Insurance underwriting

process
Objective
To provide knowledge and understanding of the role of underwriting including identification,
assessment and acceptance of risk, rating and relevant financial factors.

Summary of learning outcomes Number of questions

in the examination*

1. Understand the material circumstances relating to the insurance underwriting 5

process.

2. Understand underwriting procedures relating to the insurance underwriting process. 15

3. Understand insurance policies in relation to the insurance underwriting process. 10

4. Understand renewals and cancellation in relation to the insurance underwriting 3

process.

5. Understand personal insurances in relation to the insurance underwriting process. 3

6. Understand commercial insurances in relation to the insurance underwriting process. 3

7. Understand the main ‘support’ type insurance services available. 2

8. Understand underwriting considerations in relation to the insurance underwriting 13

process.

9. Understand the principles and practices of pricing. 10

10. Understand pricing factors within the context of the insurance underwriting process. 5

11. Understand managing exposure within the context of the insurance underwriting 6
process.

* The test specification has an in-built element of flexibility. It is designed to be used as a guide for study and is not a statement of actual
number of questions that will appear in every exam. However, the number of questions testing each learning outcome will generally be within
the range plus or minus 2 of the number indicated.

Important notes
• Method of assessment: 75 multiple choice questions (MCQs). 2 hours are allowed for this
examination.
• This syllabus will be examined from 1 January 2022 until 31 December 2022.
• Candidates will be examined on the basis of English law and practice unless otherwise stated.
• Candidates should refer to the CII website for the latest information on changes to law and practice
and when they will be examined:
1. Visit www.cii.co.uk/qualifications
2. Select the appropriate qualification
3. Select your unit from the list provided
4. Select qualification update on the right hand side of the page
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Published October 2021

©2021 The Chartered Insurance Institute. All rights reserved. IF3
1. Understand the material circumstances 5. Understand personal insurances in
relating to the insurance underwriting relation to the insurance underwriting
process. process.
1.1 Explain why an underwriter needs to be aware of 5.1 Describe the basic features and typical policy cover
material circumstances in assessing a risk. of motor insurance, health insurance, household
1.2 Explain the concept of the duty of fair presentation, insurance, travel insurance and extended warranties.
to whom it applies and how the duty may be
modified. 6. Understand commercial insurances in
1.3 Define the words peril and hazard as used in the relation to the insurance underwriting
insurance industry and the relationship between process.
them. 6.1 Describe the basic features and typical policy cover
1.4 Explain the significance of moral and physical of property insurance, pecuniary insurance, cyber
hazard for underwriters and how they are insurance and liability insurance.
manifested.
7. Understand the main ‘support’ type
1.5 Describe the methods used by underwriters to obtain
material information.
insurance services available.
7.1 Describe the basic features of additional ‘support’
2. Understand underwriting procedures type insurance services available with specific
reference to help lines, authorised repairers and
relating to the insurance underwriting
suppliers, risk control/advice and uninsured loss
process. recovery services.
2.1 Describe the general and specific questions asked of
proposers. 8. Understand underwriting considerations
2.2 Describe the procedure relating to quotations. in relation to the insurance underwriting
2.3 Explain the methods by which underwriters gather process.
material information and their legal significance. 8.1 Describe the key underwriting criteria for motor
2.4 Describe the different ways in which premiums are insurance, health insurance and personal
calculated. insurances.
2.5 Explain the legal significance of procedures relating 8.2 Describe the key underwriting criteria for commercial
to the issue of cover notes, policies and certificates property insurance, including fire and special perils,
of insurance. theft insurance, glass insurance and money
2.6 Describe the relevance of premium payment for valid insurance.
cover. 8.3 Describe the key underwriting criteria for pecuniary
2.7 Describe the methods used by insurers to collect insurances, including legal expense insurance and
premiums including instalment facilities. business interruption insurance.

2.8 Describe the features of Insurance Premium Tax. 8.4 Describe the key underwriting criteria for liability
insurance, including employers’ liability, public
3. Understand insurance policies in relation liability, pollution liability, products liability and
professional indemnity.
to the insurance underwriting process.
8.5 Describe the key underwriting criteria for extended
3.1 Describe the structure, functions and contents of a
warranties.
policy form.
8.6 Describe the procedures commonly used to
3.2 Explain the meaning and significance of common
discourage individuals from making fraudulent
policy exclusions.
claims.
3.3 Explain the meaning and significance of common
8.7 Describe the procedures commonly used to detect
conditions.
fraudulent claims.
3.4 Explain how excesses, deductibles and franchises
8.8 Explain the consequences of fraudulent claims for
are used.
the insurer, their insureds and the fraudulent
3.5 Explain the distinction between warranties, claimant.
conditions and representations.
8.9 Explain the effect on insurance of data protection
4. Understand renewals and cancellation in legislation.
relation to the insurance underwriting 8.10 Explain the importance of the fair treatment of
customers and positive customer outcomes.
process.
4.1 Describe the legal significance of procedures relating 9. Understand the principles and practices
to renewals.
of pricing.
4.2 Explain how cancellation clauses operate. 9.1 Describe the sources, availability and types of data
essential to the underwriting process.
9.2 Explain the importance of claims information on
underwriting terms/premium rates.

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©2021 The Chartered Insurance Institute. All rights reserved.
9.3 Explain the nature of risk in terms of frequency and Reading list
severity of claims.
9.4 Explain the significance of the claims loss ratio on The following list provides details of further
premiums/acceptance of risk. reading which may assist you with your
9.5 Explain the distinction between underwriting year, studies.
policy year, accounting year and calendar year. Note: The examination will test the
syllabus alone.
10. Understand pricing factors within the
context of the insurance underwriting The reading list is provided for guidance
process. only and is not in itself the subject of the
examination.
10.1 Define risk premium and its key features.
10.2 Describe the reporting factors of expenses, return on The resources listed here will help you
capital, investment income, tax and intermediary keep up-to-date with developments and
remuneration. provide a wider coverage of syllabus topics.

11. Understand managing exposure within CII study texts

the context of the insurance underwriting Insurance underwriting process. London: CII.
process. Study text IF3.
11.1 Describe the basic factors influencing the market
cycle.
Books and eBooks
Bird’s modern insurance law. 10th ed. John
11.2 Describe the principles of risk accumulation.
Birds. Sweet and Maxwell, 2016.
11.3 Describe the basic reinsurance considerations
including the types of reinsurance. Insurance theory and practice. Rob Thoyts.
Routledge, 2010.*
‘Insurance intermediaries: underwriting
agents’ in Colinvaux’s law of insurance. 11th
ed. Prof. Robert Merkin. London: Sweet &
Maxwell, 2016.
Insurance law in the United Kingdom. 3rd ed.
John Birds. The Netherlands: Kluwer Law
International, 2015.
Pricing in general insurance. Pietro Parodi.
CRC Press, 2015.*
Periodicals
The Journal. London: CII. Six issues a year.
Post magazine. London: Incisive Financial
Publishing. Monthly. Contents searchable
online at www.postonline.co.uk.
Reference materials

Concise encyclopedia of insurance terms.

Laurence S. Silver, et al. New York:
Routledge, 2010.*
Dictionary of insurance. C Bennett. 2nd ed.
London: Pearson Education, 2004.

* Also available as an ebook through eLibrary via www.cii.co.uk/elibrary (CII/PFS members only).

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 Examination guide
If you have a current study text enrolment,
the current examination guide is included
and is accessible via Revisionmate
(www.revisionmate.com). Details of how to
access Revisionmate are on the first page of
your study text. It is recommended that you
only study from the most recent version of
the examination guide.

Exam technique/study skills

There are many modestly priced guides
available in bookshops. You should choose
one which suits your requirements.

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