What might be an appropriate exception rate that a product line manager could be comfortable with?
RB: I would say no more than two percent. MC: What is the acceptable degree of stretch in an exception policy? RB: I think no more than 20 debits unless there were some positive credits also present. But this should not be published nor even considered unless an agent requested it. Incidentally, exception rates should be tracked by the agent and the underwriter. The Future MC: Regarding preferred underwriting criteria, are you seeing any convergence of the numbers of classes or the thresholds that will get you in a particular class? RB: I think they are honing to the average, which is a three non-tobacco and two tobacco class system. The four-two is still popular, but there are less of them than the three-two. The problem with having four or more is that as you keep slicing and dicing, what do you have left? Brokerage companies want the 4-2 because they want their price break at the top end. And they may get 50-60 percent in their best class because they’ve got the best rate. Did they
