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(v) The internal audit machinery must be put in
place for ensuring quality and compliance in
underwriting a policy. Until the insurers get used
to working in a disciplined manner in a post tariff
scenario , the underwriting audit will continue to
be of critical importance to ensure prudence in
underwriting.

Hence it is important to place a robust
independent underwriting audit system with an
audit frequency of a quarter if possible. If insurer
decides to use their existing internal audit
machinery along with technical audit, they
should ensure the auditors are thoroughly
trained in underwriting and the technical audit
is focused and with high frequency.

(vi) The procedure for reporting to the Board on the
performance of the management in underwriting
the business, including the forms and frequency
of such report must be detailed enough to highlight
any emerging problem at the bud stage.

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the profitability and spread of business on a regular
basis.

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