What is it in finance?
A number of accommodation is a form of subscription, which is sometimes provided by the insurance company at the request of the broker or sells the coverage on behalf of the company. This approach usually involves providing a business cover or other entity that does not meet the standards set by the company for the type of coverage. Accommodation of this type is usually created as a means of maintaining a lucrative relationship with a broker or agent looking for coverage on behalf of his client.
The use of the accommodation line can occur with almost any type of insurance coverage, including life insurance. For example, a broker, who provided a considerable customer base to the insurance company, may want to write a policy on a new client who does not fully meet the criteria set by the insurer. Rather than rejecting the application and, if necessary, to invite the broker to move his account to the competitor, the Provider shall consider the risk of the application against the financial loss that the broker decided to terminate the business relationship. If the risk is associated with pSani coverage considered to be less than the risk of loss of income generated by a profitable relationship with a broker, the insurance company approves the application and adapts the broker.
Depending on the agreement between the broker and the insurance provider, the broker may receive a slightly higher commission of this policy. At the same time, the insured party can pay a slightly higher bonus for accommodation. This arrangement can sometimes allow individuals and businesses to provide the insurance coverage it needs, but is unable to obtain in typical circumstances. As a result, the expansion of a number of accommodation provides consumer what is needed, a broker with a new client and an iposaler nsuration with another source of income.
There are situations in which the provider does not expand the line of accommodation. This may happen when the insurance company is convinced that the risk of approval of the application is greater than the risk associated with rejecting the application for coverage and ifAdna by stealing a broker. For this reason, the awarding of the accommodation line is not sure just because the broker has a good job with the provider. If the insurance company has no reason to believe that writing coverage is in the best long -term interest of the provider, the application will be very likely to be rejected.