Start from your underwriting authority letters. The agent quotes standard risks inside rating guidelines; anything outside guidelines is held for an underwriter with authority for that class and limit. Binding cover needs the underwriter. Declines are decided by a person. Pricing outside guidelines needs a senior underwriter. Every authority depends on a certificate that is current on the day.
What does the underwriting approver rule cover, and who owns it?
Underwriters decide which risks to accept and at what price. Agents help by reading submissions, pulling loss history and external data, rating standard risks against guidelines, drafting referral notes and preparing quotes and policy documents. Underwriting authority is already written down, usually as personal authority letters by class of business and limit. The approver rule maps the agent's held actions onto those letters.
The chief underwriting officer owns the rule. Compliance and pricing sign it off. The agent owner configures it. Our explainer on what an agent approver is covers the role, and our guide to AI agent skills by role covers what underwriters need to know.
What are the steps?
- Chief underwriting officer: lists the agent's actions by depth. Depth 1: reads submissions, loss runs, property and vehicle data. Depth 2: drafts referral notes, quotes outside guidelines and decline letters. Depth 3: requests missing information, issues quotes for standard risks inside rating guidelines. Depth 4: binds cover, issues endorsements that change cover, applies pricing outside guidelines.
- Chief underwriting officer: maps held quotes and binding to authority letters. The agent holds each for an underwriter with authority for the class and limit.
- Chief underwriting officer: holds every decline at depth 2 for an underwriter to decide.
- Chief underwriting officer: assigns pricing outside guidelines to a senior underwriter, with pricing told of any pattern.
- Chief underwriting officer: ties each authority letter to a current certificate. A lapse suspends the underwriter's authority for agent-prepared business until renewed.
- Agent owner: configures and files the rule.
| Step | The agent does | Depth | Stays with a person |
|---|---|---|---|
| Read submission | Extracts and enriches | 1 | Nothing |
| Request information | Asks the broker or client | 3 | Nothing within templates |
| Standard quote | Rates within guidelines | 3 | Nothing inside guidelines |
| Non-standard quote | Drafts with referral note | 2 | Underwriter within authority |
| Bind cover | Prepares and holds | 4 | Underwriter within authority |
| Decline | Drafts letter | 2 | Underwriter decides |
| Off-guideline pricing | Prepares and holds | 4 | Senior underwriter |
Why are quotes inside guidelines allowed but binding held?
A quote is an offer that the client may or may not accept. Inside rating guidelines it reflects pricing decisions already made by the business. Letting the agent issue it at depth 3 speeds up standard business without moving any underwriting judgement.
Binding is different. It commits the insurer to pay claims. Before binding, someone should check that the facts relied on are still true, that subjectivities are met and that the risk has not changed since the quote. The agent prepares the binding with a checklist and the provenance of each fact: property data from a verified source is signed; the client's statements on the proposal are declared; a broker's covering email is external. The underwriter decides.
Some lines carry extra weight. In the EU, risk assessment and pricing for life and health insurance is listed as high-risk under the AI Act. Teams writing those lines should expect more scrutiny of how an agent contributes to pricing, and keep decisions with named underwriters.
Which controls make the rule work, and what evidence do they leave?
Authority letters matched to holds. Evidence: the approver authority matrix for the underwriting team, reconciled to authority letters.
Binding by an underwriter. Evidence: an underwriter named on every bound policy prepared by the agent.
Declines decided by people. Evidence: a named underwriter on each decline.
Off-guideline pricing approved by seniors. Evidence: senior names and reasons on each.
Rights lapse with certificates. Evidence: certificate status on each approval date.
What should you measure?
- Loss ratio on agent-quoted business against underwriter-quoted business, over time.
- Quotes issued outside guidelines at depth 3. The target is none.
- Binding without an underwriter. The target is none.
- Referral turnaround, which brokers notice first.
- Underwriter coverage by class, using the competency matrix for the underwriting team.
Where does it usually go wrong?
Guidelines drift. Pricing updates guidelines but the agent reads an old version. Keep guidelines as a sealed source with an owner.
Brokers treat agent quotes as binding. Make the difference clear in every quote document.
Referrals queue behind standard business. The agent quotes standard risks in minutes, so brokers send more business, and the non-standard referrals wait days for an underwriter. The rule should set a response-time target for referrals and name enough underwriters with authority for each class to meet it.
Authority letters and certificates fall out of step. An underwriter's authority letter is renewed but their certificate lapses, or the reverse. The routing should check both on the day of each approval, and the admin view or authority register should show the earlier of the two expiry dates.
Declared facts are treated as verified. A proposal form is the client's statement. If it drives the price, the underwriter should know.
Rules from compliance or IT are reused. Compare the approver rule for the compliance team and the approver rule for the IT team: neither deals with accepting insurance risk. IT's rule matters to underwriting in one way: changes to external data feeds change what the agent sees, and the underwriting agent's owner should approve them.
Questions people ask
Can the agent bind small standard risks?
Some insurers allow binding of small, clearly standard risks at depth 4 within tight bounds once certified. Most keep binding with underwriters at first and widen only on evidence.
Who approves endorsements mid-term?
An underwriter with authority for the class, if the endorsement changes cover or price. Administrative endorsements, such as a change of address with no rating effect, can run at depth 3.
Should underwriters see the agent's rating workings?
Yes. An underwriter approving a quote should see which factors drove the price and where each came from.