RM-5.1.9
Past version: Effective from 01 Jul 2007 to 30 Sep 2007
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Factors that licensees may consider appropriate in assessing the levels of underwriting risk include:
(a) The adequacy of the licensee's pricing structure;
(b) The volatility of sales volumes (e.g. the risk of poor underwriting from over-rapid expansion);
(c) The uncertainty of claims experience (and the length of the claims 'tail');
(d) The share of premium paid to intermediaries;
(e) The adequacy of the coverage of the reinsurance programme;
(f) The impact of the licensee's inability to secure renewal of part of its reinsurance at acceptable terms or at all;
(g) The risk of unintended risks claims being covered (or not excluded) by policy wordings; and
(h) The risk of mis-selling, for example, the number of complaints or disputed claims.
Amended: January 2007