Page 12 - Personal Underwriting Mandates & Guidelines - Binder - Version 3

General
If the client does not claim during any 12-month period from the start or anniversary date of the policy, the NCB/CFG increases at anniversary to:
○ Less than 12 months 0
○ 12 – 24 months 1
○ 24 – 36 months 2
○ 36 – 48 months 3
○ 48 – 60 months 4
○ Over 60 months 5
Post-claim, the NCB/CFG on policies paid monthly must be adjusted at the end of the month in which the claim is settled and not wait until renewal. No claim bonus/claim-free group categories on policies paid annually may be adjusted at renewal.
The following indicates how the NCB/CFG is affected after a claim. The premium loading per level of NCB/CFG should be a minimum of 10% unless the NCB/CFG is six or higher. The same rules apply to proposers previously insured with another insurer, who claimed during the period of insurance immediately prior to applying for insurance with Hollard. The NCB/CFG is adjusted as follows:
○ 6 reduces to 5 – 5%
○ 5 reduces to 3 – 10%
○ 3 reduces to 1 – 10%
○ 1 reduces to 0 – 10%
ITC checks – credit score vs insurance risk score
We need our clients’ consent in order to check their insurance risk score with credit agencies – commonly referred to as an “ITC check”. The insurance risk score helps us to assess a client’s risk profile and calculate their premium. It is not the same score as a credit score which a lender would typically be interested in, and checking the insurance risk score will not affect a client’s credit score. We currently use TransUnion as the service provider to perform these checks.
○ If clients give us permission, we will do this check when we quote, every renewal, every time the cover on the policy changes and at claim stage.
○ If clients do not give us permission, then the premium will be higher because our rating model then assumes the worst insurance risk score.
Should a client be subject to sequestration, curatorship, administration/debt review it must be referred to Hollard.
○ Sequestration
Definition
When a person’s debts exceed their assets and income, or a person cannot pay their debts when they become due, that person or a creditor, could apply to the court to have the person sequestrated.
– Once a court grants this order, the person may not enter into any legal contracts because they legally have no contractual capacity.
Personal Underwriting Mandates & Guidelines – Binder – Version 3 11