A new guide has been published by the International Underwriting Association (IUA) to help insurers navigate money handling requirements in the European Union.
Across the continent insurers face varying approaches to risk transfer and the distribution of insurance through agents, sub-agents, or brokers. Often, they have to agree to ‘cascaded’ risk transfer, making them responsible for funds held by parties further down the distribution chain.
Now, a report commissioned by the IUA outlines the different requirements and approaches encountered in 15 key European markets. The publication states whether risk transfer is possible or, indeed, mandatory. It also describes how risk transfer can be cascaded and the general market practice for the protection of premium and claims funds held by a sub-agent.
The IUA’s Delegated Authority Underwriting Group commissioned DLA Piper to conduct the research.
Helen Dalziel, Director of Public Policy at the IUA, said: “Delegated authority agreements allow insurers to delegate their underwriting authority to coverholders who issue policies and handle claims on their behalf. Such arrangements are a popular business model for many IUA companies.
“The Insurance Distribution Directive requires each EU member state to implement measures to protect premium or claims money held by insurance intermediaries. But there are different options for achieving this and as a result how risk transfer operates and whether it is cascaded varies widely.
“This new report provides IUA members with invaluable compliance information for managing distribution chains across the European continent.”
IUA members can download ‘Risk Transfer Regulation and Market Practice – a survey of key European markets’ from iua.co.uk/delegatedauthority.
