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The contents of this manual are confidential and restricted to the employees of
the Company and the information contained herein should not be disclosed or
imparted to any person under any circumstances.
This manual is to be used with effect from-1st September 2002 and replaces all
previous manuals and instructions.
Page 2 of 75
INDEX
Property ...............................……………….. 14 - 31
IMPORTANT NOTES
Note 3 : BORDEREAUX
[Notes]
Note 5 : AUTHORITIES
(a) The authority given here is in respect of: -
i) Direct Business
[Notes]
(B) No refund shall be given in case there are claims outstanding/paid under
the policy.
(C) Subject to (B) above, pro-rata refund of premium for the unexpired portion
can be granted only under the following circumstances :
2) cancellation after the 1st year period due to sale of vehicle in the
case of a motor policy
NOTE:
This scale applies to all classes except Marine Cargo, Hull and
Personal Accident.
AGENCY COMMISSION
The agency commission for the various classes of business are as follows:
********
Page 10 of 75
Motor
If the value exceeds your binding authority, please refer for rates/terms.
If the fleet value for Motor Private and Motor Commercial (separately or
collectively) for a single client exceeds KD.200,000/-please refer.
Without referring, you cannot renew or accept any new business for:
01) Cars used for races, speed tests and rallies.
02) Vehicles on rails.
03) Vehicles not designed to run on terra firma.
04) Fuel tankers, taxis, limousines, drive hire cars and vehicles carrying
explosives or flammable liquids or gases in bulk.
05) Buses for public transport other than for own use for transport of
employees.
06) High valued cars such as Rolls Royce, Porsche, Ferrari,
Lambourghini, Lotus, Maseratti, Sports Cars and the like.
07) Vehicle within airports.
08) Motor Trade policies.
09) Sabotage and Terrorisms
Kindly note that the Tariff is on net basis to SAICO and would need to
be loaded for ACE commission.
Page 11 of 75
[Motor]
Page 12 of 75
Per the tariff and understand you will provide TPL only if it is
necessary
COMPREHENSIVE COVER
These rates are for repairs in our workshops. For rates with Agency
Repairs, refer page 13.
For all types of vehicles apply a rate of 0.90% (NET) on value of the
vehicle.
Add the Third Party Cover premium to the Fire and Theft cover.
Page 13 of 75
Page 14 of 75
[Motor]
The above rates apply to covers within the territorial limit of State of
Kuwait.
For extensions outside Kuwait but within the Arab world excluding
Lebanon and Oman, the policy should be subject to: -
(a) third party cover to apply as an excess layer in countries where
third party liability is compulsory to be purchased at the
border.
Page 16 of 75
[Motor]
Clients usually desire one rate for their entire fleet and not
individual rates for different values and different types of vehicles.
To arrive at an average rate, calculate the premium of each vehicle
using the rate given on earlier pages; divide the total premiums by
total sums insured to obtain the average rate.
Please ignore those vehicles where minimum premium applies as
this might result in the distortion of the average rate. The fleet
discount can be applied also on the minimum premium as detailed
in the following example :
Page 19 of 75
(H) RENEWALS
For fleets with 10 or more vehicles, you may extend the age limit to 10 years
provided the number of old vehicles do not exceed 20% of the entire fleet.
We would prefer to avoid granting this extension but can consider on individual
basis. Agency repairs can be given for current models only or up to 2 years old.
You may use following rating indications :
Page 23 of 75
If these vehicles are part of a fleet, then the fleet discount also applies, but these
vehicles cannot be rated on the fleet average rate.
(K) INSPECTION
All individual vehicles for insurance must be inspected prior to acceptance. Any
damage noted during the inspection must be pointed out to the Insured and
preferably avoid cover until repaired or put following clause in the policy.
" The Company shall not be liable for the undernoted damages/dents/scratches
even if these damages/dents/ scratches are further damaged due to a loss
covered by the policy:
The above rates do not leave us room to grant NCB. Whilst NCB is an useful
incentive to encourage clients to be more careful, the rates in the market are
already so low as to make the motor insurance unattractive. If NCB is to be
considered, then the rate/minimum premium should not be less by more than
10% of our tariff rates.
CONCLUSION
We wish to emphasize, nevertheless, that the foregoing constraints are not meant to
distract your underwriting judgment; but, prudence is needed to achieve profitable
motor underwriting.
As you are aware, this class of business has greatly deteriorated during the last few
years primarily due to mounting claim costs without corresponding increase in rates.
As our bottom line is directly influenced by the Motor business and almost all claims
are funded from SAICO's pocket, it would be in the interest of all concerned to
improve results.
*****************
Page 26 of 75
Page 27 of 75
PROPERTY
INTRODUCTION
The prime objective of this section is to lay down guidelines in the selection of
business with a view to create and maintain a sound and balanced fire portfolio
with satisfactory underwriting results. This is best achieved by the application
of experience and common sense to well known facts. Without proper
assessment based on full underwriting information, the acceptance of risks
simply becomes guess work and not underwriting.
Full facts relating to the risk and exposure must be known for proper
assessment and rating. To achieve this, the following must be done in each and
every case:
2. A survey must be done by one of the office staff and the survey report
must be sent with the policy for our reference.
For simple risks, such as residences and offices, the survey can be waived if all
facts are known to you (i.e. Proposal, construction, location, etc).
For proper selection of risks, the following essential facts must be known and
ascertained:
1) Proposer's name.
2) Location of risk.
3) Nature of occupancy and whether solely or partially occupied by the Insured.
4) If partially occupied, the nature of the trade carried out by others in the same
building must be known.
7) Whether hazardous goods are stored or kept on the premises. If yes, what are
these goods? What is their value? How and where stored? How far from other
goods or process? Ideally, hazardous or flammable goods must be kept in a
separate fire proof room or cabinet away from other goods.
- There should be clear spaces (not less than 1 meter) on all sides of stacks
and racks. Goods should not be stacked against walls. For goods in the
open, the stack . should be at least 2 meters away from the boundary
wall/fence.
- There should be a clear space of at least 1 meter between goods at the top
of the stacks and the ceiling or roof and a similar clear space beneath
sprinkler heads.
- Stacks of goods should be kept well clear of lighting fittings, heating pipes
and appliances, fire fighting and alarm equipment or doors.
Page 29 of 75
[Property]
12) Whether the electrical installations are in good condition and well
protected in conduits or loose.
17) In a diligent and discrete manner, the Insured's financial position must be
investigated as in case of financial problems there might be a temptation
to welcome a fire loss as a solution to immediate difficulties.
PERILS INVESTIGATED
Here, we concentrate on the main exposure with respect to the perils covered
under a fire policy and how one should deal with them.
(A) FIRE
The chance of a fire starting and the likely extent of damage varies
between one risk and the other according to the type of construction and
the nature of occupancy and contents.
When a building or group of buildings forming the same fire risk contain
differing forms of construction and/or occupancy, the terms to apply
must be those applicable to the most hazardous feature of construction
and occupancy.
Electricity:
The current running through the electric wiring is a source of heat and if
a fault develops in the wiring the heat can easily become excessive and
start a fire. In fact, neglect and misuse of wiring and electrical
appliances are the leading causes of fire. Any faults in the wiring must be
promptly and properly repaired. Most fires start with appliances, heaters
standing too near combustible materials. For example electric lamps get
very hot and fire could start if lamp shades or materials used in window
displays come into contact with them. Overloading of an electrical outlet
(for example many cables leading from one multi-pin plug), temporary
cable connections, etc. are a serious hazard and must be avoided.
Waste:
Waste such as cartons, packing materials etc. easily ignite and also serve
to spread fires quickly. Hence, premises should be cleared of waste
material as often as possible; at least once a day before closing time.
Another big danger is with the burning of waste material; often such fires
get out of control. If rubbish must be burnt, a proper incinerator must be
used away from buildings and storages and someone must stand guard
over it with fire extinguisher(s).
Smoking:
Discarded cigarette ends are still one of the most frequent causes of fire.
Smoking must be prohibited in storage and production areas. Clients
should be advised on this aspect and this should be made a condition in
the Policy.
Page 32 of 75
[Property]
Dangerous Goods:
Commodities such as paints, adhesives or chemicals must be kept in a
separate storeroom and well away from any source of heat. Aerosols, gas,
cartridge and cylinders if exposed to heat can explode and start fires.
When considering to grant this cover, the following must be taken into
account:
- The building structure must preferably be of concrete. If the
building is other than concrete
The age of the building must be considered. BP & WD cover for buildings
over 10 years of age should not be granted unless the building has been
renovated and the pipes changed. An excess must be always imposed for
this cover.
Page 33 of 75
[Property]
(D) Impact
When granting this cover the proximity of the premises to neighbouring
roads and the access of third party vehicles to the premises must be
considered. Imposing an excess might be prudent particularly in the case
of business premises where there are frequent visits of third party
vehicles to the premises.
The standard Impact Clause excludes impact by vehicles belonging to or
under the care custody and control of the Insured. This restriction can be
waived subject to charging the proper additional premium and imposing
an adequate excess. Nevertheless .this facility should be given in
exceptional cases for important clients only.
Likewise the standard Impact Clause excludes damage to vehicles. This as
well can be deleted for important clients subject to charging proper
loading in premium and imposing an adequate excess preferably
applicable to each vehicle.
(G) Explosion
When granting this cover, not only the existence of boilers on the
premises must be considered but also other sources must be investigated
such as:
1) The existence on the premises of highly flammable materials or gas
under pressure which might explode if exposed to heat.
Page 34 of 75
[Property]
Page 35 of 75
Can be given, but in view of the view of the wide impact of this
peril it is preferable not to canvass this business but you may give
it to clients who specifically ask for it at an appropriate additional
premium. Additional premium, a high deductible and more
important, a loss limit should be applied while covering this peril,
to make the exposure manageable and details of cover and
premium charged shall be reported separately.
(I) Strikes/Riots
Can be given subject to the payment of proper additional premium.
(N) Burglary
This extension must only be given after a careful study of the risk and the
precautions taken (locks, alarms, guards). Location plays an important
part since a premises on a main road is less riskier than one on side
streets which is still better than risks located in lonely areas
(warehousing complex). Rates must be charged considering these factors
as well as the nature of contents. Residences, offices, heavy machinery/
equipment premises are less exposed than fast moving goods
(supermarkets, camera shops, automobiles, home appliance showrooms,
etc). Warehouses must be avoided for granting this extension unless
there is 24 hours presence or security. Jewellery shops are to be referred.
A deductible, depending upon the nature of goods, helps eliminate small
losses or atleast reduces the overall claim.
IMPORTANT NOTES
1) The current wordings for the above perils are categorized under
three endorsements viz "WET PERILS", "OTHER PERILS", &
"POLITICAL PERILS". When granting all covers available under the
three endorsements, please ensure that adequate additional
premium is charged.
The variable charges are the charges which discontinue in case of a loss
and thus no longer constitute a burden on the business. As such,
variable charges are not insurable. On the other hand standing charges
are those which would continue to be paid or shouldered by the business
notwithstanding the fact that a loss has occurred. Such charges can be
covered. Likewise net profits not earned due to a loss occurrence
constitute a loss to the business and can be covered.
The rate charged for business interruption depends on two main factors:
The clause can be granted only if the Insured keeps up-to-date stock
records (and maintains a duplicate set away from the premises
covered). It is essential that the sum insured is adequate and
consistent with the existing stock records and that a separate limit
per location / independent storage is declared. Monthly
declarations per location as per the clause conditions must be
regularly submitted by the Insured.
The total sum insured is defined as the sum total of insured values of
buildings, machinery, contents, stocks, business interruption, removal
of debris, professional fees, neighbour's/landlord's recourse, etc.
BLDG. A B C
CONST. / RISK
GROUP % of Limils % of Limits % of Limits
1 100 85 NIL
2 80 70 NIL
3 60 50 NIL
4 NIL NIL NIL
5 NIL NIL NIL
Building Construction:
A - First class, mainly concrete block walls and concrete roof. If steel element
involved it should be coated with fire resistant material.
B - Mixed concrete and steel which is not coated by fire resistant material .
2 3 4
ART GALLERIES AGRICUL D A ALLUMINI S A E U RE
TURAL N UM I S R RS
BANKS AND THE LIKE IMPLEME E SMELTER E
HOSPITALS NTS D S/MANUF R RE
MINERAL
ICE CREAM FACTORIES FACTORI S ACTURIN AND C B TAI
ES G M
ICE FACTORIES D VEGETA R O LE
A A
MARBLE/STONEWORKS AIRPORT I AMUSEM BLE OIL RS,
ENT A O N
S STORAG
L S PARKS U W
OFFICES ASBESTO F K
A E F HO
S I BOUTIQU PLANTS T
FACTORI B ES A LE
RESIDENTIAL PREMISES B
ES L RESTAU C SA
(apartments, buildngs or N BROADCA
AUTO STING RANTS H I T
villas) SCHOOLS WATER E LE
SPARE A STATIONS A N U
D SANITAR RS
FACTORIES PARTS BUILDING R
Y N D
SHOWRO T S IN I &
OMS MATERIA G I
L COURSE N DI
I LS AND
BEVERAG I OF A N G ST
E PLANTS CONSTRU HARDWA
O B R G RI
CTIONfER RE
R S O BU
BUTTER ECTION SHOWR
N R
FACTORI A OOMS W TO
ES CANNERI S
R A O S RS
ES
CARPARK I H S R T
P CHEMI GREENHOUSES
S E P K O
CAL O R
L S H S
CAR CLEAN GRINDING
A
SHOWRO ING E A WORKS
A MANU G
OMS WORK L BUTTON
FACT E
N WORKS IM<
CEMENT URER S T FACTORIES
CONCRE S OF USING F FURNITUR
T / CABLE
HEAV NON- (COATED) E JUTE MILLS
TE T
Y HAZAR A FACTORY STORE/SH
ARTICLE S
DOUS A OWROOM MARINAS
MACH
S FACT. MATE C R CANDLE
INER G
CEMENT Y RIALS FACTORIES MATTRESS
DISPEN T A
SARIES MANUFACTURI
FACTORI MENTAL CIGAR/CI A CARDBOAR S NG
ES O
FOOD HOSPITALS GARETTE N D
CHEESE FACTOR MANUFACT PAINT
ffTOBACC R D W
IES METAL URING FACTORIES
FACTORI O O
I CARPENTRI
ES FRUIT R
FACTORIES FACTORI P ES PAPER
JUICE
COLLEGE E CARPET K FACTORIES
MANUF ES COLD I
ACTURI METAL TOYS FACTORIES S PERFUM
S STORES T
NG S CHROMING/
FACTORIES DRY C E
GALVANISIN
CO GfNICKELLI O MANUFA
GARAGE CLEANER H
SM PASTRIES R
S NQ CTURING
S AND S
ETI WITHOU WORKSHOP
AND LAUNDRI W PETROCH
C T S
U S EMICAL
MA REPAIRS ES O
OOMFECTIO T
NU ELECTRI P R CLOTHING PLANTS
FA NAR1ES FACTORIES O
GLASS PETROL/
CAL/ELE K
CT FACTOR E R
POWER CTRONIC S COAL BENZINE
URI IES A
HANDLING AND
NG S R
STATIONS RISKS G
EX GOODS SIMILAR
MANUFAC B E
IN OPEN M COFFEE
CL RECREATIO TURING A LOW
(NON- PEELING/RO
UD HAZARD A FLASH
EXCLUDI T ASTING G
ING OUS) N CENTERS
NG T WORKS A POINT
PE R
RF SEWAGE COMPUTE E S SPIRITS
HOTELS COMPUTER
UM K STORAGE
PLANTS RS R MANUFACTU /
I
ES RING A
N E Y PHARMACEUTIC
CRUSHIN FLOUR COTT I
S SHOPS OF T AL PRODUCTS
G MILLS ON R
T ORDINARY F MANUFACTURIN
GRAVEL JEWELLE
NON S MILLS
PLANTS I A G
HAZARDOU RY /PREP U
CUTLERY T S C ARATI PHOTOGRAPHIC
N
WORKS U MATERIALS FACTORIE T ON LABORATORIES
D
WITHOUT T SLAUGHTER O WORK
E PLASTIC
USE OF I HOUSES S S AND
R GABLES
PLASTICS SUGAR STOR R
O JEWELLE I
OR WOOD FACTORIES/ AGE FACTORIES
N MANUFACTU E
D P PLASTIC
S RING RY SHOPS
S DETERGENT R MANUFACTURIN
A
OR FACTORIES E
TELEPHONE G/STORAGE
F
I EXCHANGES B FARMS S
O SHOWRO P
L S R
R R FERTILIZER
OMS A U
UNITS I
Y N R
E MECHANI N
FRUIT AND E
K T
L CAL AND VEGETABLE
I E PACKING I
P EST. -
N BODY T N
M
L D G
REPAIR FUEL A
, F
A STATIONS N
GARAGES A
U P
N F
D METAL C R
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T R A E
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FACTORIE T S
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[Property]
A) KD.350,000 where the goods are packed in crates, cartons and the like.
B) KD.500,000 where the goods are not packed in crates or cartons.
Provided goods are stored in accordance with the notes for storage areas
appearing under Item 8 on pages 16 and 17 of this manual.
You are not authorized to give wet perils such as STF for movable goods that
can be damaged by water. On the other hand, property that are designed to
operate or be used in the open can be covered against STF.
A) STF:
I) Losses occasioned by or through the leakage of roofs, or as a
result of doors, windows, or unprotected opening being left
open or in defective condition must be excluded.
[Property]
B) Bursting of Pipes:
C) Impact:
D) Aircraft Damage:
E) Explosion:
The standard explosion should exclude damage to the
boiler/pressure vessel itself and should include a War/Nuclear
Exclusion Clause "Identical to ours.
F) Strikes/Riots/Malicious Damage:
G) Civil Commotion:
H) Smoke Damage:
The only wordings acceptable are ABI , and LM 7 (our policy). Following
must specifically appear in policy:
K) Business Interruption:
Wordings must be identical to ours and anyway this is a referral.
*************
WORKMEN'S COMPENSATION
For industrial workers, the rate would depend upon the degree of
hazard involved and therefore no indications can be given. The
minimum recommended net rate would be 1.00%.
You may not bind us without our prior approval for occupations involving:
<
1) Manufacture, storage, filling, breaking down or transport of
2) Underground Mining
(C) GENERAL
For renewal of policies (other than for excluded occupations mentioned above)
you may automatically bind renewal provided the claims ratio does not exceed
80% (net earned basis). When the claim ratio of any policy touches or exceeds
80%, please refer to us two months prior to renewal to enable a review.
[Workmen's]
**********
ENGINEERING
You need to refer all such risks to us for rating and acceptance. A detailed
proposal form with other available information must be submitted to enable us
quote.
GENERAL INFORMATION
CONTRACTORS MACHINERY
The major item of plant employed in this category nowadays is the tower crane
which usually remains on site throughout a substantial part of the construction
period. They would normally be declared and valued as a separate item in the
plant list. In addition the works will embrace a wide range of standard
equipment from operated plant, such as mobile cranes and excavators, to non-
operated items, such as compressors, generators, welding machines, etc.
[Engineering]
OTHER EXTENSIONS
The CAR policy can be extended to also include
(a) Removal of Debris. Contract Works rate will apply on the amount fixed
and the sum insured can generally be between 5 to 10% of Contract
Value.
***************
EQUIPMENT ALL RISKS
This class of business has to be referred to us for rating and acceptance with
following essential information:
Please note that we would be reluctant to grant cover for Liability On-Site
(Section II) as we believe that this risk is more appropriately insured under a
CAR/EAR Insurance. However, if the equipment is used within Insured's
own premises (for example, a factory or warehouse), then we would be inclined
to grant this cover.
*****************
PERSONAL ACCIDENT
Please refer for any higher limits or occupations other than those
mentioned above.
The rates to apply for above categories are:
**************
HOUSEHOLDER'S COMPREHENSIVE POLICY
This class of business which falls under our Property class of insurance may be
sold to individuals or groups. Our standard wordings must be used which is
designed primarily for rented residential premises, i.e. building or flat not
owned by the individual.
The contents rate will apply on the sum insured for additional rent .
Binding Authority
Deductible
The printed wording includes a deductible for STF (US$150) only. Use your judgment
of the risk increase upon this or suggest an amount for each and every loss (say
US$250 to US$500).
Underwriting Considerations
Risk wise, this class of business does not pose much of a problem, except the peril of
theft.
There is usually a tendency on the part of the Insured to inflate the claim and
convincing the individual on the market value and average clause is a problem.
Invoices are usually not available which consumes time and money in adjusting any
loss.
Any previous loss - (whether insured or not insured) must be carefully studied by you
to decide if the risk or individual is worth insuring.
Policy wording specifies that valuables in excess of 20% of the contents subject to a
maximum of US$1,500 must be declared and listed in the Policy. Valuables in excess
of the policy limit must be referred for rating.
Any article which exceeds 5% of the value of contents must be specifically listed in the
Policy Schedule.
*******************
MISCELLANEOUS CLASSES
For risks other than the premises as described above and for all other
liability risks, you would have to refer to us.
You are authorized to accept KD. 10,000 per person and KD100,000
per occurrence per firm provided :
- Names, job title and limit for each to be stated in the policy.
You are authorized to accept up to KD.25,000 for CIS (any one safe(s) at
one location) and KD.25,000 any one carrying for CIT provided:
4) For CIS, the safe should weigh not less than 1OOkgs and should be
located in a building of first class construction. When the weight
cannot be ascertained, the dimensions, which are to be specified in
the policy particularly the thickness of the door, must be
ascertained to satisfy ourselves that the safe is of reasonably heavy
weight. Details of each safe and its exact location must be obtained
and mentioned in the policy.
[Miscellaneous]
(c) Money should not be left unattended at any time and must
not be left in the boot of the car.
(E) OTHERS
****************
MARINE CARGO
(A) BINDING AUTHORITY:
The coverage should be limited to Clause (C) only for bagged cargo and
Clause (C) + N.D. for the following commodities:
1) Goods in bundles
2) Plate glass and asbestos sheets
3) Eggs
4) Sanitary ware, porcelain, ceramic or tiles
5) Cement c1inker
6) Mild steel, pipes (all sort)
7) Crude/fuel oil, gas oil or liquefied petroleum gas (LPG)
8) Fish meal
9) Catch
10) Jewellery
11) Fresh or chilled meat/poultry/fish
12) Coal/coke
13) Prefabricated houses.
For cover wider than Clause (C) please refer to us before accepting risk.
7) Minimum premium per policy should not be less than KD. 4.500
8) Rate for cover per Clause (C) must not be less than 0.125% without
our prior approval.
9) Rate for cover per Clause (C) + ND must not be less than 0.175%
without our prior approval.
11) At anytime the loss ratio of anyone MOC exceeds 65% you should
notify us before renewal.
5) Disbursements.
[Marine Cargo]
7) Contingency risks.
8) Confiscation/rejection risks.
***************
GROUP LIFE and MEDICAL
4) Dates of birth of dependents and employees whose ages are more than 44 years.
______________________________________________________________________________________________
______________________________________________________________________________________________
______________________________________________________________________________________________
______________________________
5) Dates of birth of all wives and number of children against each wife, if pregnancy and
childbirth benefit is required.
______________________________________________________________________________________________
______________________________________________________________________________________________
______________________________________________________________________________________________
______________________________
______________________________________________________________________________________________
______________________________________________________________________________________________
______________________________________________________________________________________________
______________________________
7) Breakdown of Nationalities.
______________________________________________________________________________________________
______________________________________________________________________________________________
______________________________________________________________________________________________
______________________________
_____________________________________________________________________________
9) Claims experience for at least past two years plus information of any major claims, even if the Group
was not insured, details of medical expenses payments made during the past two years versus
number of persons involved in each particular year.
_______________________________________________________________________________________________________
_______________________________________________________________________________________________________
_______________________________________________________________________________________________________
___
10) Please select one option of the following compulsory deductibles/co-insurances to be imposed In
and Out-Patient expenses.
a) Co-Insurance 20%
b) Co-Insurance 10%
Signature : _________________
Designation :_________________
Place :_________________
Date :__________________
Company Stamp:____________________________