The broker was successful, and soon this sham insurance company was underwriting marine insurance throughout Europe and Africa.
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The statement from the regulator indicated that there had been improvements in the company's underwriting model and "significant" strengthening of its pricing structure.
For instance, if the underwriting department of an insurance company is delivered internally as a web service, it could easily be outsourced or, more likely, offered as a service to others.
According to the National Association of Securities Dealers, in 1996 Sitomer and Rome sold stock in a company they were underwriting, then repurchased the stock and resold it at a higher price.
If the number is below 100%, the company is making an underwriting profit (investment income isn't counted here).
After graduating, he worked at a regional bank in Atlanta, underwriting loans like one to a company that developed a way to use a Kevlar strap in construction, eliminating the need for five men to do the dangerous and awkward job of wrapping giant chains around pieces of steel.
Gujral indirectly controls the company--and is underwriting its shares.
It also says the three ignored the warnings of a company risk officer that the underwriting practices and marketing strategy of matching competitors' offers to subprime and option loan borrowers was substantially increasing risk in the portfolios.
When Countrywide was looking to achieve a 30% marketshare, Mozillo assure investors that his company would not sacrifice its strict mortgage underwriting standards to achieve that goal, the complaint says.
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An insurance company, for example, could hone its underwriting expertise and deliver this as a web service, while buying in credit-rating, human-resource or news services from other providers.
Chubb Corp. frequently recruits real-estate industry refugees and others for jobs in underwriting and customer service, says Val Aguirre, senior vice president for talent acquisition at the insurance company.
Analyst reports from underwriting banks are often viewed by investors with a skeptical eye, because banks collect fees for taking a company public.
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