Underwriters work in several insurance categories, including health, life, auto and home. Their job is to review applications for insurance, analyze risks and decide whether the company will offer coverage. Underwriters must approve applications so that the insurance company can collect premiums. They must not approve too many high-risk applicants who may require large payouts, however, because the insurance company ultimately wants to make money. Screen Applicants Underwriters review applications for insurance and screen them based on the criteria of the insurance company. Applicants who do not meet the basic requirements are instantly denied insurance. For example, some auto insurance companies will not cover boats or motorcycles, so applicants seeking coverage for those are immediately denied coverage. Analyze Risk An insurance underwriter analyzes the risks associated with applications that meet the minimum criteria. For example, a home insurance underwriter considers whether a home or property is in a high-risk flood or earthquake zone. Health insurance underwriters consider medical risks such as a family history of cancer or heart disease, or an individual with a history of smoking. Underwriters may communicate with medical doctors, credit bureaus and other agencies to gather additional information as needed. Approve Applications Underwriters use computer programs and software to help them determine an applicant's eligibility and risk factors. The underwriter must understand what facts to enter into the program. Based on the recommendations from the software and risk analysis, the underwriter decides whether to approve or reject an application. He may also choose to consider more information, such as credit history or additional medical records, if an applicant is on the border of being rejected or accepted. Write Policies Underwriters determine the coverage limits and premiums for approved policies. Higher-risk applicants pay higher premiums than those with lower risk. In addition, they may receive less coverage. Insurance underwriters write insurance policies explaining client coverage and premiums, while minimizing potential losses for the insurance company.
Insurance underwriters decide if applications for insurance cover (risks) should be accepted and, if so, what the terms of that acceptance are. They assess a risk according to the likelihood of a claim being made by weighing up a number of factors and asking for detailed information from prospective clients (policyholders). The aim is to minimise losses for their company and help to make a profit. Most underwriters specialise in one type of insurance. The main types of insurance are: general insurance: covers household, pet, motor, travel; life insurance/assurance: covers illness, injury, death; commercial insurance: covers companies; reinsurance: part of the risk is placed with another insurer.
Chapter III consisting of Regulation 13 to 18 deals with these matters. Every underwriter shall abide by the code of conduct at all times. Regulations 14 and 15 contain provisions regarding the matters on which every underwriter shall enter into an agreement with the body corporate and his general responsibilities. The contents of the agreement shall include the period of agreement, the amount of underwriting obligations, the period by which the underwriter should subscribe, the amount of commission/brokerage payable, and other details for fulfilling the underwriting obligations. The general responsibilities of the underwriter are as follows: 1. The underwriter shall not derive any direct or indirect benefit from underwriting the issue other than the commission or brokerage payable under an agreement for underwriting. 2. The total underwriting obligations under all the agreements shall not exceed 20 times the networth. 3. Every underwriter, in the event of being called upon to subscribe for securities of a body corporate pursuant to an agreement shall subscribe to such securities within 45 days of the receipt of such intimation from such body corporate. Regulation 16 to 18 relate to maintenance of proper accounts, books and records and their preservation for 5 years and SEBI’s power call for and obtain information from the underwriter. Thanks