1. Insurance Proposals and Submissions
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11. Disclaimer
Insurance forms and endorsements vary based on insurance company; changes in edition dates; regulations; court decisions; and state jurisdiction. This instructional materials provided by Insight is intended as a general guideline and any interpretations provided by the instructor or the creator(s) of this material do not modify or revise insurance policy language. In providing these materials, the authors assume neither liability nor responsibility to any person or business with respect to any loss that is alleged to be caused directly or indirectly as a result of the instructional materials provided. Copyright 2014 All Rights Reserved

12. Your Instructor Today
Marjorie L. Segale, AFIS, CISC, RPLU, CIC, CRIS, ACSR, CISR
Vice President, Insurance Community Center,
President, Segale Consulting, LLC

13. What This Course Will Cover
Submissions—The Basics
The Process
Account Review—Identifying Exposures
Applications/Marketing
Proposals
Issuance of Policy and Review

14. Polling Question #1 Question #1
Do you offer either an Excess or Umbrella policy to every client?
Yes No
Sometimes

15. Submissions The Basics Standard of Care
Based on Regulations
To the Insurance Customer
To the Insurance Company

16. Basics of Standard of Care
Based on Regulations
Compliance with such issues as GLBA, Privacy Acts, authority as an agent/broker
To the Insurance Company
That the submission qualifies for the insurance carrier
That you are honest and accurate
To the Insurance Customer
Ordinary care to obtain the coverages they have requested

17. Standard of Care and Submissions
The submission for insurance is the culmination of several steps in a process
Acquiring the customer
Identifying exposures to risk that can be transferred to insurance
Gathering all the necessary information to provide the appropriate insurance AND to understand the transfers of risk the insured has assumed OR transferred

18. Identifying Exposures
The Process
Account Review
Identifying Exposures

19. Account Size May Dictate Process
Whether small or large premium, all deserve and expect a certain level care, due diligence and service
Agent/broker may differentiate based on size of account: small, mid, large
This will differ by agency/brokerage
Procedure manual should specify procedures
All staff should follow

20. Polling Question #2 Question #1
Do you offer either an Excess or Umbrella policy to every client?
Yes No
Sometimes

21. Account Size May Dictate Process
Small
Limited Marketing Eligibility
Application
Cover Letter
Mid Size
Account Review
Coverage Analysis
Marketing
Proposal
Coverage Summary
Supporting Documents
Large
More Detailed
More Options
More Policies
Risk Survey
Independent Inspections, etc

22. The Case Of The “Small Account”
The insured had a small woodworking shop insured with an agent as a “single shot account” (No supporting business)
The account was an accommodation because the agency handled the son’s account which was a sizable premium
The agent spent a lot of time with the son, reviewing values, going over the renewals

23. The Case Of The “Small Account”
With the woodworking account the agent just kept renewing it year after year “as is” for THIRTY YEARS
The woodworker burned to the ground
The policy had been issued on a basic fire form without any inflation guard
Result???????

24. Basic Account Review Who, What, Where Locations / Operations
Gross Sales/Payroll
Current Insurance
Missing Coverages
Named Insured

25. Larger Account Review Flow Charts Of All Facets Of Operations
Survey Risk Exposures
Coverage Checklists
Locations
Operations
Gross Sales/Payroll
Flow Charts Of All Facets Of Operations
Web Search and Review
Review of all supporting contracts
Named Insured

26. Survey Risk Exposures & Coverage Checklists
Physical Inspection
A Must
Many carriers require for large or small
Survey checklist
Take experts with you
Coverage Checklists
By line
Exposure based

27. Survey Risk Exposures & Coverage Checklists
Coverage Checklist and Recommendations
To reduce oversight
Organized approach
The Insurance University has a library of coverage checklists for its university members
Today, we will be using the Proposal Checklist

28. Polling Question #3 Question #1
Do you offer either an Excess or Umbrella policy to every client?
Yes No
Sometimes

29. Locations/Operations-Flow Charts
Graphically view account’s operations
Assists in identifying:
Geographic exposures
Property / Liability
Product / Services
Employees
Dependency on other businesses
Shipping
Business Income / Dependent / Extra- Expense / Foreign
Was called contingent business interruption - old term and still used in foreign forms

30. Flow Chart Of All Facets Of The Operation
Locations
Operations
Employees
Manufacturing bottlenecks

31. Operations Flow Chart Sample
Type of Operation
Manufacture
Sell
Build
Party Responsible For Damage
Domestic
Foreign
Supplies
Suppliers
Contributors
Sub-Contractors
Sub-manufacturers
Method of Transit
Truck / Rail
Ship / Air
Recipients of Products or Services
Contract Review

32. Relationship with other Entities--Suppliers
Heilind
RTD
Parts Supplied
Electric Switches
Motors & Hydraulics
Location
Indiana
China

33. Relations with Customers
Pistons
Seals/Glands
Piping
10% of Sales
30% of Sales
48% of Sales
Arizona
Puerto Rico
England

34. Basis of Structuring Coverage
Client information and risk assessment
Document review
Vendor agreements
Contracts
Leases
Availability of coverage
Premium

35. Polling Question #4 Question #1
Do you offer either an Excess or Umbrella policy to every client?
Yes No
Sometimes

36. Applications

37. Applications and Marketing
Complete the application to various insurance carriers
Many are sent in incomplete
Obtain quotations
Choose the right company based on coverages; stability of the insurer and pricing

38. Polling Question #5
You have submitted applications for your insured’s to ten insurance companies. Five companies declined and one company’s quotation was significantly less expensive than the other companies. What is the correct method of advising the insured of your marketing results.
Question #1
Do you offer either an Excess or Umbrella policy to every client?
Yes No
Sometimes

39. Application & Marketing
First to represented / admitted carriers
Know your market place
Who are the specialists
What will they accept and not accept
Size
Type
Know your company policy forms
Know the rules—underwriting manuals

40. Application & Marketing
Prepare Executive Summary
Synopsis of account for Underwriter
Outline submission attachments, projected premium and need by date

41. Market the Account Producer / AM Marketing Manager Know Your Market
Maintain Declinations
Show Companies on Proposal
Show Ratings of the Companies
Create the marketing file
AMS
Follow Up

42. Declinations In writing Communicate in writing to insured
Coverage summary
Separate document
Retain

43. Additional Submission Items
Supplemental applications (as required)
Financials
Statement of Values (SOV)
Signed and dated by insured
BI Worksheet
Completed, signed and dated by insured
Advertising examples – hard copy, website
Leases as required
Statement of values not signed and DATED by client. Worse yet having the producer signing.
If no signature then confirmed back to client.
Don’t see signed BI worksheet and worse yet producers sign the worksheets
Do you have a method for getting financials – Trade secret/ confidentiality statement/ only actively to markets for bid/ Can send to underwriter direct.
If you don’t understand lease CHECKLIST. Don’t be practicing law without a license.

44. Proposals

45. Proposal Purpose and Format
Standardize the Process
Template Used By All
Signature from Customer
Coverages
Identifies Coverage Lines
Terms and Conditions
Written Communication
New Business
Renewal

46. Proposals Customer must sign the proposal
Accurate and complete
Use disclaimers
Proposal communicates insurance companies and coverages
Customer must sign the proposal
Changes to proposal must be initialed

47. Polling Question #6 Question #1
Do you offer either an Excess or Umbrella policy to every client?
Yes No
Sometimes

48. Polling Question #7 Question #1
Do you offer either an Excess or Umbrella policy to every client?
Yes No
Sometimes

49. Initial Coverage Changes
Resubmit to quoting insurance companies
Obtain new coverage options and cost
Communicate coverage changes and cost to the customer

50. Customer Authorization
Obtain permission to bind coverage in writing from the insured
Issues binder OR obtain the policy number from the insurance carrier and issue an evidence of insurance

51. After Coverage is Bound or Authorized
Order coverage
If binding and replacing coverage – start cancellation process
Suspense for receipt of policy
Review policy when received
Verify coverage matches EXACTLY what was requested and ordered

52. See Proposal Checklist
Proposals
See Proposal Checklist

53. Checking and Double Checking
Issuance of the Policy
Checking and Double Checking

54. Finalize Placement Bind Corrections Follow Up In writing to company
Agency issues
Company Issues
Follow Up
Review policy
Additional Corrections
Don’t make insurance purchasing assumptions for clients.

55. A Word to the “Wise” on Binders

56. Binders
A binder is a temporary contract with a maximum and minimum term determined by state law or underwriting instructions
Confers full extensions of rights, duties and privileges under the insurance contract being bound

57. Binders A binder must have the elements of CATS:
Complete in all respects, both with what is covered and what is not
Accurate in all respects
Timely with respect to inception and expiration date of binder and with respect to jurisdictional limitations on length of binder
Signed by someone with the authority to do so

58. Best Practices of Binder Issuance
Know binding authority granted by the insurance company
Obtain binder from E & S broker
Binding maximum 60 days
Issue a binder on new business
Issue a binder on renewal business when the policy has not been received

59. Best Practices of Binder Issuance
When possible – insurance company u/w issue
If not – confirmation in writing that agent binding is authorized

60. Best Practices of Binder Issuance
Agency issue
Signed by licensed authorized (by contract) resident or non-resident agent for the state(s) where coverage is provided must sign the form.
The agency must be licensed in all states where coverage is bound

61. If the Account Is Not Written
Send a thank you letter to the company underwriter whose quote was not accepted
Send a thank you letter to the company underwriter who does not wish to quote
Good relationship building
If unable to quote send a letter documenting same to the client
Official Kiss Off Letter

62. Did ALL of these items match and issued correctly?
Proposal
Application
Binder
Policy
Summary
Certificates
Match

63. Policy Review
Some clients don’t want to take the time – do your best to insist on proper review time
Restrictions and limiting endorsements and coverage language
Be aware and educated
Learn how to communicate these issues to the insurance buyer

64. Key Issues to Review on Policy Checking
Correct effective / expiration dates
Name Insured correct
First Named insured
All other entities included or written separately
Inactive entities included
The review and delivery of the policy(ies) and endorsements should occur within 30 days of receipt. Often there are multiple policies being issued for an insured by different insurance companies.
Even though these policies may have common expiration dates, they may not all be received at the same time.
The best practice is to deliver the policies to the insured once they have been checked by the producer rather than maintain original contracts in file waiting to deliver them all together.
While this may cause extra work on the part of the producer, the sooner that the policy is delivered to the insured the sooner they have the ability to review the terms and conditions of their contract.

65. Key Issues to Review on Policy Checking
Locations
Limits / Deductibles
Endorsements as requested
Endorsements added by company
Limiting language
Warranties
Edition dates match proposal and quote
The review and delivery of the policy(ies) and endorsements should occur within 30 days of receipt. Often there are multiple policies being issued for an insured by different insurance companies.
Even though these policies may have common expiration dates, they may not all be received at the same time.
The best practice is to deliver the policies to the insured once they have been checked by the producer rather than maintain original contracts in file waiting to deliver them all together.
While this may cause extra work on the part of the producer, the sooner that the policy is delivered to the insured the sooner they have the ability to review the terms and conditions of their contract.

66. Polling Question #8 Question #1
Do you offer either an Excess or Umbrella policy to every client?
Yes No
Sometimes

67. Standard of Care and Submissions
Deliver or mail ( ) the
Include a summary of coverages if that is your procedure
Include a letter with the delivery that asks the insured to read their policy and state that the policy provisions supersede all prior documents pertaining to this submission including but not limited to the proposal

68. Summaries of Insurance

69. Polling Question #9 Question #1
Do you offer either an Excess or Umbrella policy to every client?
Yes No
Sometimes

70. Summaries of Insurance
Summaries “summarize” coverages that have been issued. They supersede the proposal.
The summary should also indicate that the policies supersede any binders previously issued and that those documents are now null and void
Note any differences between requested and issued coverages

71. Summaries of Insurance
Explain any special exclusions or limitations contained in the policy received
There must be disclaimer language on the summary indicating that it does not change any of the terms or conditions of the policy as issued.
Customer should sign and date the summary / policy receipt

72. Sample Summary Disclaimer Language
The purpose of this summary is to recap the insurance program that has been issued for the agency. This summary should be used for reference purposes only as this summary in no way changes nor interprets the terms and conditions of the policy issued.

73. Summary Identify, quantify exposures Establish coverage requirements
Confirm with customer
Ask for coverage correctly
Verify that you received what you asked for
Document the process and the results

74. Upcoming Classes 4/24 Insight on Crime Insurance 4/29
Property Valuation California
5/1
Personal Toys and Unusual Exposures
5/6
Real Estate Leases
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