Chapter 9 Applications for Automobile Insurance; Underwriting Narrative Model Questions

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Hirose187
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Chapter 9 Applications for Automobile Insurance; Underwriting Narrative Model Questions
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2014-03-12 13:48:01
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Chapter Applications Automobile Insurance Underwriting Narrative Model Questions
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Chapter 9 Applications for Automobile Insurance; Underwriting Narrative Model Questions
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  1. Identify the 10 sections of the Manitoba Standard Application Form No. 1.
    a) Policy Period

    b) Applicant's Full Name and Postal Address

    c) Particulars of the Described Automobile

    d) Coverage

    e) Health of Drivers

    f) Claims Information

    g) Driver Information

    h) Past Insurance Experience

    i) Excluded Uses

    j) Ownership Details

    k) Primary Use

    l) Signature
  2. a) List the 3 functions of underwriting.

    b) State the 2 levels at which underwriting takes place.

    c) List 5 things that may be included in an insurer's underwriting manual.
    a) Underwriting Function

    - Consideration of the acceptance or rejection of a risk

    - If the risk is accepted, the terms of the policy

    - The premium for the policy

    b) 2 Levels of Underwriting

    - Head Office underwriting

    - Individual underwriting

    c) Underwriting Manual

    - An acceptance or rejection list

    - A "senior underwriter only" acceptance list

    - A limit table (the maximum liability limits which can be accepted)

    - A classification guide

    - Other instructional material
  3. a) Identify 4 typical functions of individual underwriters.

    b) List 6 sensitive areas for underwriters.
    a) Individual Underwriting

    - Classifying Risks

    - Rating drivers according to driving records

    - Placing risks in the correct rate group

    - Using endorsements correctly

    b) Sensitive Issues

    - Policy cancellation for underwriting reasons; 

         - an insurer's refusal to renew the policy;

         - premium surcharges; 

         - notice to lienholders and to those with whom a certificate of insurance has been filed;

         - premiums appropriate to the risk - no more and no less; and

         - the use or improper use of the insured's personal information (including credit information).
  4. You are a claims adjuster working for MPI and you have been assigned a file involving Bruce, an insured who was involved in an accident with a 3rd party driver. Bruce has a basic Autopac policy with MPI, which he signed 3 months ago. The damage to Bruce's vehicle is estimated at $12,000. The 3rd party was determined to be 100% at fault.

    It is revealed during the claims investigation that Bruce was using his vehicle as a taxi during the accident, which he failed to disclose during the application process. When reviewing the original application you notice that Bruce did not sign it. Do you have to honor the claim? Explain you answer.
    a) Special Risk (SRE) and Private Company Applications

    - You will have to honour Bruce's claim as per the Insurance Act.

    - This is stated under section 236(2) which reads:

    - No statement of the applicant shall be used in defense of a claim under the contract unless it is contained  in the signed written application thereof or,

         - where no written signed application is made, in the purported application,

         - or part thereof, that is embodied in,

         - endorsed upon or attached to the policy.

    - Section 236(3) continues this course by stating:

    - No statement contained in a purported copy of the application,

         - or part thereof,

         - other than a statement describing the risk and the extent of the insurance, 

    •      - shall be used in defense of a claim under the contract unless the insurer proves that the applicant made the statement attributed to him in the purported application,
    •  
    •      - or part thereof.

    - Without a signed application, it is the insured's word against the insurer's.

    - Precedent tells us that if there is any doubt, courts usually rule in favour of the insured.

    - If a policy is issued with no signed application having been received, the insurer is obliged to provide the insured an application for signature afterward.  

    - This is usually a copy of the declarations section of the policy.

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