Page 195 - Fire Insurance Ebook IC 57

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vii) Margins built into rates should be consistent with
the experience of the insurer with respect to
commissions, management expenses, contingencies
and profit.

viii) Insurer should take necessary steps to ensure that
the competition should not lead to unethical rate
cutting or any other improper underwriting
practices. The insurer has to provide such a
confirmation statement to the Board , IRDA and
the customers , which act as a deterrent to improper
practices.

Q 11. Discuss the concept of class rated and
individual rated products.

Ans. Based on the type of risks for underwriting and
exposures, the products are classified into the following
two types :

(i) Class Rated Products - They are further classified
into
(a) Internal tariff rated products - These are

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