Coverholder Audit - Pro Global

Coverholder Audit

An Audit 360 Case Study.

News

February 1, 2021

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The Requirement 

  • Client uses an overseas Coverholder to bind yacht risks on their behalf
  • Overseas Coverholder was found to be committing serious breaches of their delegated underwriting authority including continuing to bind risks even though Underwriters had given notice of cancellation of the Binding Authority Agreement several months before.
  • Client required a full investigation to determine the extent of the breaches which covered underwriting, claims, accounting, reporting and compliance.

 

Our Solution

  • Provided a team comprising multi lingual subject matter experts from across Pro’s European offices.
  • Assistance was given by Underwriters who allowed a senior member of their delegated underwriting team to complement the team.
  • Provided with analysis of underwriting data to undertake a file selection.
  • Onsite visit to review underwriting and transactional records, data and systems.
  • Forensic accounting techniques were used to determine the extent of the unaccounted premiums stretching back over several years.
  • Discussions were held with Lloyd’s representative in the local country to determine reporting failings of the Coverholder.

 

Services Delivered

  • A comprehensive audit report was provided to Underwriters following the site visit. This included a summary of the issues, provided evidential support for recommendations and a detailed explanation of the work that was undertaken.
  • The client were paid premiums due which had neither been reported or paid stretching back over several years.
  • As a result of the audit, the Coverholder’s policyholders interests were safeguarded.
  • A structured plan was designed to minimise the likelihood of further breaches.
  • Having commissioned an independent audit, the client was better able to reassure Lloyd’s that positive actions were being undertaken which would ensure the Lloyd’s brand was not being tarnished.

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