One of the interesting points that I noticed in my experience submitting a waiver of a certain insurance coverage requirements pertaining to carrier rating. In order to strengthen your/our request, these waivers should use the existence of a reinsurance program. Keeping these factors in the view, we may include your financial position and reinsurer’s ratings to further strengthen your request. In cases where the carrier was not able to provide the required coverage, these details have always helped me demonstrate that the policyholder would be able to cover or would have coverage for damages or losses/claims. Lastly, we can include three more factors including guarantors’ financial stability, customized service from the carrier, and affordable pricing to further improve our waiver. 

An individual could create an insurance waiver for the following specifications based on the outline given below. 

Specifications: 

Template Outline: 

#1 - How should the introductory section of the waiver be written?  

The introductory section of the waiver should clearly state the requestor’s identity and the purpose/type of the waiver being requested. Provided below are examples that can be used for further assistance if required.  

<Organization/Borrower name> is currently seeking a waiver for insurance coverage requirements pertaining to the carrier’s ratings. These requirements include <Details of rating requirements>.  

<Agent name> is currently requesting a waiver for insurance coverage requirements regarding the carrier’s ratings on behalf of <Organization/Borrower name>. These requirements include <Details of rating requirements>.  

#2 - What details about the current insurance carrier should be included?  

The organization/borrower should provide all relevant details pertaining to the insurance carrier they currently receive coverage from. These details can include the provider's name and their current rating details. Provided below is an example that can be used for additional guidance if needed.  

<Organization/Borrower name> currently has coverage from <Insurance provider name>. The <Insurance provider name> has been working with clients in the <Industry name> since <Year> and has worked with <Organization/Borrower name> since <Date>. Their current rating for <Rating category 1> is <Insurance provider rating>, and for <Rating category 2> is <Insurance provider rating>. In addition, the provider was also rated by an independent financial analysis firm, <Independent financial analysis firm name> on <Date>. As per their analysis, <Insurance provider name> received a rating of <Insurance provider rating> for <Rating category>. 

#3 - How to emphasize the existence of a reinsurance program?  

In addition to providing details about their insurance carrier, the organization/borrower, if applicable, should also emphasize that the carrier offers a reinsurance program/policy. Providing this information will help illustrate that the organization/borrower can obtain coverage from the reinsurer if their carrier is unable to provide the required coverage. Below is an example that can be used for further assistance.  

<Insurance provider name> currently provides a reinsurance program ensuring that the <Organization/Borrower> name will receive coverage from <Reinsurer name> if the <Insurance provider name> is unable to provide the required coverages.  

#4 - What details about the reinsurer should be provided when applying for a waiver?  

The organization/borrower should ensure that all relevant details about the reinsurer are included when writing the waiver. Providing such details will help demonstrate the availability of sufficient coverage and that the reinsurer is competent. These details can include the reinsurer’s name, how long the reinsurer has worked with the organization/borrower’s insurance provider, and the ratings. The example provided below can be used for additional guidance when writing this section.  

<Reinsurer name> has worked with <Insurance provider name> since <Date>. The <Reinsurer name> currently has a rating of <Reinsurer’s rating> for <Rating category 1> and a rating of <Reinsurer’s rating> for <Rating category 2>. The required ratings for these categories are <Rating requirement details> therefore, the <Reinsurer name> is in compliance with these rating requirements.  

#5 - How to demonstrate financial stability when applying for a waiver?  

Demonstrating financial stability can help illustrate the fact that the organization/borrower is able to account for damage or losses/claims if their insurance carrier is unable to meet these requirements. When demonstrating financial stability, the organization/borrower should include details about their cash flow, debt service coverage ratio (DSCR), and the policyholder surplus. Provided below is an example that can be used for additional guidance to structure this section. 

<Organization/Borrower name> currently has a debt service coverage ratio (DSCR) of <DSCR details>, indicating that loans can be repaid in a sufficient manner. In addition, the <Organization/Borrower name> also has an annual cash flow of <dollar amount> and a policyholder surplus of <dollar amount>.  

#6 - How to justify the request for approval? 

Before submitting the waiver, the organization/borrower should provide a justification as to why their request should be approved. This justification can be based on the existence of a reinsurance program, and details about the carrier and the reinsurer should be provided. In addition, the organization/borrower should also provide details about their DSCR and cash flow to demonstrate financial stability. Lastly, other factors such as the net worth and liquidity of the guarantor(s) and sufficient services at affordable prices being offered by the carrier can also be used to strengthen the waiver for approval.