GENERAL INFORMATION GUIDELINES – APPLICABLE TO ALL LINES OF COVERAGE • • Applicable to General Agents who have access to Contract Click on any underlined item to access guide content TABLE OF CONTENTS • • • • • • • • 1.14.2015 APPLICATIONS – BINDERS – BOR’S – CLEARANCE – QUOTES o Applications o Binders o Broker of Record o Clearance o Quotes – Valid for 30 Days o Submissions – Email Addresses BANKRUPTCY o Bankruptcy – Active Accounts o Bankruptcy – New Business Quotes CANCELLATION – LAPSE IN COVERAGE – NON-RENEWAL – REINSTATEMENT – ALL TYPES EXCEPT PREMIUM FINANCE o Cancellation, Non-Renewal, Reinstatement o Cancellation Types o Disclosure of Premium Refund – California Assembly Bill – 2404 o Lapse in Coverage o Non-Payment – Cancellation Received Before Policy Issued o Non-Payment – General Agent Has Not Been Paid by the Retailer o Non-Payment – Insured Has Not Paid Retail Agent o Processing Guidelines for Cancellation, Non-Renewal or Reinstatement o Reinstatement Requests CANCELLATION – PREMIUM FINANCE o Cancellations – Premium Finance Only CERTIFIED COPIES OF POLICIES o Procedures to Obtain Certified Copy CLAIMS – LOSSES – LOSS RUNS o Claim Reporting o Loss History o Loss History – Accident Year, Calendar Year, Policy Year o Loss Run Requests o No Known Loss Letter Template PROCESSING – CERTIFICATES AND ENDORSEMENTS o Backdating o Certificates of Insurance o Endorsements Adding a New Coverage Part Midterm ‘Fill-In’ Wording Mailing Address Change – Midterm o Excluding Coverage – How to Indicate on Policy o Forms o Midterm Endorsements – State Specific Forms PROCESSING – POLICY ISSUANCE o Policy Issuance: Applications Company a Policy is to be Issued In Page 1 of 36 o o o o o o • • • • 1.14.2015 Copies of Company Approvals Countersignatures Loss History Mandatory Entries on the Policy Multi-Peril Policy Multi-State Guidelines Rating Documents Surplus Lines Data Form (SLB Data Form) Overview Surplus Line (SL) Warning Stamp Terrorism / TRIA Emailing Policies and Related Underwriting Documents to the Company Excluding Coverage – How to Indicate on Policy Forms Moving an Account to a Different Business Unit within the Company Policy Fees, Expense Constants and Taxes Policy Number Assignments: Adding a New Coverage Part Midterm Cancel and Rewrite Lapse in Coverage New Business Package Policies – Line of Business Combinations that Create a Package Policy Prefixes Renewals Obtaining New Blocks of Policy Numbers Policy Term – Annual or Short Term o o RATING o EDGE Online Rater o Credit Authority – Subjective o Commissions o Endorsement – Edition Date for Rates that will be Applied o Minimum Earned Premium o Multi-Peril / Package Combinations Eligible for Package Credits EDGE Online Rater o Policy Level Coverage vs. Policy Level Premium Charges o Premium Definitions o Premium Rounding o Renewal Rating RULES FOR FORM ATTACHMENT, CANCELLATION OR NONRENEWAL, SLB DATA FORMS, TAXES AND FEES o Attachment Rules o Definitions: Home State Mailing Address Main State / Primary State State of Domicile o SLB Data Form TRIA o Liability o Property UNDERWRITING o Authority Page 2 of 36 o o o o o o o o o o o o Backdating Bulletins and Flyers Forms including CX, NRN, State Specific, SLB Data Named Insureds: Defined Underwriting the Named Insured • ATIMA Combinability of Interests • • DBA’s • First Named Insured Holding Companies • • Named Insured Changes – Endorse or Cancel/Rewrite Types of Named Insured Entities • New Ventures Prohibits – All Lines of Business Quote Status Documentation Renewal Underwriting: Renewal Certificates States East of the Mississippi vs. West of the Mississippi River – Map Submit Criteria – New or Renewal Territory – International Exposures Weather Related Bulletins – Cease Binding – Moratoriums – Archives GUIDELINES – ADMINISTRATIVE • • Applicable to General Agents who have access to Contract Binding Authority P&C Click on any underlined entry to be taken to guide content TABLE OF CONTENTS • • • • • • • • • • • • • • • • • • 1.14.2015 Accounting: o Payments to the Company o Electronic Transfer of Funds Advertising and Marketing Agency Code Number Agency Profile Reports – Premium and Loss Information Agency Underwriting File Reviews Annual Company Report Company Help Desk Complaint Handling Procedures DocuCorp Download Instructions and Updates Expiration / Renewal Lists Hit Lists – Binding Success Stories Licensing Requirements Mailing Address Office of Foreign Asset Control – OFAC Password – Access to Online Contract Underwriting Guide Privacy Policies Product Navigator Regulatory Compliance including Department of Insurance Complaints Page 3 of 36 APPLICATIONS – BINDERS – BOR’S – CLEARANCE – QUOTES – TERRITORY / INTERNATIONAL Applications: • • • Applications: o ACORD Application(s) - use for all commercial risks: ACORD 125 (or equivalent) - Applicant Information Section (to include equivalent of ACORD’s “Fraud Provisions” and “Notice of Insurance Information Practices”) ACORD 126 (or equivalent) – Commercial General Liability Section (if liability coverage is being requested) ACORD 140 (or equivalent) – Property Section (if property coverage is being requested) o Farm/Ranch Application - use instead of ACORD for accounts that will be placed on a Farm/Ranch Policy o Supplemental Applications: If required, indication it will be indicated in the underwriting guidelines Competitor Supplementals accepted if they develop similar information Original applications may be discarded once scanned into electronic records Updated Applications: • New or updated applications should be obtained every third year Binders: • • • Do not send copies of binders to Company Issue policy and related documents and forward to Company within 30 days of policy effective date See additional guidelines under Policy Issuance and Processing Guidelines Broker of Record: • • • 1.14.2015 New Business: o True to our “binding” environment, Contract Binding will provide quotes to all agents who submit risks, eliminating the “first in” rule o No BOR Letters will be accepted Existing Accounts: o Master Policies BOR’s will not be accepted on existing Master Policies on Colony Specialty paper o Mid Term Mid-term BOR Letters will not be accepted o Renewals On existing business the Producer controls the renewal. This can only be changed with the receipt of an acceptable BOR Letter (see below). The existing Producer will in turn be notified. • One BOR Letter and one Rescission from the incumbent General Agent. • Multiple BOR’s and Rescissions will not be accepted BOR Procedures: o BOR Letter: Acceptance: • New General Agent must submit new application(s) and if applicable supplemental application(s) • If General Agent on expiring policy has already released a renewal proposal the Company will honor that proposal for the new General Agent Page 4 of 36 • • • Conditional Acceptance: • If the BOR is received within 5 business days of policy expiration the Company cannot guarantee acceptance. An attempt will be made to secure the controlling General Agent’s approval to waive their rescission period and release the account. BOR Not Required: o Expiring policy’s General Agent is no longer appointed for Contract o Only the retail agent is changing (not the General Agent) on renewal Requirements for BOR Letter: o Change in General Agent Only: ACORD 36 – Agent/Broker of Record Change or a letter on Named Insured’s and/or Retail Agent’s letterhead that confirms the Named Insured, Insured’s address, policy number and policy effective dates Signature of the retailer and/or insured required o Change in General Agent and Retailer: ACORD 36 – Agent/Broker of Record Change or a letter on the Named Insured’s letterhead that confirms the Named Insured, Insured’s address, policy number and policy effective dates Signature of the Named Insured required Rescission Letters: o 5 business days given to the controlling General Agent to obtain a rescinding letter from the Insured/Applicant Clearance: • No clearance is performed in Contract until Agent is binding/issuing policy Quotes – Valid for 30 Days: • • New or renewal quotes are valid for 30 days If an ISO Form or Company Form has changed, for a period up to 30 days beyond the original quote date, the old form may still be used Submissions – Email Addresses: • • • • • • • • • • • Commercial Auto: [email protected] Contract – Arizona: [email protected] Contract – Colorado: [email protected] Contract – Virginia: [email protected] Environmental: [email protected] Excess Casualty: [email protected] Garage – Arizona: [email protected] Garage – Colorado: [email protected] Primary Casualty: [email protected] Property – Arizona: [email protected] Property – Virginia: [email protected] BANKRUPTCY Bankruptcy – Active Accounts: • • 1.14.2015 Bankruptcy Discovered or Notice of Bankruptcy Received: o General Agents must contact the Company immediately when they become aware of an insured that is in bankruptcy Cancellation: Page 5 of 36 If cancellation is being considered you must consult with the Company before taking any action. Do not send out cancellation for nonpayment of premium on a debtor-in-possession without first contacting the Company. Debtor-in-Possession defined: The bankruptcy case begins when a debtor files a bankruptcy petition (or when one is filed against the debtor). At this point, the debtor becomes a debtor who has declared bankruptcy and is referred to as a ‘debtor-in-possession. Non-Renewal: o Non-renewal of a risk in bankruptcy is acceptable for underwriting reasonsprovided all state specific and policy form specific provisions and procedures are followed o The reason for non-renewal should be stated as “Failure to meet underwriting criteria: Change in the insured’s financial condition.” o Never state the reason for non-renewal as “bankruptcy” o Consult with the Company as needed o • Bankruptcy – New Business Quotes: • Bankruptcy (Chapter 7, 11, or 13), receivership or in foreclosure are aspects of new business that usually mean there is no home for the risk in Contract Binding Authority. Submit to the Company for an exception, but only if the following conditions have been verified: o The risk is to be written under the Bank’s name, or written under the name of a court appointed entity in care of the owner o There is verification of a third party that is tending to the property, including regular inspection, with A.I. status granted to our insured on the Property Manager’s policy o Inspection is mandatory for all risks regardless of insured property values, and/or general liability premium o The Company does (for example) readily write vacant properties with a submit CANCELLATION – LAPSE IN COVERAGE – NON-RENEWAL – REINSTATEMENT – ALL TYPES EXCEPT PREMIUM FINANCE Cancellation, Non-Renewal, Reinstatement: • • • • • Backdated cancellations require Company approval Cancellations and non-renewals must be processed in accordance with all applicable state rules, regulations, laws well as the policy’s forms Notice is to be mailed to the ‘first named insured’ in most cases with the following exceptions: o AK & CT only – the cancellation, non-renewal or reinstatement must go to ALL Named Insureds shown on the common policy declarations o See additional guidelines for policy form attachment rules – Underwriting – Forms External notifications must always include 3 additional days to accommodate mailing time See also: o Cancellation – Premium Finance – Honoring Cancellation Request Date o Cancellation – Premium Finance – Notification Requirements o Reasons for Cancellation or Non-Renewal (includes time requirements for notifications) o State by State CX and NRN Laws Table – Contact your Colony Specialty underwriter Cancellation – Types: • 1.14.2015 Flat: o Company approval required Page 6 of 36 • • If you have approval to flat cancel and have not yet issued a policy you must ALSO get Company approval to cancel without issuing a policy o Duplicate coverage will require proof be submitted o Return premium – Total inception policy premium must be returned. No penalty holdbacks allowed. Pro Rata: o Policy canceled after the effective date of coverage due to following: Company request, in this case waiving the Minimum Earned Premium (MEP) is acceptable Non-payment of premium to General Agent or Premium Finance Company Rewritten within another division of the Company Short Rate: o Policy canceled after the effective date of coverage at Insured’s request Must be allowed by state statute and policy verbiage Minimum Earned Premium (MEP) to be applied o Returns only 90% of what would be returned on pro-rata basis unless applicable state regulations dictate otherwise for an Excess and Surplus Company Disclosure of Premium Refund – California Assembly Bill 2404: • • • Effective 01.01.12 the California Insurance Code requires that any insurance policy that includes a provision to refund premium on a basis other than pro rata disclose that fact in writing Disclosure must be provided prior to or concurrent with the application and prior to renewal using Company notice CAPRNOTICE – 0911 – “California Notice – Premium Refunds” Notice must be provided to each applicant prior to, or concurrent with the application Lapse in Coverage: • • If there has been a lapse in coverage of 30 days or less the Company must approve binding. If the Company approves binding, the new General Agent must obtain (prior to the bind date) a written and signed statement from the Insured confirming an awareness of the lapse. Reinstatements for nonpayment of premium, should the lapse be 10 days or more must be approved by the Company. Lapses over 30 days will usually require a cancel and rewrite if there has been no change in General Agent. Non-Payment – Cancellation Received Before Policy Issued: • • Even though a binder carries the same terms and conditions as a policy, to avoid controversy in the event of a loss, a policy must still be issued. The only exception is when the Insured has never paid anything to the Retail Agent. In these cases a policy will not be issued. See General Agent Has Not Been Paid by the Retailer. Non-Payment – General Agent Has Not Been Paid by the Retailer: • Decline these requests since General Agents should not bind coverage before receiving the deposit premium from the Retail Agent. Non-Payment – Insured Has Not Paid the Retail Agent: • • 1.14.2015 Rescission rather than flat’ cancellation is only allowed when the Insured failed to provide any payment for the policy. Rescission is not allowed in situations where the Retailer has simply failed to remit premium to the General Agent. Company approval required and if approved the General Agent must complete the following: Page 7 of 36 Process a Policy Rescission notification rather than a flat cancellation. Provide a letter to the prospective insured that explains that because no premium was tendered, there is no contract. This is in lieu of a ‘flat’ cancellation because no policy has or will be issued that could be cancelled. o Process the rescission notification as soon as possible. Copies must be provided all additional interests such as mortgagees or additional insureds. These are to be processed via certified mail. Company coding will document this as a ‘flat’ cancellation in CAPS for accounting purposes (no notice). A copy of the rescission letter and proof of mailing must be retained in the General Agent’s file. o o • Processing Guidelines for Cancellation, Non-Renewal or Reinstatement: • • • • 1.14.2015 Company retains right to directly process and send DNOC, determine cancellation dates and calculate return premium in the event of non-performance by General Agent or disagreement between the parties involved General Agent’s Responsibilities (unless directed otherwise by Company): o Calculate return premium. The policy’s Minimum Earned Premium (MEP) must be factored in as well. MEP’s can vary from 25% to 100%. o Process Direct Notice of Cancellation (DNOC) and transmit to Named Insured using certified mail procedures, within 24 hours of a Company directive. o Maintain ‘proof of mailing’ and all applicable materials in General Agency file o Within 30 days of requested cancellation date provide the Company with: Cancellation endorsement Cancellation notification to Insured (Company copy) Proof of mailing (copy) Submit endorsement with at least one of the following: • Insured’s copy of declarations page accompanied by letter requesting cancellation. Must be signed by Named Insured. Copy acceptable if original on file with General Agent. If DNOC or LPR is submitted with the cancellation endorsement, then the Insured’s Dec page is not required. • Letter from Insured requesting cancellation with proper release from any mortgagee or lien holder for accounts with property coverage • Policy Release Form (ACORD 35) signed by Named Insured or authorized representative. Mortgagee and/or Lien Holder signature may also be required, if applicable. Notification Requirements when Company/Agency Contract is being Terminated: o When an Agency’s contract is being terminated nonrenewal/cancellation notifications may be handled by the Company, or alternatively, if agreed to by the Company, by the General Agent. Notification Requirements To Policyholder: o General Agent is solely responsible to notify Insured(s) of policy expiration and send any required legal notice of non-renewal or cancellation Termination notifications must be mailed to the first Named Insured (except AK and CT where they must go to all Named Insured shown on the Declaration page o Cancellation or non-renewals where a notification requirement applies require external notice be sent even if the General Agent believes coverage can be replaced with another carrier unless the Company has approved otherwise. If there is insufficient time left on the active policy the Policyholder should be offered an extension of current policy terms, conditions and pricing so adequate notice can be processed. Page 8 of 36 Even if a state law does not require compliance with CX and NRN laws, many policy coverage forms include cancellation notice provisions. In these cases the General Agent must follow the policy’s provisions: General Liability coverage parts with CG0001 have policy language that states an insurer must give no less than 30 days notification to an insured if the policy is not going to be renewed (10 days for nonpayment of premium). Property coverage parts with CP0010 do not have policy language that addresses cancellation and non-renewal provisions to the insured. The Company has taken the position we are to give 30 days notice (10 days for nonpayment of premium) to the insured whenever possible. Notification Requirements To Loss Payees and Mortgagees: o Loss Payees (see CP1218 – Loss Payee) also have a cancellation notification requirement of 30 days (10 days for nonpayment of premium). o Mortgagees are to be given 30 day notification of cancellation (10 days for nonpayment of premium). Reasons for Cancellation or Non-Renewal: o In states where there are no cancellation or non-renewal requirements that apply to Surplus, the Company uses U173 – Cancellation form. o State by State CX and NRN Laws Table – Contract your Colony Specialty underwriter o The U173 allows as little as 10 day (plus 3 day mailing) notifications for the following reasons. One or more of these specific reasons must be typed on the official external notice of cancellation. These are all within the General Agent’s authority. Any reason not listed below requires a 30 day notification, as well as a submit to the Company for approval. o Company approval required if the reason for CX or NRN is not listed below: Cancellation is for all insureds under such policies for a given class of insureds Crime(s) arising out of acts of an insured of which they are convicted and in turn increase the hazard(s) insured against Facts – Omission or concealment relating to an insurance application, rating, claim or coverage under the policy Fire, health, safety, building or construction regulation or ordinance violations that are applicable and in turn increase the hazard(s) insured against under the policy Information – Failure or refusal of insured to provide information necessary to confirm an exposure or determine the policy premium, or comply with underwriting requirements Insurance commissioner determined reasons Midterm addition of exposures in a state not on the policy at inception that require endorsement of state specific forms (i.e. cancellation/nonrenewal, signatures pages and/or declarations) that are deemed essential which require cancellation of the existing policy and thus a rewrite Omission, or willful /reckless act(s) by an insured increasing the hazard(s) insured against Premium – nonpayment or failure to pay a premium when due Reinsurance loss or substantial decrease in reinsurance Risk changes that are significant or substantial that would be covered by the policy o • • Reinstatement Requests: • 1.14.2015 See separate guidelines for Premium Finance Company Reinstatements Page 9 of 36 • • • • Documentation related to reinstatement must be maintained in General Agent’s file Company approval required to reinstate if: o File review uncovers adverse underwriting information, outstanding items or policy already flagged for non-renewal o More than 10 business days between cancellation and reinstatement dates: Seek Company approval if gap is a total of 30 days or less If more than 30 days, obtain Company approval to cancel and rewrite (assuming account is in good standing) o Request is third or more in a single policy period Reinstatement endorsement is processed by General Agent but requires receipt of signed ‘no known loss letter’ first. Use ACORD 37 – Statement of No Loss Reinstatement must be made without a lapse in coverage CANCELLATION – PREMIUM FINANCE ONLY: • • Cancellation notices sent by Premium Finance Company are considered a cancellation made on behalf of the Insured. Cancellations are on a pro-rata basis. Premium Finance Cancellation – Honoring Cancellation Request Date: • Cancellation request date from Premium Finance Company will be honored unless it violates notification requirements of a state’s cancellation laws and/or required notifications mortgagees, lien holders, certificate holders, etc. Although the Premium Finance Company request comes to the Company as if it were from the Insured, these requirements take priority. Premium Finance Cancellation – Notification Requirements: • • • 1.14.2015 Insured: o Do not send out any additional notices of cancellation to Insured subsequent to the Premium Finance Company’s legal notice of cancellation. Any additional notice to Insured only serves to extend Company’s liability on the policy. o If no third parties listed on a policy the Company will accept the Premium Finance Cancellation request date without providing additional notices Third parties entitled to notice: o Company will no longer cancel effective the Premium Finance Company (PFC) cancellation request date. Advance notice of cancellation will be provided as prescribed by the policy’s conditions. o Nonpayment related to premium finance is no different than any other nonpayment type of situation. Only 10 day notifications required for nonpayment of premium. Additional Insureds should be notified if the A.I. agreement requires it. If additional time must be provided to an A.I. the coverage under policy would be extended to the A.I., but not to the Named Insured. Separate notice required providing 10 days plus 3 additional days for mailing for the A.I. but not the Named Insured. Mortgagees and loss payees are provided additional time if required but not the Insured. Coverage under policy would then be extended to mortgagee or loss payee and not the Named Insured. Separate notice required providing 10 days plus 3 additional days for mailing for the mortgagee or loss payee but not the Named Insured. Copies of cancellation endorsement and notice to A.I., Mortgagee or Loss Payee must be forwarded to Company for processing within 30 days. Return Premium Calculations: Page 10 of 36 While not obligated to return pro rata in all states the Company has elected to use a pro rata basis in all states, subject to the policy’s minimum earned premium (MEP) provision When a minimum earned premium endorsement is attached to the policy, the lesser amount of the two calculation methods is returned to Insured State Exception: • New York State – only a minimum earned premium (MEP) amount of up to 25% can be retained for the TRIA portion of the policy. Reinstatements: o The Company is not required to honor Premium Finance Company reinstatement requests. Reinstatement is the sole discretion of Company and/or Company’s authorized representative. o Get Company approval to reinstate if: File review uncovers adverse underwriting information, outstanding items or policy already flagged for non-renewal More than 10 business days between cancellation and reinstatement dates • Seek Company approval if gap is a total of 30 days or less • If more than 30 days, cancel and rewrite if account in good standing Reinstatement endorsement not to be processed until signed ‘no known loss letter’ received. Use ACORD 37 – Statement of No Loss Reinstatement with a lapse in coverage not permitted o Do not reinstate more than twice without approval of Company o General Agent underwriting file must document actions taken, and when requested forward copies to Company o • CERTIFIED COPIES OF POLICIES Certified Copy Procedures: • • Requests to be directed to [email protected] Requests must include the following: o Delivery instructions o Effective date of policy o Need by date (please allow at least 5 business days to process) o Policy number CLAIMS – LOSSES – LOSS RUNS Claim Reporting: • • • • • • 1.14.2015 Agents, Brokers, and Producers do not have authority to adjust, compromise, or settle claims and are not authorized to assign any loss or accident to an independent adjusting firm Company provides full claims related services for all claims and losses related to the Company’s policies Accidents or losses may occur at locations that are inconvenient or impractical for Company Claims to handle promptly. In such cases the claim may be assigned to an approved third party independent adjuster or adjusting firm. All accidents, incidents, suit papers, or property damage must be reported the same day received. o How to report a claim: [email protected] Do not send claims information to Company Underwriters Claims Employee Directory is located within the Company website Page 11 of 36 • Loss Notice Forms: https://www.argolimited.com/pages/our-companies/colonyspecialty/claims o or click on the Loss Runs icon on the main page of the Contract Underwriting Manual Loss History: • If more than 3 losses (paid or reserve) in three most recent policy terms, and/or any one loss is $5,000 or above – Submit. Loss History – Accident Year, Calendar Year, Policy Year: • • • 1.14.2015 Accident Year: o Advantages include: Eliminating earned factored used to adjust policy year experience when report as of 12 months Making it possible to give greater credibility to the latest year of experience More readily understood Producing a more mature body of loss experience at each reporting date Reduction in the lag between the experience period and effective date of the rates, showing the trend in loss costs and frequencies more accurately o Accident Year Experience is created by matching all losses incurred (not necessarily occurring) with a given 12 month period, usually beginning on January 1, with all premium eared within the same period of time. Incurred losses will include any changes in IBNR. o Once calculated for the period, Calendar Year Experience never changes o Accident year experience is fully earned in 12 months regardless of the effective date of the underlying policies o Accident Year Experience considers a specific group of losses that arise out of accidents that occur during a given 12 month period o Accident Year Experience places emphasis on losses Calendar Year: o A more simplistic approach that segregates all premiums and losses attributable to policies having an inception or renewal date within a given twelve-month period. o More useful from an accounting perspective. o The total value (losses paid plus loss reserves) of all losses arising from (regardless of when reported) policies incepting or renewing during the year is divided by the fully developed earned period for those same policies. The finally developed ‘earned premium’ will always equal the ‘written premium’ for those policies Policy Year: o Resembles Accident Year Experience in that, while the experience is developing, the loss reserves are used in the calculation, but the ultimate result cannot be finalized until all losses are settled. o Different from Accident Year Experience in that premiums earned from policies incepting during a one-year period of time will earn over the course of both the year of inception and a later year(s). Similarly, losses to be included will be occurring over the same extended period of time, also known as the Underwriting Year. o Everything that has developed is included (all losses, premiums, reserves, expenses, allowances) etc. Page 12 of 36 Loss Run Requests: • • • From General Agent: o Access to loss runs is available directly from the website maintained for General Agents If the system won’t allow access to the history the Company must verify you were the Controlling Agent for any and all of the policy terms requested If you were the Controlling Agent for the periods of loss history you need access to but cannot get or find the loss information in the Company’s online loss history database please send your request to: [email protected] o If the incumbent General Agent is no longer in business, the Company will honor the request submitted by a different General Agent if they forward permission from the Insured to release loss runs to them From Insured: o If Named Insured sends written request for loss runs to Company they will be mailed directly to the Insured address on record o If Insured’s request includes Insured’s Letterhead and/or business card we will be able to e-mail or fax loss history directly to Insured From Retail Agent: o The Company cannot honor requests from Retail Agents. Retail Agent requests must be sent directly to General Agent. No Known Loss Letter: • • Use ACORD 37 – Statement of No Loss This template has been approved by Corporate Legal and is the preferred format for use in Contract Binding Authority. PROCESSING – CERTIFICATES AND ENDORSEMENTS Backdating: • Company approval required Certificates of Insurance: • • • • • 1.14.2015 Certificate Completion: o Do not Indicate premium as ‘fully earned’ o Do not use a certificate as a replacement for a policy endorsement Copies of Certificates: o Please do not forward copies to the Company, just maintain in General Agent’s file. Form: o ACORD Certificates are the only type that is acceptable, but since we are nonadmitted we will accept edition dates prior to September 2009. Prohibited: o Issuance of certificates directly from the Retail Agent’s office, o Manuscript changes to certificate language o Amendment of the notification requirements to the A.I. by striking out ‘will endeavor’ becomes entirely your responsibility to manage, including any consequences or obligations that result from striking out ‘will endeavor’ language. Purpose: o Tool to inform a third party of coverage or limits in force for an Insured. Certificates are not an insurance policy and do not provide, endorse, amend, Page 13 of 36 extend or alter in any way the terms of the actual insurance policy. Only an endorsement or amendment to the policy can effect changes in coverage. Endorsements: • • • • • Additional premium generated (if any) to be collected within 45 days from the issue date. Return premium endorsements to be processed within 30 days. Company approval required: o Backdating from the date the General Agent actually approved and/or received the request requires Company approval o Exposure changes that do not fit within Company guidelines require Company approval o Named Insured changes that represent material changes in exposures. See Named Insured guidelines. o Policy period extensions Liability limit increases remain in place until policy expiration Mailing address change – midterm: o A mid-term change in mailing address does not result in any changes to signature pages, state specific forms, NRN or CX until the next renewal Rates – edition date that will apply to endorsements – see Endorsement – Edition Date for Rates that will be Applied Endorsements – Adding a Coverage Part Midterm: • • If additional coverage parts are added midterm, a new policy prefix change is applied at renewal, not midterm If the additional coverage part added midterm technically creates a package, package credit is not applied until renewal. Contact the Company as needed. Endorsements with ‘Fill-in’ Wording: • • Some forms and endorsements require “fill-in” wording for everything from descriptions, dollar amounts, limits, locations, etc. If the General Agent fails to complete these endorsements properly it can create claim handling complications. Whether policies are issued annually or by automated systems these forms still must be filled in with all the required information. Excluding Coverage – How to Indicate on Policy: • When guidelines advise to indicate ‘Excluded’ on a policy, do not use any variation other than ‘Excluded’. It is not acceptable to instead indicate “Not Covered”, “O”, “Zero”, “Not Applicable” or “N/A”. • See Underwriting – Forms Forms: Midterm Endorsements – State Specific Forms: • If an exposure is added midterm that is in a state that was not on the policy at inception the related state specific forms (i.e. cancellation/nonrenewal, signature pages and/or declarations) are to be added at the next renewal rather than mid-term. If there are state specific forms deemed to be absolutely essential when the new state is added the policy should be cancelled and rewritten. PROCESSING – POLICY ISSUANCE General Agents using the EDGE system to issue policies (i.e. not using DocuCorp): • 1.14.2015 Forms with multiple selections will auto-complete for those issuing in the EDGE system since those selections have already been made in the rating process. For non-premium Page 14 of 36 bearing forms with drop down selection the EDGE user does not complete these until policy issuance. General Agents that issue policies using DocuCorp instead of the EDGE System: • • Forms with drop down selections must be completed by non-EDGE users Forms in DocuCorp are not password protected Policy Issuance: Application(s): • To be updated by the General Agent every 3 years: o ACORD o Supplemental Application (if applicable) o Farm/Ranch Application Company a Policy is to be issued in: • • • Colony Specialty Insurance Company – Virginia only Colony Insurance Company – All states except Virginia If the policy has exposures in Virginia, plus exposures in other states: o Policies that have locations in states where we have different company authority, e.g. if the named insured is located in VA but has locations in VA & MD, will require writing separate policies if premium is to be allocated to both locations; one in Colony Specialty Insurance Company (CSIC) for the VA exposure, and the other Colony Insurance Company (CIC) for the MD exposure. With composite rating, the guideline of using the insured’s state of domicile or headquarters should be followed, and separate policies will not be necessary. In the rare instance that policies are being issued in separate Companies and you are technically not able to apply package credits when they would otherwise be eligible had the exposures been written on a single policy, contact the Company to see if subjective credits may be applied to be equivalent to a package credit. o There is one exception to the above and that is when you composite rate the account. The exception that is applicable is as follows: “Policies that have locations in states where we have different company authority, e.g. if the named insured is located in VA but has locations in VA & MD, will require writing separate policies if premium is to be allocated to both locations; one in CSIC for the VA exposure, and the other CIC for the MD exposure. With composite rating, the guideline of using the insured’s state of domicile or headquarters should be followed, and separate policies will not be necessary.” When seeking an exception Company approval is required and all rating will be done by the Company. All of the premium will go into one liability class code, with all other class codes showing ‘included’ Copies of Company Approvals (if any) • Forward copies to the Company with Policy Countersignatures: • Countersignature laws have been eliminated in all states Loss History: • • • 1.14.2015 3 years unless a new venture If a new venture inquire about insured’s business background instead If the account has been verified to be loss free for the 3 most current policy terms (or longer) it is acceptable to just check the box for ‘No Losses’ on the application Page 15 of 36 Mandatory Entries on the Policy: • • • • • Company: o Select ‘Colony Insurance Company’ for all states except VA. o Select ‘Colony Specialty Insurance Company’ for VA. o If the exposures in VA and other states use the ‘State of Domicile’ to determine which Company paper to issue the policy on Fill-in forms: o Be sure to send copies to the Company of all forms that have ‘fill-ins’ Forms List: o ‘Schedule of Forms and Endorsements’ U001: Use form U001 in lieu of listing forms on the declaration page and individual coverage parts Policy number must be indicated on U001 List all coverage parts and all forms applicable to the policy here Notices to Policyholders – All statute mandated notices to policyholders must be listed on Company Form U001 – Schedule of Forms or Endorsements Policy Number(s) on Common Declarations Page: o If a renewal, list the prior policy number. If new business, type ‘New’ in prior policy area. Producer – Enter General Agent’s address and General Agent code Multi-Peril Policy: • See guidelines for ‘Package Policy’ under ‘Rating’ Multi-State Guidelines: • • • See Underwriting – Forms Company – Verifying the policy is correctly placed in the right Company (see above) Forms – Designating all state specific forms that apply to the policy. Rating Documents: • Forward copies of all rating worksheets that reflect the bound policy premium Surplus Lines Data Form (SLB Data Form) Overview: • • • • • 1.14.2015 Only insurance professionals licensed as surplus lines brokers may transact business through a surplus lines company. All licensed surplus lines brokers are required to file surplus lines tax reports and payments to the Departments of Insurance monthly, quarterly or annually. Several states require that insurance companies provide a listing of all policies written through the company in that state for the calendar year with the name, address, and license number of the licensee who paid the taxes. The States use this information for audit purposes and make it a condition for an insurer’s continued eligibility to do business in the state. Generally, policies are written in a General Agent’s home state and the license used for the transactions is in the General Agent’s home state. For out of state policies, agents may either use a non-resident license, a branch office license, or another agent to file the appropriate taxes. In order to eliminate the paperwork after year end required to complete the surplus lines tax reports, the Company now requests the licensee tax payer information on all policies written outside of the agent’s home state at the time coverage is bound via the mandatory SLB Data form. The form is forwarded when sending the completed policy to the Company. o SLB Data form SLBDATA – 0811 is only required when: Page 16 of 36 • Risk state differs from the agents “home state” (domicile state) Risk is multi-state (involving locations in different states). This can be either physical locations or mailing addresses in different states. Even if taxes are being paid by the Insured an SLB Data form is still required in the above two cases o Exceptions for filing out SLB Data Forms each time a risk is written out of state: If the General Agent consistently writes of their state of residence and has a corporate non-resident SL license the Company may be approached for exceptions. This will require Division Manager approval. Corporate Regulatory Company must be contacted: [email protected] SLB Data Form and Risk State Election: o The General Agent determines what is to be the ‘Home State’, the Company can’t make this determination. The Department of Insurance may be able to assist the General Agent when in doubt. o If the SLB Data form is not forwarded, Contract Underwriting will make two attempts to obtain the form. After that no further attempts will be made and Corporate Underwriting will follow up with the General Agent for the data. When the SLB Data form is received, in ImageRight, please add completed form to “Data Entry Binding” and “Unassigned” for processing. Surplus Line (SL) Warning Stamp: • • General Agents are required to affix, by stamp, or in writing, a statement on the declarations page concerning the fact that the policy is a surplus lines policy and often, the states require a signature of that statement (frequently termed the “SL warning stamp”) Some states require the President or Vice President’s signature on the policy. This is accomplished by the signatures being placed on the policy jacket. This is done to be in compliance with the statutes. Terrorism / TRIA: • • 1.14.2015 Quotes: New Business, Renewal, Midterm: o Premium charge for Terrorism must be shown separately on the quote o The appropriate Policyholder Disclosure Notice of Terrorism Insurance Coverage must be attached to all quotes, including midterm quotes o May be endorsed midterm with Company approval, but no pro-rata charge is to be applied, flat premium charge applies Issuance: o The coverage for terrorism on the policy will be tailored to fit the insured’s acceptance or rejection of the coverage o The premium charge for terrorism coverage is to be shown on the Common Policy Declarations Page o The premium will never change during the policy term o A signed copy of the Policyholder Disclosure Notice of Terrorism Coverage either accepting or rejection should be forwarded to the Company when sending the completed policy Another Insurer’s Policyholder Disclosure Notice of Terrorism Coverage cannot be accepted A new signed TRIA form is required at each renewal Do not hold up sending issuance documents if you’re only waiting to get the TRIA form signed • The U.S. Treasury Department has been reasonable about allowing companies to rely upon documented established business practices, rather than specific risks, to demonstrate Page 17 of 36 compliance. As such, we are relaxing our approach. A reasonable attempt to obtain the signed disclosure notice should still be made but it is no longer necessary to follow up continuously. • • Cancellation: o Cancellation – Requires Company approval. Pro-rata return applies o Endorsement – TRIA may be endorsed midterm with Company approval, but no pro-rata charge is to be applied Unpaid Terrorism Premium: o In the event Terrorism coverage is accepted and the policyholder does not remit the Terrorism premium, the policy will be cancelled for non-payment of premium following our normal procedures. See separate guidelines for Cancellation. o NY State only: TRIA – MEP endorsements above 25% are ok, as long as the TRIA portion is only held to 25%. Doesn’t apply to special event, seasonal or exempted lines. Emailing Policies and Related Underwriting Documents to Company: • • • • Send only one policy per email and related attachments do not combine multiple policies in same email. o Policy documents (see section above) that apply to the same policy may be attached as separate attachments o File names for these separate attachments should NOT include any numbers Emailing: o Arizona: [email protected] o Colorado: [email protected] o Virginia: [email protected] Items specifically needing an UW’s response or attention should be sent to that particular UW’s attention. The above listed email boxes are for completed policies only, without any follow-up actions or items needed. Questions? Contact Business Support Services at 1-800-456-8458 extension 7281 or email: [email protected] Excluding Coverage – How to Indicate on Policy: • When guidelines advise to indicate ‘Excluded’ on a policy, do not use any variation other than ‘Excluded’. It is not acceptable to instead indicate “Not Covered”, “O”, “Zero”, “Not Applicable” or “N/A”. • See Underwriting – Forms Forms: Moving an Account to a Different Business Unit within the Company: • Changes over time may result in the need to move an account to another underwriting department. Contract Binding Authority must be contacted for approval. Policy Fees, Expense Constants and Taxes: • • • Policy fees are charged by the General Agent, not the Company. General Agent responsible for collecting and reporting all surplus lines taxes to appropriate regulatory authority All fees and surplus line taxes must be indicated on the Declaration page on all copies of policy. Do not combine the policy fee with the inspection fee on the Declaration page. Policy Number Assignments: • 1.14.2015 If using EDGE to rate, quote and bind your policies the system will automatically assign a policy when you go to policy issue. See policy numbering schema below. Page 18 of 36 • If you are not using EDGE to rate, quote and bind your policies you will need to obtain a block of policy numbers from Patty Runnels at 1-800-456-8458 or [email protected]. The block of policy numbers will follow the policy numbering schema below. Adding New Coverage Part to Policy Midterm: • If additional coverage parts are added midterm, a new policy prefix is applied at renewal, not midterm. Cancel and Rewrite: • Should a policy be canceled and rewritten, a completely new policy number is assigned Lapse in Coverage: • If there is a lapse in coverage, then an entirely new policy number must be assigned. New Business: • Policy numbering schema – example: 102 GL 1200101-02 o Business Unit = 102 o Cov. Symbol = GL o Digits = 1200101 o Renewal term = 02 Package Policies – Line of Business Combinations that Create a Package Policy • • • • • • • • • • Property + Liability Property + Crime Property + Inland Marine Inland Marine + Crime Property + Liability + Inland Marine Property + Liability + Crime Property + Liability + Crime + Inland Marine Liability + Crime Liability + Inland Marine Liability + Inland Marine + Crime Policy Prefixes: • • • • • • • The following will be preceded by the three digit designation for Contract CP – Monoline Property IM – Inland Marine FO – Farm & Ranch GL – Monoline General Liability Policy OCP – OCP Policies PKG – Multi-Peril Policy (Package) Renewals: • • Policy numbers should be carried forward from one renewal to the next. When doing so the suffix should be incremented forward. For example if the policy was -00, it should change to -01 at renewal. Entirely new policy numbers may be assigned at renewal, although this is highly discouraged. If an entirely new number is assigned the suffix will be -00 at renewal. Policy Numbers – Obtaining New Blocks of Numbers: • 1.14.2015 Applicable only when not using the Company’s EDGE system to issue your policy. If issuing within the Company’s system the policy number will automatically be assigned. Page 19 of 36 • Contact the Company for new blocks of policy numbers. Each agent is assigned a block of policy numbers to assign to policies they issue, and it is important not to assign numbers that go beyond the block you’ve been given. Policy Term – Annual or Short Term: • • 12 months except where noted as exceptions in underwriting guidelines for risks such as OCP, Special Events or Vacant. Submit all others. Policy extensions beyond 12 months require Company approval RATING EDGE Online Rater: • • • • • • 1.14.2015 Advantages of the EDGE rater: o Simplified rating o Policy specific forms list created for each quote o Even if you are not going to use EDGE to issue your policy, you still must use the EDGE Online Rater. The only exception is for those General Agents who have made prior arrangements with the Company to load our rates into their own proprietary rating system. Credit Authority: Subjective: o All available subjective credit authority is built into the EDGE Rater based on your individual user I.D. when you log into the system. If you have questions about your subjective credit authority contact your assigned Company Underwriter. Overrides for MEP or MP: o Agents have authority to increase the MEP, or the MP without Company approval o Authority to reduce the standard applicable MEP or MP resides with Company Underwriters only Quotes are retained for 120 days in the EDGE system Rating detail in EDGE o Step 1 Two Business Categories drive separate rating systems. You must select one or the other when entering the EDGE rater: • Farm and Ranch • Standard Lines of Business o Step 2 Each Business Category has a unique set of rating choices to select from: • Farm and Ranch o Farm Liability o Farm Property o Additional Policy Coverage o Premium Summary • Standard Lines of Business o Liability (if you have liability rate this line-of-business first) o Property o Inland Marine o Crime o Additional Policy Coverage o Premium Summary Page 20 of 36 Commissions: • • Refer to your General Agency Agreement or contact the Company General Agents do not have authority to override standard commissions. Non-standard commissions require Company approval. Endorsement – Edition Date for Rates that will be Applied: • • Endorsement of changes to exposures in place at policy inception will have the rates in effect at inception applied to the endorsement Endorsement of brand new exposures not in place at policy inception will have the rates in effect as of the effective date of the endorsement applied Minimum Earned Premium: • 1.14.2015 25% Minimum Earned Premium applies unless you have any of the following exceptions: o All States: OCP Policies (class code 16292) – 100% MEP Policies with the Snow & Ice Removal – Contractors (class code 99310) – 50% MEP Short-Term Policies (i.e. policy term is less than six months) – 50% MEP Vacant Building Policies: • Vacant Building – Factories (class code 68604) • Vacant Buildings – Not Factories – Not-For-Profit Only (class code 68607) • Vacant Buildings – Not Factories – Other Than Not-For-Profit (class code 68606) o 3 month policy term – 100% MEP o 6 month policy term – 50% MEP o 12 month policy term – 25% MEP o Texas only: Policies with one of more of the following Restaurant Class Codes: • Restaurants Buffets – With No Sale of Alcoholic Beverages o (class code 16952) – 50% MEP • Restaurant Buffets – With Sale of Alcoholic Beverages that are Less Than 30% o (class code 16950) – 50% MEP • Restaurants – Operated by Concessionaires – Not-For-Profit Only o (class code 16820) – 50% MEP • Restaurants – Operated by Concessionaires – Other Than Not-For-Profit o (class code 16819) – 50% MEP • Restaurants – with No Sale of Alcoholic Beverages – with Table Service o (class code 16900) – 50% MEP • Restaurants – with No Sale of Alcoholic Beverages – without Seating o (class code 16902) – 50% MEP • Restaurants – with No Sale of Alcoholic Beverages – without Table Service with Seating o (class code 16901) – 50% MEP • Restaurants – with Sale of Alcoholic Beverages that are Less Than 30% of the Annual Receipts of the Restaurants – with Table Service Page 21 of 36 o (class code 16910) – 50% MEP Policies with one of more of the following Roofer class codes: • Roofing – Commercial or Residential over Three Stories o (class code 98677) – 50% MEP • Roofing – Residential – Three Stories & Under o (class code 98678) – 50% MEP Multi-Peril / Package Combinations Eligible for Package Credits: • A 10% credit applies to Multi-Peril / Package Policies with the following line-of-business (LOB) combinations, and the policy prefix is ‘PKG’: o Property + Liability o Property + Crime o Property + Inland Marine o Inland Marine + Crime o Property + Liability + Inland Marine o Property + Liability + Crime o Property + Liability + Crime + Inland Marine o Liability + Crime o Liability + Inland Marine o Liability + Inland Marine + Crime Policy Level Coverage vs. Policy Level Premium Charges: • • TRIA is a policy level premium charge, but the coverage forms are separately specific to the property line-of-business and the liability line-of-business. Identity Recovery is a policy level coverage, but the premium charge is made at a line-ofbusiness level. For risks that are not on farm policies the charge is made on the property line-of-business. For risks that are on a farm policy the premium charge is made on the farm liability line-of-business. Premium – Definitions: • • • Annual Premium – Premium for Annual Term Premium – Actual Premium for the Term. o Example: Annual Premium is $100 – Six Month Term Premium is $50 Written Premium – the amount of premium recorded for a policy at the time it is issued o Earned – Part of a policy’s written premium is expressed as earned premium. This is the part of the premium that corresponds with the expired portion of the policy – the amount of coverage the policyholder has already used. o Unearned – The part of the policy overage that has not yet expired corresponds with unearned premium. In most cases, the unearned premium has been paid for, but has not yet been used Premium Rounding: • • Within the rating algorithm programs in the background rounding is to 3 digits Final rate is rounded to 2 digits Renewal Rating: • 1.14.2015 Those who actually issue their policies through the online rating system can easily pull forward their expiring exposures. The EDGE system will apply the most current rates and pull the most current forms. You are not allowed to carry forward the expiring policy rates and apply them to a renewal whether you issue through the EDGE system or not. Page 22 of 36 RULES FOR FORM ATTACHMENT, CANCELLATION OR NON-RENEWAL, SLB DATA FORMS, TAXES AND FEES Form Attachment Rules: • • All forms except CX and NRN: o Based on whatever states the insured has exposures in. If there are multiple states then all forms for those states are to be attached. CX and NRN: o The insured’s mailing address determines which CX and NRN forms are attached Definitions: Home State: • • The General Agent determines which state will be the policy’s designed ‘Home State’ Taxes and fees are paid to the ‘Home State’ Mailing Address: • • • May or may not be where the business is located Determines which CX and NRN forms are attached to the policy Mid-term changes to the insured’s mailing address: o Will not result in changes to state specific forms on the policy until the next renewal. If state specific forms must be changed before then, then a cancelrewrite is the only way to accomplish this. Main State / Primary State • • • This designation is for reporting purposes only Primary State defaults to the state designed in the ‘Location 1’ address on the policy General Agent has the authority to change the Primary State State of Domicile • • • • EDGE does not have a “Sate of Domicile” filed, but does have a Primary State” field (see above) Because applications do not provide ‘state of domicile’ information the insured’s mailing address is used to determine which CX and NRN forms are attached to the policy Corporations: o State of incorporation All Others: o State where the company is headquartered, or the location that is the principle place of business or the hub of operations SLB Data Form: • General Agents with a home / main office and branch / satellite office(s): o Branch / satellite has their own separate agency code: SLB Data Form rules apply using the branch / satellite location address o Branch / satellite does not have their own separate agency code: SLB Data Form rules apply using the home / main office location address • Quotes: New Business, Renewal, Midterm: o Premium charge for Terrorism must be shown separately on the quote o The appropriate Policyholder Disclosure Notice of Terrorism Insurance Coverage must be attached to all quotes, including midterm quotes TRIA 1.14.2015 Page 23 of 36 May be endorsed midterm with Company approval, but no pro-rata charge is to be applied, flat premium charge applies Issuance: o The coverage for terrorism on the policy will be tailored to fit the insured’s acceptance or rejection of the coverage o The premium charge for terrorism coverage is to be shown on the Common Policy Declarations Page o The premium will never change during the policy term o A signed copy of the Policyholder Disclosure Notice of Terrorism Coverage either accepting or rejection should be forwarded to the Company when sending the completed policy o Another Insurer’s Policyholder Disclosure Notice of Terrorism Coverage cannot be accepted o A new signed TRIA form is required at each renewal o Do not hold up sending issuance documents if you’re only waiting to get the TRIA form signed The U.S. Treasury Department has been reasonable about allowing companies to rely upon documented established business practices, rather than specific risks, to demonstrate compliance. As such, we are relaxing our approach. A reasonable attempt to obtain the signed disclosure notice should still be made but it is no longer necessary to follow up continuously. Cancellation: o Cancellation – Requires Company approval. Pro-rata return applies o Endorsement – TRIA may be endorsed midterm with Company approval, but no pro-rata charge is to be applied Unpaid Terrorism Premium: o In the event Terrorism coverage is accepted and the policyholder does not remit the Terrorism premium, the policy will be cancelled for non-payment of premium following our normal procedures. See separate guidelines for Cancellation. o NY State only: TRIA – MEP endorsements above 25% are ok, as long as the TRIA portion is only held to 25%. Doesn’t apply to special event, seasonal or exempted lines. o • • • U884 – is a mandatory Conditional Terrorism Exclusion for the following: • CGL LOB • Farm/Ranch Liability LOB • OCP U885 – is a mandatory Conditional Terrorism Exclusion for the following: • Commercial Property LOB • Farm/Ranch Property LOB • Commercial Inland Marine Based on the above this is how the rules would work: • Pkg Policies – U884 and U885 • • • • 1.14.2015 Farm/Ranch – U884 and U885 (we would just attach both forms regardless since the policy prefix for farm is the same whether monoline or package) Monoline GL – U884 OCP – U884 Monoline CIM – U885 Page 24 of 36 For policies where TRIA was rejected the ILP001-0104 – U.S. Treasury Department’s OFAC Advisory Notice should have been issued. UNDERWRITING Authority: • • General Agent Authority Grant is defined within the guidelines found within the online Contract Underwriting Guide, the General Agency Agreement and/or any other written agreements Transfer of Authority: o Any authority granted herein or contained in the General Agency Agreement is not transferable to any other party without the express written consent of the Senior Marketing Officer of the Company. Backdating: • General Agents do not have authority to backdate unless the EDGE system allows backdating. An example of that is a binder received over the weekend and the need to bind coverage back to the previous Friday. This can also occur with reinstatements related to payment of premium. In most other cases Company Underwriter approval will be needed to backdate. In general Contract does not approve backdates. Bulletins and Flyers: • A list of all bulletins and flyers are found by accessing the Company portal’s Contract section Forms including CX, NRN, State Specific, and SLB Data: • • • • • • 1.14.2015 De-selection of pre-checked forms on an EGDE form’s list related to a specific quote require Company Underwriter approval in all cases Forms (ISO or Company), including the specific edition date must be listed in the most current Contract forms library. If not Company approval is needed to use a form not listed or a form with an edition date not listed. Use of available forms from the Contract forms library on a specific account must be per all of Contract’s attachment rules and guidelines. If the form is not normally available for the type of business in question you must get Company approval for non-standard use of the form. Changing the terms and conditions of any form by deleting or adding manuscript language is prohibited Form attachment rules are based upon whatever states are included in the coverage grant. If there are multiple states on the coverage grant, then all forms for those states are to be attached to the policy with the sole exception of cancellation/nonrenewal forms. Cancellation/Nonrenewal Forms: o Only the Cancellation and Non-renewal forms that are tied to the insured’s ‘state of domicile’ are to be attached to the policy. The EDGE system will attach either the mailing-address-state related forms, or at least one risk-state (i.e. a state on the location list) for the applicable forms. o The ‘state of domicile’ is defined as: Corporations or LLC’s • State where the business is incorporated or chartered Joint Ventures, Non-Profits, Partnerships, Sole Proprietors, Trusts • State which is the principal place of business, meaning the location of its day-to-day operations • When the day-to-day operations are conducted fairly evenly in more than one state, the principal place of the business is the commercial domicile. o Mailing Address: Page 25 of 36 The mailing address state may or may not be the state where the insured has exposures or interests, and/or pays taxes and fees See additional guidelines under “Endorsements – Changes in Mailing Address – Midterm” Named Insured: Defined • Persons or organizations to which insurance coverage is expressly provided. Name Insureds are listed on the relevant block of the policy’s declarations page. Although the named insured is commonly one person, partnership, corporation or other entity with insurable interests, multiple insureds may be included. Underwriting the Named Insured: • General Agent’s must underwrite each of the Named Insureds and understand the full scope of their operations and exposures ATIMA – Prohibited for use in the Named Insured Combinability of Interests on the same policy: • • • Avoid issuing more than one policy for the same Named Insured unless you have Company approval. It is within your authority to issue a monoline commercial property policy and separate farm liability policy for the same Named Insured. Combinability requires that majority common insurable interests exist between the various entities, majority meaning 51% or more ownership in each entity (with an exception for Joint Ventures) More than one Named Insured may be included on a policy, and they may consist of any single or combination of business entity types (individuals, partnerships, joint ventures, corporations, associations, limited liability corporations or some other type of legal entity) DBA’s: • • A ‘DBA’ is not a legal entity. The Named Insured should never just be the DBA alone. The DBA is just a business name that is shown in ADDITION to the legal entity that is the Named Insured. First Named Insured: • The ‘first named insured’ is the first name listed on the policy declarations (the front page of the policy). This designation creates the following rights and responsibilities associated with “first named insured” status that do not apply to other “‘named insureds”: o Ability to act as the legal agent for all the ‘named insureds’ on the policy with ability to cancel, request policy changes including adding additional entities (subject to Company approval) or accept return premiums (if any) o Notice of loss requirements o Receive copies of the policy o Receive notifications of CX or NRN o Receive return premiums obligations to the Company including additional premiums related to premium audits or endorsements. The failure of the first named insured to pay the premium can result in coverage being cancelled for all named insureds, not just the first named insured. Holding Companies: • • 1.14.2015 In general we are not a market for holding companies, nor do we normally approve adding a holding company as a ‘named insured.’ Including a holding company as a ‘named insured’ requires Company approval. Background: Page 26 of 36 o o o A holding company is a parent company that owns enough voting stock in a subsidiary to dictate policy and make management decisions. This is generally done through influence of the company’s board of directors. This doesn’t mean that the holding company owns all of the subsidiary’s stock, or even a majority of it. Holding corporations are typically created to protect business assets, including equipment, machinery or intellectual property. In this arrangement, the holding company actually owns the business’s assets, but leases them to the operating company. Responsibility – The subsidiary and holding companies are separate legal entities; each may be sued by other companies or may sue others. However, the parent company has the responsibility of acting in the best interest of the subsidiary by making the most favorable decisions that affect the management and financials of the subsidiary company. The holding company may be found guilty in a court, for breach of fiduciary duty, if it does not fulfill its responsibilities. The holding company and the subsidiary are perceived to be one and the same if the holding company fails to fulfill its fiduciary duties to the subsidiary company. Both companies would share liabilities incurred by the other. In the event of a serious loss incurred by one of the companies being held, it is not unusual for the Holding Company to be named in the suit resulting in potentially high defense costs if nothing else. Named Insured Changes – Endorse or Cancel/Rewrite – See instructions below: Scenario Example Endorsement or Cancel/Rewrite Corporate or LLC name addition “ABC, LLC” to “ABC, LLC and XYZ Construction Management, LLC” Endorsement if common ownership, and insurable interest – Verify combinability – Underwrite the new entity’s operations Corporate or LLC name change with the same ownership. “ABC, Inc.” to “XYZ Construction Management, Inc.” Cancel/Rewrite – Underwrite as a new account Corporate or LLC name change with different ownership. “ABC, Inc.” to “XYZ Construction Management, Inc.” Cancel/Rewrite – Underwrite as a new account DBA Change “John Smith DBA XYZ Construction” to “John Smith DBA JKL Construction” Endorsement – Underwrite operations of the new DBA name Individual Change “Frank Smith DBA XYZ Construction” to “Paul Jones DBA XYZ Construction” Cancel/Rewrite – Underwrite as a new account 1.14.2015 Page 27 of 36 Scenario Example Endorsement or Cancel/Rewrite Partnership Name Change with ownership remaining the same “Rivertown Properties” to “Rivertown Management” Endorsement – Underwrite the operations of the new entity Partnership Name Change. New partners or different partners. “Rivertown Properties” to “Rivertown Management” Cancel/Rewrite – Underwrite as a new account. Typo Correction “Smit Construction, Inc.” to “Smith Construction, Inc.” Endorsement Types of Named Insured Entities: • • • • • 1.14.2015 Corporation: o The most formal type of business organization requiring registration with the state and certificates of authority to do business in that state. The corporation is considered by the law to be a separate legal entity, a separate ‘person’. Shareholders are the owners but are not personally liable for the actions of the corporation. o The Named Insured should only indicate the corporation and any DBA name of their operation. Do not list the individual officers as Named Insureds Joint Venture: o Association of one or more persons or corporations to carry out a single business enterprise for profit without actual formation of a legal partnership or corporation. They are established for a definite period and for a definite deal or purpose. Most often used in construction development projects. Named Insured should not list individual names unless the name of the joint venture includes their names. Limited Liability Company (LLC): o Business structure allowed by state statute, which is more like a hybrid entity of a corporation and a partnership. LLC’s are popular because, similar to a corporation, owners have limited personal liability for the debts and actions of the LLC. Other features of LLC’s are more like a partnership, providing management flexibility and the benefit of pass-through taxations. Owners of an LLC are called members. Members may include individuals, corporations, or other LLC’s and even foreign entities. Most states also permit “single member” LLC’s, those having only one owner. Coverage extends to members, but only with respect to the conduct of the insured’s business. Coverage also extends to managers but only with respect to their duties as the insured’s managers. Do not list these individuals as Named Insureds. Partnership: o Exists when two or more persons agree to enter business together on negotiated terms. Most partnerships are a business entity which is separate from the activities of the individual partners. Do not list individual names unless the name of the partnership includes their names. Sole Proprietorship: Page 28 of 36 o o • Trust: o The simplest and most common form of business enterprise. It is owned and managed by one person and exists as an extension of the personal life of that person. The sole proprietor is personally liable for all business liabilities. The sole proprietor’s wife or husband do not need to be listed as part of the Named Insured since he/she will be considered to be insured, but only insured in relation to conduct related to the business. An arrangement where one person or entity has the legal title to property under an agreement to administer the property for the benefit of someone else (termed the beneficiary) who has equitable title to it. New Ventures: • • In most cases new ventures are acceptable. New ventures are defined risks whose operation(s) have been in existence under the same ‘named insured’ for less than 3 years. Sometimes guidelines will indicate a need for an insured to have at least 3 years prior related business experience in order to be acceptable as a new venture. An example of this would be a roofer. Prohibits – All Lines of Business: • • • • • • • • • • • Any classification or exposure listed as prohibited in the underwriting guide Bridge or tunnel exposures Electrical wiring if aluminum (including pigtailed, fuses instead of circuit breakers; or knob and tube wiring Fireworks or pyrotechnics Marine exposures if they include: o Barges o Ocean Marine o Submarines Manufacture of herbal dietary or medicinal products, neutra-ceuticals, topical products applied to skin or hair Offshore exposures Property in a deteriorated condition, condemned or has unrepaired damage Towers exposures if they exceed 76 feet Wind – property that does not qualify based on territory specific guidelines Wood stoves used as primary or supplemental sources of heating Quote Status Documentation: • 1.14.2015 In the EDGE system you may indicate the status of a quote as any of the following: Lost BOR Lost Broker didn’t submit requested materials Lost Broker lost Lost No response Lost Pricing Lost Terms / Conditions Page 29 of 36 Declined Can’t complete Declined CAT load – Cost prohibited / Exposure Undesirable Declined Loss prevention concerns Declined Need admitted paper Declined Risk characteristics Declined Risk unacceptable – claims activity Not Quoted BOR Not Quoted Broker lost Not Quoted Incomplete Submission Not Quoted Need admitted paper Not Quoted No response Not Quoted Placed elsewhere Not Quoted Referral to another Division Not Quoted Risk unacceptable – claims activity Not Quoted Stayed with incumbent Not Quoted Submission received by another ARGO Business Unit Renewal Underwriting: • Rating: o Do not carry rating worksheets from prior term forward, always re-rate renewals using most current rates. o Using the Company’s rating program allows you to import all expiring rating data to speed the creation of a renewal quote o Consult with the Company on the application of any subjective rate credits. Renewal Certificates are not used in Binding Authority • • • • 1.14.2015 General Agent is to check in with insured prior to each renewal to see if there are any changes in exposures and/or rating bases used for premium calculations A renewal quote should be generated if for no other reason than to generate a list of the most current forms (including edition dates) that will apply to the renewal Submit Required: o Any A&B claim (paid or not) o Guideline changes have resulted in the risk falling outside of General Agent authority and thus requiring submit for the renewal o Loss frequency exceeds 3 losses in 3 years and/or any one loss exceeds $5000 Submit Not Required: o Underwriting guideline exceptions already on file from the prior term may be carried forward without re-referral. An exception to this would be if the Company is exiting a class of business, such risks cannot be renewed Page 30 of 36 States East of the Mississippi vs. West of the Mississippi: • When underwriting guidelines are noted as applying east vs. west of the Mississippi River this map shows which side a state is on. The only exception is that IL and WI are considered western states in Contract. Submit Criteria – New or Renewal: • • • • • • • Cancelled or non-renewed in the past 3 years Government (including Military) entity exposures Losses but only if there are: o In the past 3 years: Claim(s) above $5,000 Three or more o In the past 5 years claims involving the following regardless of size: Abuse or Molestation Assault and Battery Payrolls exceeding $250,000, unless noted otherwise in class code guidelines Receipts over $5,000,000, unless noted otherwise in class code guidelines Remodeling or renovation exposures unless notes otherwise in class code specific guidelines. All renovation prohibited in Five Boroughs of NYC. o Risk characteristics do not meet all underwriting guidelines o Structures over 6 stories o Subcontractor exposures exceeding 25% of total operations, or subcontractor costs exceeding $1,000,000 unless noted otherwise in class code guidelines Any risk where insured will be acting as their own General Contractor See also ‘Renewal Guidelines’ above Territory (including International Exposures): • • • 1.14.2015 General Agent’s underwriting territory is defined in the General Agency Agreement The Company writes in all 50 states with restrictions that are noted in the underwriting guidelines International exposures for property and/or liability are not written in Contract. o Places like Canada, Puerto Rico and the U.S. Virgin Islands are all considered “international” Page 31 of 36 • U.S. based risks that manufacture products that meet our underwriting criteria and happen to sell products to ‘international customers’ are acceptable subject to the following: o Verification that all overseas exposures are covered by another carrier with potential exceptions for product liability per the below: If the product meets Contract’s underwriting guidelines for domestic sales it will be acceptable for product liability related to international sales If international sales are covered by another policy be sure to delete those receipts in the rating process, if not then international receipts would be rated for under Contract’s policy o A Company Underwriter has approved Weather Related Bulletins – Cease Binding – Moratoriums – Archives: • • • • • • 1.14.2015 No new business or increased amount of insurance shall be bound or written when a hurricane or tropical storm is within 200 miles of the location’s State coastline During a catastrophe the Company may issue Cease Bind bulletins if the catastrophe might have severe loss potential. The bulletins will have specification information regarding the type of catastrophe and the state/country(s) impacted. Moratoriums remain in effect until officially withdrawn. The following are triggered during a cease bind period: o New business: Binding authority suspended in the impacted area for the line or lines of business indicated in the bulletin. o Active Business: Endorsement of increased amounts of insurance or additional coverage suspended. Exception would be if General Agent has quoted and received payment prior to receiving the cease binding notification. o Renewal Business: Terms and conditions must remain unchanged with no increase in limits unless General Agent has quoted and received payment prior to receiving a cease binding notification. Moratoriums remain in effect until officially withdrawn. See Company website: www.colonyspecialty.com. If uncertain whether moratorium is still in effect contact Company. National Hurricane Center updates: www.nhc.noaa.gov Moratorium of Coverage – Archives: o To locate the ‘Moratorium Archives’ login to the Company website. In the upper right corner of the first screen is a ‘quick-link’ ‘PRODUCTS & SERVICES.’ Click here there and then look for ‘DIVISIONS’ on the next screen (near the top). Links to bulletins, fliers and editable fliers, hit-lists and histories of on-line guide changes also here. Page 32 of 36 GUIDELINES – ADMINSTRATIVE, GENERAL, MARKETING, REPORTS Accounting – Payments to Company: Payments: • You must pay the premium due Company within terms of the Agency Agreement. Unless otherwise stated, the following apply: o Payment must be on net basis with commissions retained by the Agent. o Payment on account current is due in Company’s office within 45 days after the end of the month in which the premium was entered on agent’s account current statement. Example: premium for all policies and endorsements issued between September 1 and September 30 is due to Company by or before November 15. If the 15th of the month falls on a holiday or weekend, premium is due the preceding Friday. o Omission from account current of any items due Company will not modify or affect the responsibility of the Agent to account for and pay Company any and all net premiums. Electronic Transfer of Funds: • • • Available but you must instruct your bank to electronically transfer the Account Current balance to the Company's bank each month. You control the amount and the date of funds transfers. Contact Company’s Agency Accounting Department for additional information. Advertising and Marketing: • • Refer to your General Agency Agreement for details relating to broadcasting, publishing or distributing materials or other matter, including marks or logos. The Company offers many ways to advertise and market Company products to customers. To locate marketing brochures login to the Company’s Website. In the upper right corner of the first screen is a ‘quick-link’ ‘PRODUCTS & SERVICES’. Click your mouse there and then look for ‘DIVISIONS’ on the next screen (near the top). Links to bulletins, fliers and editable fliers, hit-lists, histories of on-line guide changes and moratorium archives also here. Agency Code Number: • A unique agency code is assigned by the Marketing Department to all Contract Binding Authority eligible Agents. This code must be indicated on all policies issued on the Company’s behalf. Agency Profile Reports – Premium and Loss Information: • Special access code required. Contact Marketing for access: o Midwest – Dave DeCosta – [email protected] – 312-849-6989 o Northeast – Jennifer Sanchez – [email protected] – 212-607-8882 o Southeast – Mark Rooker – [email protected] – 804-560-3580 o Texas – Sam Anderson – [email protected] – 804-560-3003 o West – Tanisha Woodard – [email protected] – 303-773-7327 Agency Underwriting File Reviews: • • • At the Company’s discretion there may be reviews of your General Agency account files. When completed, copies of the review will be provided to you. Reviews may be conducted on your premises and/or ours. Annual Company Report: • 1.14.2015 https://www.argolimited.com/static/annual_report/ Page 33 of 36 Company Help Desk: • If you are having problems with the Company website and/or Contract’s underwriting guide please call 866-487-8287 or email [email protected] Complaint Handling Procedures: • • • • The Argo Group Corporate Legal Department advises that all of the insurers within Argo Group US, Inc’s corporate structure are required by certain state statutes/regulations to maintain a record of all complaints that are received by an insurer and the responses to such complaints that are submitted to a regulatory authority by an insurer. The Regulatory Compliance Management for the Argo Group Corporate Legal Department has been established as the only point of contact for the receipt of all complaints and inquiries from various regulatory authorities and agencies, including Departments of Insurance and the state Offices of the Attorney General. If you receive this type of complaint or inquiry, please immediately forward it to: o [email protected] When a complaint is forwarded, you should also request a confirmation by reply e-mail that it has been received by Regulatory Compliance Management. Please do not contact the Departments of Insurance or other regulatory authorities or agencies directly. Upon receipt of a complaint or inquiry an Argo Group Corporate Legal Department Regulatory Compliance Specialist is assigned to coordinate the preparation and submission of each complaint or inquiry response. Each complaint or inquiry response is also reviewed and approved by the SVP – General Counsel and Chief Claims Officer Legal prior to submission to the regulatory agency or authority. If you are contacted by a Department of Insurance or other regulatory authority or agency, please refer the individual who has made the contact to: o AVP, Sr. Regulatory Counsel [email protected] PO Box 469011 San Antonio, TX 78246 (Phone) 210-321-6817 DocuCorp Download Instructions and Updates: • • • DocuCorp updates will be announced 60 days prior to implementation. Instructions for downloading individual DocuCorp updates are released the same date the form changes are effective. History of DocuCorp updates is found under the ‘Forms’ icon of this guide. Expiration / Renewal Lists: • • Contact your Company underwriter for questions about expiration lists. General Agent is solely responsible to notify Insured(s) of their policy expiration and send any required legal notification on nonrenewal. Hit Lists – Binding Success Stories: • To locate ‘Hit Lists’ login to the Company’s website. In the upper right corner of the first screen is a ‘quick-link’ ‘PRODUCTS & SERVICES.’ Click your mouse there and then look for ‘DIVISIONS’ on the next screen (near the top). Links to bulletins, fliers and editable fliers, histories of on-line guide changes and moratorium archives are also here. Licensing Requirements: • • 1.14.2015 General Agent’s responsibilities are found in the General Agency Agreement. The Company’s Regulatory Compliance Department will request copies of all licenses to be maintained in the General Agency Contract file. Page 34 of 36 Mailing Address: • Regardless of location all incoming USPS mail should be sent to: o P.O. Box 469012, San Antonio, TX 78246 Office of Foreign Asset Control – OFAC: • • • • • • ILP001 – U.S. Treasury Department’s Office of Foreign Assets Control (i.e. OFAC) – Advisory Notice Policyholders o EDGE automatically includes this notice on all policies issued out of Contract Binding as it is a mandatory notification In 2001, the U.S. Department of Treasury, Office of Foreign Assets Control (OFAC), issued regulations prohibiting insurers, brokers, and agents from engaging in transactions with individuals and entities appearing on the “Specially Designated Nationals and Blocked Persons List” (SDN list) published by OFAC. OFAC regulations prohibit insurers and agents from providing any service to an “SDN” or Blocked Person. All property, including insurance contracts, in which there is direct or indirect interest with any person or entity on the blocked list, is considered “frozen”. Any funds involved in these transactions must be deposited into a special account arranged for by the insurer with OFAC. This includes unearned premiums and claim payments. Company requires that prior to binding coverage you will check the Treasury’s SDN list to ensure the applicant’s name does not appear. Should your office receive an applicant that has an exact name match to an “SDN”, you are prohibited from binding coverage or issuing a policy until you receive further direction from Colony Specialty’s Regulatory Compliance staff. The “SDN” list is available for download directly from the Department of Treasury’s website, www.treas.gov/ofac, in the following formats: PDF, delimited, fixed-widths, CSV and XML. The Treasury updates the list periodically. If the list is downloaded onto your proprietary system, you need to download the updated list monthly to ensure the most current information is on file. The list is also available thru the Agents’ Area of Colony Specialty’s website. Please note there are vendors such as Bridger Insight and ISO that can automate the process of detecting potential blocked persons. Direct questions or comments to our regulatory compliance staff at 800-577-6614. Password – Access to Online Contract Underwriting Guide: • • Passwords are required to access the Company’s website. A unique password is provided to the Agency by the Company’s Marketing Department. Distribution and control of passwords among individual Agency staff is controlled by the Agency. Privacy Policies: • Information about the Company’s privacy policies and requests to see and/or correct a customer’s personal information are available by writing to Privacy Coordinator, Colony Specialty, P.O. Box 469012, San Antonio, TX 78245. Product Navigator: • Product Navigator offers a searchable database that covers all segments of ARGO Group including products, services and contact information. o http://www.argolimited.com (Portal to entire ARGO organization) o https://www.argolimited.com/pages/our-companies/colony-specialty (Portal to Colony Specialty) Regulatory Compliance: • 1.14.2015 Department of Insurance (DOI) Complaints: o Complaints received from the Department of Insurance must be referred to the Company prior to any response to the DOI. Page 35 of 36 Fax or email a copy of complaint and your draft response to the Company’s Regulatory Compliance Department at: [email protected] or 804-327-3173. State Reporting Requirements: o The Departments of Insurance in many states require that our companies file an annual report of written premiums by broker, with an indication of the name, address and license number of the broker who paid the surplus lines tax on each policy. o For business written in your home state (domicile state), we report your agency as the surplus lines broker. For business written outside of your home state, or risks having locations in multiple states, we must obtain a SLB form (see below) so that we can accurately report this information. o If we do not receive the completed SLB form as required, in January our Compliance Division will send you a listing of such policies and request that you indicate through whom the taxes were paid. If we report that your agency paid the taxes, when in fact they were paid by another broker, the Department of Insurance will no doubt be contacting you to resolve the discrepancy. o If your agency consistently writes outside of your home state, please contact us. Writing Admitted Business: o If you are a General Agent with binding authority to write business with a licensed ARGO Group Company, in addition to holding the required P & C license, the General Agent will need to maintain an appointment by the Company with the State Department of Insurance. Writing Surplus Lines Business as a Non-Resident Broker: o State laws require that the Company accept business only from properly licensed surplus lines brokers in the states where risks are located. If uncertain about a state’s requirements, contact the applicable Department of Insurance before placement of coverage with the Company. o Wyoming – Reasonable policy fees may be charged in the state of Wyoming and shown on the Declarations page. Fees are treated as a premium and applicable taxes apply. o • • • 1.14.2015 Page 36 of 36
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