What does Principle 4 focus on in the insurance process?

Principle 4 in the insurance process emphasizes the need for controlling large losses and adhering to authority levels. This principle is crucial for maintaining financial stability within an insurance company. By effectively managing large losses, insurers can protect their balance sheets and ensure they are able to fulfill their obligations to policyholders. Additionally, adhering to authority levels allows for clear guidelines on who can make decisions regarding underwriting and claims, ensuring that risk management practices align with the company’s overall strategy and financial capabilities. This principle essentially safeguards the insurer's interests and promotes prudent decision-making processes within the organization to mitigate risks that could lead to significant financial impact.