to sign written lines disproportionately
English translation: to sign underwritten risks in unequal proportions between subscribers
| 17:33 Apr 3, 2005 |
| English language (monolingual) [PRO] Bus/Financial - Economics | |||||||
|---|---|---|---|---|---|---|---|
|
| ||||||
|  Selected response from: Elizabeth Rudin United Kingdom Local time: 00:31 | ||||||
Grading comment
| |||||||
| SUMMARY OF ALL EXPLANATIONS PROVIDED | ||||
|---|---|---|---|---|
| 4 +3 | to sign underwritten risks in unequal proportions between subscribers |
|
Answers
18 mins confidence: 
peer agreement (net): +3
peer agreement (net): +3to sign underwritten risks in unequal proportions between subscribers Explanation: This is how I understand it. Here is a good explanation: (c) Disproportionate signing clauses A typical example of such a clause which appears in the market is as follows: "Reinsurers agree to allow (name of broker) without further authorisation, to sign written lines disproportionately" This allows for signing down to be carried out at the cedant or broker's option in unequal proportions as between the subscribers to the slip. A cedant may prefer to retain a larger proportion with one reinsurer rather than another, for example, for reasons of the security which that particular reinsurer will provide. As can be seen above in the excerpts from his judgment in the Zephyr, Hobhouse J did not consider this possibility. Such a clause clearly falls within the analysis (a) above in that the broker is given express authority to finalise the signing down. That said, from a risk management perspective, reinsurers would be wise to ensure that the clause requires all such reductions to be carried out prior to inception or else they will risk the scenario where a loss impacts post inception but prior to "closing" which may see them being held liable disproportionately after the loss (ie anti-selection post loss). http://www.aar.com.au/pubs/pdf/insur/ins4jun03.pdf (Under)written lines usually refer to the insured risk types, for example: Any insurance plan under which a number of employees and their dependents are insured under a single policy, issued to their employer, with individual certificates given to each insured employee; the most commonly written lines are life and accident and health. http://www.memberbenefits.nysut.org/contentPageViewer.asp?br... ... The vocabulary of reinsurance is widely accepted the world. over. The precise meaning of certain ... underwritten lines regarding the same risk. Actuary ... www.scor.fr/us/pdf/result99/inst_09.pdf |
| |
Grading comment
| ||
