If a second underwriter asks for more premium than the first, what should the broker do?

If a second underwriter asks for more premium than the first, what should the broker do?

• A. Return to the first underwriter to negotiate
• B. Not approach the first underwriter as it contravenes BIPAR rules
• C. Request increases from both underwriters
• D. Accept the second underwriter's terms only

Answer: (B)

In situations where a second underwriter proposes a higher premium than the first, it is essential for the broker to adhere to regulatory and industry standards. BIPAR (the European Federation of Insurance Intermediaries) sets forth principles that guide the conduct of intermediaries, ensuring transparency and fair practices. By not approaching the first underwriter again, the broker respects the established rules of engagement, which promotes a healthy market environment. This adherence to ethical standards is crucial in maintaining trust among underwriters and preventing potential conflicts or misunderstandings. The broker's role includes ensuring fair treatment of all parties involved, and following these rules protects both the integrity of the insurance market and the interests of clients. In contrast, other options may lead to complications or breaches of these standards, so understanding and following the principles set by organizations like BIPAR is vital for operating within the insurance industry.

In situations where a second underwriter proposes a higher premium than the first, it is essential for the broker to adhere to regulatory and industry standards. BIPAR (the European Federation of Insurance Intermediaries) sets forth principles that guide the conduct of intermediaries, ensuring transparency and fair practices.

By not approaching the first underwriter again, the broker respects the established rules of engagement, which promotes a healthy market environment. This adherence to ethical standards is crucial in maintaining trust among underwriters and preventing potential conflicts or misunderstandings. The broker's role includes ensuring fair treatment of all parties involved, and following these rules protects both the integrity of the insurance market and the interests of clients.

In contrast, other options may lead to complications or breaches of these standards, so understanding and following the principles set by organizations like BIPAR is vital for operating within the insurance industry.