DGI04 Liability Insurance Underwriting

Transcription

1 DGI04 Liability Insurance Underwriting Module Description: This module aims to provide the candidate with the knowledge and skills in commercial liability insurance operations. It deals with the legal principles in liability and their application to insurance coverage, as well as an analysis of a liability insurance policy. Given the differences in the nature of various types of liability insurance, this course provides an analysis of major commercial liability products, namely, Motor Liability Insurance; Work Injury Compensation Insurance; Public And Product Liability Insurance; Professional Liability Insurance; and Directors And Officers Liability Insurance. Syllabus: Understand aspects of legal liabilities function and types of law, common law duties of care, statutory duties, contractual duties, fiduciary duties and limitation of actions. Chapter 1 Legal liabilities 1.1 Function and types of law 1.2 Common law duties of care the tort of negligence nuisance strict liabilities intentional tort the legal concepts of trespass to land, persons and goods 1.3 Statutory duties statutory duties and statutory liabilities statutory duties and civil liability 1.4 Contractual duties the elements of an enforceable contract the form of contract the privity of contract disclaimer and indemnity clauses warranties and guarantees remedies for breach of contract 1.5 Fiduciary duties 1.6 The legal relationship between insurer and insured that insurance is a contract 1.7 Limitation of actions the general principles of limitation the Limitation Act Understand the perception, identification and evaluation and the management of risk. Chapter 2 Perception, identification, evaluation and management of risk 2.1 Various approaches to risk the elements of hazard the identification and perception of risk risk management the role of the underwriter 2.2 Obtaining adequate underwriting information the details of proposer seeking insurance for identification purposes and policy drafting DGI04 Updated as at 11 May

2 the business activities and geographical exposures of the proposer for which insurance is required the use of past claims history the use of past insurance history the use of details of any prosecutions relating to the risk proposed house keeping and other risk prevention measures the duty of utmost good faith and how applies to liability insurance 2.3 Loss control surveys the components of a loss control survey the benefits of a loss control survey the role of a loss control surveyor 2.4 Risk improvement the rationale for risk improvement the importance of good housekeeping the importance of good labour relations 2.5 Impact of other legal systems on underwriters the jurisdiction of the Court the impact of the legal system on the underwriter the non judicial dispute resolution in terms of: - arbitration - mediation the differing societal attitudes to tortious liability 2.6 Past claims records the problems with using past claims records why underwriters place a reserve on outstanding liability the assessment of the value of the claim Undestand the main considerations of liability underwriting, its theory and practice. Chapter 3 Liability underwriting, theory and practice 3.1 Operative clause the triggering events, the practice of providing cost cover the specification of business 3.2 Policy conditions 3.3 Admitted and non admitted policies the difference in conditions/difference in limits (DIC/DIL) policies the umbrella policies 3.4 Underwriting the risk the factors involved when determining the rate the considerations involved when determining claims cost how to arrive at the final rate how to decide on the rate for a specific case how to apply the rate the indemnity limits the increased limits the operation of excess of loss covers risk sharing in the form of excesses and co insurance DGI04 Updated as at 11 May

3 Understand the general features of, common issues in, and differences in liability policies. Chapter 4 General features of, common issues in, and differences in liability policies 4.1 Basic structural features of liability policy wording the insuring clause the purpose of exclusions the use of definition clauses the conditions that apply to all insurance contracts the details contained in the declaration the need for extensions and endorsements 4.2 Types of liability policies 4.3 Language styles 4.4 Legal liability as the trigger for liability policies 4.5 Variations in insuring clauses of liability policies how insuring clauses of liability policies vary, in terms of: - description of activity - width of coverage - Occurrence vs. Claims Made bases of cover - Indemnity vs. Pay On Behalf bases of cover 4.6 Common exclusions explain some exclusions like: - pollution - nuclear - war/civil unrest - contractual liability 4.7 Common conditions some common conditions like: - notice of claims and circumstances - prohibition against admission of liability - other insurance - subrogation - cancellation provisions - mediation / arbitration - governing laws - interpretation - observance of terms and truth of statements - the proposal form 4.8 Limit of liability the factors involved in deciding on the amount of limit how to structure large limits describing limit layers 4.9 Deductibles 4.10 Co insurance Understand the cover and practices of commercial general liability insurance. Chapter 5 Commercial general liability insurance 5.1 Commercial general liability legal framework 5.2 Law of tort the law of tort in areas such as: - negligence - occupier s liability DGI04 Updated as at 11 May

4 - nuisance - strict liability - vicarious liability 5.3 The commercial general liability insurance policy the variation in forms used the language styles used in policy writing the basis of coverage the insuring clause in terms of: - compensation cover - cost and expense of litigation the exclusions of commercial general liability insurance policies other exclusions that are insurable under other policies the policy conditions the common extensions and endorsements the limit of liability 5.4 Commercial general liability insurance underwriting the sources of underwriting information underwriting considerations how risk is rated the limit of liability when excess/deductibles are applied 5.5 Market overview the size of the market the maximum capacity available and the maximum capacity required commercial general liability insurance rating the amount of excess/deductibles applied to Commercial General Liability policies Understand the cover and practices of products liability insurance. Chapter 6 Products liability 6.1 Products liability legal framework the legal framework in Singapore with focus on: - negligence - contract 6.2 The product liability insurance policy the forms, language styles and basis of coverage the scope of cover provided under a standard Public Liability policy, including: - insuring clause - exclusions - conditions - extensions and endorsements 6.3 Products liability insurance underwriting how insurers use the information available from the proposal form as well as other reliable sources to underwrite products liability risk the underwriting considerations how insurers rate the risk the limit of liability and what excess/deductibles can be applied 6.4 Market overview public liability market issues and their effect on cost and availability of cover the market norms for limit of indemnity DGI04 Updated as at 11 May

5 Understand the cover and practices of motor Insurance third party liability. Chapter 7 Motor insurance third party liability 7.1 Motor third party liability legal framework the duties imposed upon road users by law the mindset of road users the statutory provisions on road use and insurance 7.2 The Motor insurance policy the scope of cover provided in respect of Motor Insurance policy, including: - the forms used - third party only cover - exclusions - conditions - endorsements 7.3 Motor third party liability insurance underwriting the sources of underwriting information the key underwriting considerations for these third party liabilities how such risks are underwritten and rated the workings of the risk factor premium rating system 7.4 Market overview the Motor Insurance market, including: - major market developments - size of market - market norms for limit of indemnity - rates - schemes - significant players - important organisations relating to motor liability insurance claims Understand the cover and practices of employers liability insurance. Chapter 8 Employers liability insurance 8.1 Work Injury Compensation Act what the Work Injury Compensation Act (WICA) is and how it works 8.2 The statutory claim the framework of a statutory claim the statutory qualifications for compensation the parties entitled to claim and liable to pay compensation the employer s liabilities under the Act 8.3 Common law action jurisdiction parties to the action the types of damages recoverable under the common law the limitation period the difference between a statutory and common law claim 8.4 Relevant legal principles the definition of a employee under the Work Injury Compensation Act the employer s duty of care the accident cover under the Work Injury Compensation Act the employers legal liability toward their employee in the course of employment 8.5 The insurance policy DGI04 Updated as at 11 May

6 the forms of contract the rules of constructing a policy the basis of coverage of the Work Injury Compensation Insurance the scope of cover of the Work Injury Compensation policy 8.6 Work injury compensation risk underwriting the nature of the insurance scheme in Singapore 8.7 Market overview Understand the cover and practices of directors and officers liability insurance. Chapter 9 Directors and officers liability insurance 9.1 Duties and responsibilities of directors the legal framework the legal framework that governs the duties and responsibilities of directors and officers, and the categories of directors duties the breach and consequences of directors duties the regulation of companies and directors in Singapore corporate governance and disclosure in Singapore the need for director training and development in Singapore 9.2 Directors and officers (D&O) liability insurance policy the scope of cover provided under a typical Directors And Officers Liability Insurance policy, including: - insuring clauses - location related aspects - cover extensions - exclusions - conditions and other provisions 9.3 Directors and officers liability insurance underwriting the sources of underwriting information the key underwriting considerations the limit of liability and terms and conditions of the D&O policy how past and existing claims/circumstances are treated how quotations are developed 9.4 Overview of Singapore D&O Market directors and officers liability market issues and their effect on cost and availability of cover Understand the cover and practices of professional indemnity insurance. Chapter 10 Professional indemnity insurance 10.1 Duties and responsibilities of professionals the legal framework the legal duties and responsibilities of professionals, including: - contractual duties - concurrent liabilities in contract and tort - statutory duties - fiduciary duties 10.2 Professional indemnity insurance policy the scope of cover provided under a standard Professional Indemnity Liability policy, including: - insuring clause - exclusions - extensions DGI04 Updated as at 11 May

7 - conditions and other provisions - limit of liability - deductible or excess - defence costs - right and duty to defend/appoint legal counsel - proposal form 10.3 Professional indemnity insurance underwriting the sources of underwriting information for professional indemnity insurance the underwriting considerations the limit of liability of professional indemnity insurance 10.4 Market overview professional indemnity liability market issues and their effect on cost and availability of cover Understand the management of liability claims. Chapter 11 Management of liability claims 11.1 The liability claims process how a claim is submitted the necessary claims handling and management activities 11.2 Preliminary checks 11.3 Control over claims handling and management the insurer s rights and the insured s duties 11.4 Investigation and enquiry the type of information and cooperation required the role of loss adjusters and other professionals/specialist in claims investigation the purpose of recording written statements 11.5 Consideration of substantive issues the substantive areas that the insurer needs to consider, namely the: - legal liability of the insured - policy liability 11.6 Instructions and interim measures when a legal counsel is appointed 11.7 Decision making 11.8 Settlement and beyond the apportionment and allocation of claims the application of limit of liability the application of deductibles the procedure of obtaining discharge 11.9 Claims examples some claims examples like: - Products Liability claims - Motor claims - D&O claims - PI claims Understand underwriting management underwriting authority, referral process, violation of underwriting authorities, compliance, local market practices, risk management, loss control administration and effectiveness, risk accumulation, reinsurance renewal underwriting, coding, liaison between underwriting and other DGI04 Updated as at 11 May

8 departments, common inaccuracies and inconsistencies in underwriting, managing client relationships and complaints and factors influencing the market cycle. Chapter 12 Underwriting management 12.1 Underwriting management 12.2 Underwriting authority 12.3 Referral process 12.4 Violation Of underwriting authorities 12.5 Compliance with local regulatory and industry practices admitted and non admitted insurance 12.6 Local market practices 12.7 Risk management 12.8 Loss control administration and effectiveness 12.9 Risk accumulation Reinsurance the reasons for reinsurance the basic forms of reinsurance, namely, - proportional reinsurance - non proportional reinsurance the violations to authority to place reinsurance Renewal underwriting the use of large loss report in renewal underwriting Coding Liaison between underwriting and other departments what an underwriter can expect from the respective departments and what they can expect from the underwriter in return Common inaccuracies and inconsistencies in underwriting the common accuracies and inconsistencies in underwriting under the following groups: - classification and coding of risks - pricing Managing client relationships and managing complaints the problems that underwriters face in managing customer relationships the dispute resolution process of FIDReC Basic factors influencing the market cycle Understand the features of underwriting administration and underwriting audit. Chapter 13 Underwriting administration and underwriting audit 13.1 Monitoring 13.2 Underwriting administration 13.3 Quotation log the information required in a quotation log 13.4 Follow Up procedures 13.5 A request for endorsement 13.6 Renewal review 13.7 File construction 13.8 Underwriting monitoring and audit the purpose of a file review the questions applicable to compliance review the standards of performance that individual underwriters are measured against in the audit process DGI04 Updated as at 11 May