is the entire account at risk, part only etc; if the account is out to tender, a list of all the tendering brokers and assigned markets, if any. The local member should inform the introducing broker of the strength and weaknesses of the competitor s local operation. clear instructions as to the action which is required to restore the relationship with the client

18 Page :18 of 22 Income sharing Standard income sharing procedures Unless otherwise agreed between the member brokers, the commissions and/or fees will be shared with the introducing WBN partner as outlined below: Once the income sharing threshold has been reached, the servicing broker of referred business must remit 30% of all local revenues to the referring/introducing broker including commission on coverages which are not part of a global programme. A sample Income Sharing Statement can be found in the Templates section. Standard income sharing will apply if a WBN partner has an existing (non-referred) account which becomes part of a global programme arranged by another WBN partner without the benefit of a referral from the WBN partner servicing the existing local account. It has to be stressed that all global income developed from a referral is treated as though it had been part of the original referral and should be eligible for income sharing of 70%/30% when the local account income exceeds 5,000 / US$6,000. An additional fee can be negotiated between the WBN partners when the local commission revenue exceeds 5,000 / US$6,000 and both partners agree that the income earned locally is not a proper remuneration for the work and service provided by the local broker. When the WBN has non-referred business and introduces the parent to its WBN partner and this introduction results in a global or non-admitted programme, this should be treated as an introduction within the terms of global income and standard income sharing guidelines apply. Income Sharing on Lost Business Unless otherwise agreed, income sharing should cease one year after the referring broker has lost the business. This is due to the fact that the introducing broker is no longer negotiating global terms and conditions and the new controlling broker (who for reasons of convenience may very well wish to continue using the WBN servicing broker) may require an income sharing arrangement as well. Specialty Insurance Placements Where a member is merely placing business as the agent of another member, the commission split will be agreed between the parties. Thresholds To be sure that adequate compensation is provided for servicing, the WBN partners income sharing will not apply unless local income for all lines on any one account exceeds a threshold of 5,000 /US$6,000 and income is shared from the first dollar once the threshold has been exceeded. As outlined before, any servicing WBN partner can request and negotiate with the introducing WBN partner alternative income sharing procedures; this should be done in advance of work being carried out.

19 Page : 19 of 22 Appeals procedures, cases of hardship and arbitration These are only Guidelines and should a situation arise that members are not able to resolve a difference of opinion, WBN has a mechanism in place to deal with this. Three experienced and respected members of the network will form an Arbitration Committee to review all aspects of a dispute and have binding authority to resolve them. Such a Committee would consist of the Chairman Ex-officio and two other WBN members who would be appointed on a case by case basis. In the event of the Chairman Ex-officio being one of the parties in a dispute his/her role would be taken over by the Chairman of WBN. The Arbitration Committee would have the authority to speak to all parties concerned and have access to all documents they deem relevant in order to conduct their investigation. Their findings would be made known to the parties involved and the Executive Committee who would decide to what extent it would be advisable to make additions or alterations to the Guidelines in order to avoid similar disputes in the future.

20 Page : 20 of 22 Accounting & money transmission The shared income due to the introducing broker will be paid before the end of February for all transactions which took place during the previous calendar year. The servicing broker will prepare an Income Sharing Statement per introducing country and forward this to the introducing broker with a copy to the Executive Office. The Income Sharing Statement (see specimen in the Templates section) has to contain following information: Insured Parent Policy number Insurance Company Description Insurance period Premium Total Income Income Share Due It is up to the introducing and servicing members jointly to decide how the money is paid (cheque, wire transfer, etc) or if they merely wish to reconcile their accounts.

21 Page :22 of 22 Delinquent accounts If a servicing broker is having difficulty in collecting premiums from the local subsidiary, he should report this to the introducing broker, who must take the matter up with the client.

22 Section : Templates Page :21 of 21 TEMPLATES All the standardised forms are listed at WBN homepage ( under Member Information >Templates.