LMP Slip by 969J7X

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									The Market Reform
Lineslip Guidelines




       October 2006
                                                 The Market Reform Lineslip




                                                        Table of Contents

   1. Introduction.................................................................................................................. 3
   2. Scope .......................................................................................................................... 3
   3. Out of Scope ............................................................................................................... 3
   4. The Franchise Board Mandate .................................................................................... 3
   5. Enforcing & monitoring the use of the Lineslip ............................................................ 4
   6. Variations to the Lineslip ............................................................................................. 4
   7. Structure of the Lineslip ............................................................................................... 4
7.1   Panel 1 removal ........................................................................................................... 5
7.2   General ........................................................................................................................ 6
7.3   Contract Details Section ............................................................................................... 7
7.4   Subscription Agreement Section .................................................................................. 7
7.5   Fiscal and Regulatory Section...................................................................................... 7
7.6   Security Details Section ............................................................................................... 7
   8. Declarations ................................................................................................................ 8
   9. Further Information ...................................................................................................... 8
   APPENDIX A – Market Reform Lineslip ............................................................................. 9
   APPENDIX B – FSA Client Classification Headings Defined ........................................... 27
   APPENDIX C – Expert Fees Collection ............................................................................ 28
   APPENDIX D – Hold Cover Provisions ............................................................................ 29
   APPENDIX E – Line Conditions ....................................................................................... 30
   APPENDIX F – Unique Market Reference Guidance ....................................................... 32
   APPENDIX G – Guide to Order Hereon ........................................................................... 33




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                                    The Market Reform Lineslip

    1. Introduction
       The LMP Lineslip was introduced in June 2005 and was mandated by the Lloyd’s
       Franchise Board for Lineslip business incepting from the 1 October 2005 (for reference
       see the LMP Lineslip June 2005. This Market Reform Lineslip October 2006 replaces the
       LMP Lineslip June 2005. These guidance notes have been updated to reflect changes in
       the exemptions to the mandate, regulatory changes, and feedback from the market. The
       changes made in this version of the Lineslip are designed to align it with the Contract
       Certainty Code of Practice guidance issued by the Market Reform Group (MRG). This
       document sets out details of the Lineslip and defines the business that falls within the
       scope of the Lloyd’s Franchise Board mandate.

    2. Scope

       Lineslips are used by Brokers for example to access a group of Insurers who wish to
       delegate their authority to enter into contracts of insurance to another Insurer in respect of
       business introduced by a Broker named in the agreement1.

       The Market Reform Lineslip should be used for the following:-

           All Lineslips placed by London Market Brokers where the Lineslip falls within the
            definition of London Market Business as specified in the Contract Certainty Code of
            Practice issued by the MRG.

       N.B Some practitioners use the term “Marine Covers” to describe Lineslips for Marine
       business where there is no common insured across the declarations bound. These are
       Lineslips and must follow the Lineslip guidelines.


    3. Out of Scope

       The Market Reform Lineslip must not be used for:-

           Binding Authorities as these have separate guidelines-
            Refer to http://www.marketreform.co.uk/Binding_pubs1.htm
           Marine Open Cargo Covers and Declarations attaching thereto. A Marine Open
            Cargo Cover is held by an insured where such Insured has or is expected to acquire,
            an insurable interest in each declaration bound.
           Declarations or Offslips attaching to Lineslips as these must follow the Market Reform
            Slip June 2006 guidelines.


    4. The Franchise Board Mandate

       The Franchise Board has prescribed the following standards and arrangements for the
       conduct and administration of insurance business at Lloyd’s provided always that failure
       to comply with these standards and arrangements shall not invalidate or call into question
       any contract or agreement entered into by or on behalf of a managing agent or syndicate
       nor shall failure to comply with these standards and arrangements create any right of
       action or claim in any third party against a managing agent or syndicate, the authority to
       enforce compliance being exclusively vested in the Franchise Board –

1
 Where a Lloyd’s syndicate participates on the Lineslip, the business must be introduced by a named
Lloyd’s Broker.

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                              The Market Reform Lineslip


   (a) as from 2nd January 2004, a managing agent shall not permit the syndicate stamp of
       a syndicate managed by it to be affixed to any slip which relates to a contract or
       contracts of insurance unless –

    (i)      the slip is in the format, from time to time issued by the MRG and the information
             contained in the slip has been properly completed in accordance with the
             relevant guidelines issued by the MRG
    (ii)     the slip is marked “Market Reform Slip Exempt – Client Requirement”; or
    (iii)    the slip relates to motor business, personal lines business or term life insurance
             business and the slip will not be processed by LPSO Limited;

   (b) as from 28th October 2004, a managing agent shall not permit the syndicate stamp of
       a syndicate managed by it to be affixed to any binding authority unless the slip has
       been completed in accordance with the relevant slip guidelines from time to time
       issued by the MRG.

   (c) as from 1st October 2005, a managing agent shall not permit the syndicate stamp of a
       syndicate managed by it to be affixed to any Lineslip unless the Lineslip has been
       completed in accordance with the relevant Lineslip guidelines from time to time issued
       by the MRG.

   This means that:

               a) Lineslips cannot be marked as “Client Exempt”; and
               b) Declarations off Lineslips can only be marked as “Client Exempt” if
                  required by the client.

5. Enforcing & monitoring the use of the Lineslip
   The Market Reform Programme Office (MRPO), in co-operation with the LMBC, the
   IUA and the LMA, is in continuous dialogue with firms about improving quality, with
   the aim of providing education and guidance to improve market standards.


6. Variations to the Lineslip
   The following are valid variations to the Lineslip as incorporated into this document.

   6.1 The order of Lineslip headings in the CONTRACT DETAILS section is not fixed.
   6.2 There will be contract specific Lineslip headings that will need to be incorporated into
       the Lineslip to allow for any unusual or additional CONTRACT DETAILS as deemed
       necessary.

7. Structure of the Lineslip
   Previous versions of the Lineslip consisted of three distinct “Panels” of information
   namely:-

   Panel 1     -   Data Form for bureau processing
   Panel 2     -   Four separate sections namely CONTRACT DETAILS, SUBSCRIPTION
                   AGREEMENT, INFORMATION and FISCAL AND REGULATORY
   Panel 3     -   Insurer security details

   As part of the ongoing market reform to standardise the placing process it has been
   agreed to remove Panel 1 from all Market Reform Lineslips. To simplify the structure of
   the Lineslip the concept of Panels has been dropped and there are now five distinct


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                                    The Market Reform Lineslip

      sections. What was called Panel 3 now becomes the SECURITY DETAILS section. This
      structure is shown in the diagram below.

                       OLD LMP LINESLIP STRUCTURE               MARKET REFORM LINESLIP STRUCTURE

       PANEL                   PANEL 2               PANEL                    CONTRACT DETAILS
         1                   CONTRACT DETAILS
                                                       3
                                                                         SUBSCRIPTION AGREEMENT

                         SUBSCRIPTION AGREEMENT
                                                                               INFORMATION


                              INFORMATION                                  FISCAL & REGULATORY



                          FISCAL & REGULATORY                               SECURITY DETAILS




      Some contracts have previously required an additional Panel 1 form to be produced,
      known as LPO301B forms for more complex bureau processing. These are no longer
      required. However, Brokers should continue to provide LPO208 forms as necessary
      where current market practice requires their use

7.1   Panel 1 removal

      The data from Panel 1 can be categorised into:-

      A)       Data that can be incorporated in existing Lineslip headings.
      B)       Data that is required and will be captured in new/additional headings within the
               body of the Lineslip; and
      C)       Data that is obsolete.


      A:        Incorporate data in existing Lineslip headings
           Current Panel 1 Data                         Already Captured Under
                  Items            Heading Name                     Lineslip section
       Unique Market               Unique Market Reference          Contract Details
       Reference
       Policy Number               Unique Market Reference or        Contract Details
                                   Lineslip Reference
       Gross Premium               Premium                           Contract Details

      B:        Incorporate data in new/additional Lineslip headings
           Current Panel 1 Data                             Now Becomes
                  Items            Heading Name                    Lineslip section
       Written Lines               Basis of Written Lines          Subscription Agreement
       Order/Closed For            Order Hereon                      Contract Details
       Settlement Due Date         Settlement Due Date               Subscription Agreement
       Risk Codes                  Risk Codes                        Fiscal and Regulatory




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                                  The Market Reform Lineslip

      C:      Obsolete Panel 1 data
           Current Panel One Data Item                      Reason why data is obsolete

      Assured/ Reassured Account              As there are many different Assureds/Reassureds under
                                              a Lineslip this heading is not required.
                                              This information was an unnecessary repetition of the
      Currency                                currency of the premium already shown in the Lineslip.
      Slip Registration                       Slip Registration scheme no longer active.
      Binding Authority Registration Number
      and Date                                Not applicable for Lineslips
      TOC Tribunal                            The tribunal has now disbanded.
      Adjustable Scheme Indicator             Not applicable for Lineslips
      USB/NUS/US                              No longer required
      VAT Code                                Information not required from Broker
      DTI Code                                Information no longer required.
      Serial Number                           Reference field not used.
      Certificate Numbers                     Information no longer required.
      EC-CCI/ Establishment/Services/NA       No longer an EU regulatory requirement.
                                              UMR is primary reference. Other references such as this
      Brokers Cover Number                    do not need to be advised to the bureau or Insurers.
      Gross Premium (War)                     All premiums are shown under the PREMIUM heading.
                                              Where applicable, a CPA clause will be shown under
      CPA Indicator (War)                     CONDITIONS heading.
                                              Xchanging already have this information in their enquiry
      Bureau Scheme Number                    systems thus do not do need Broker to quote it.
                                              The totals for each bureau will no longer be required as
      Bureau Signed line shares               these will be calculated by XIS
                                              Majority of Brokers never use it and those that do
      Reference Number                        confirmed that they do not need it in the Lineslip.
                                              As there may be many different Overseas Brokers under
      Overseas Broker                         a Lineslip this heading is not required.
                                              As this is likely to vary by Declaration this heading is not
      Country of origin                       required.
      DEF                                     No premium will be paid via bureau deferred
                                              scheme hence, irrelevant heading.
      ADJ                                     No final adjustment of premium hence, irrelevant
                                              heading.

7.2   General
          There are five separate sections called CONTRACT DETAILS, SUBSCRIPTION
           AGREEMENT, INFORMATION, FISCAL & REGULATORY and SECURITY DETAILS.
           The inclusion of the Contract Details heading in the Lineslip is optional, not the
           content. The other four section headings must be included.
          Standard headings exist for the Subscription Agreement, Fiscal and Regulatory and
           Information sections. The Subscription Agreement section headings must not be
           changed, deleted, reordered or added to in any way. Furthermore the Subscription
           Agreement section must not include any additional headings.
          Where monetary amounts are stated on the Lineslip the currency must be clearly and
           unambiguously identified and should not use symbols such as “£” or “$”. A commonly
           accepted way of achieving this is to use the relevant three letter ISO currency code,
           e.g. USD.
          A Lineslip must not include any terms which are unspecific or create ambiguities, for
           example any TBA’s (To Be Agreed/Advised). It is a requirement for Contract Certainty
           that there is agreement of all terms between the insured and Insurers before the


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                                The Market Reform Lineslip

          Insurer formally commits to the contract. However if declarations are likely to differ
          greatly from each other and therefore terms can not easily be specified on the Lineslip
          it is permissible to put words similar to “to be agreed each and every insurance
          bound”.
         Where a non-registered/non-standard wording is agreed in the Lineslip a copy of the
          agreed wording must be submitted to Xchanging Ins-sure Services with each
          insurance bound if and when applicable.
7.3   Contract Details Section
         During placing the Broker and Insurers must ensure that the Lineslip clearly states all
          the contract terms, references or attaches all Registered Wording and Registered
          Clauses where used and attaches all bespoke and non-Registered Wording and non-
          Registered Clauses in full.
         Standard Lineslip provisions must be relevant to the risk or the administration of that
          risk.
         The heading Signing Provisions is now a mandatory heading to be completed on all
          Lineslips and has been moved to the Contract Details section. Any variation of signed
          lines resulting from these signing provisions will need to be the subject of documented
          agreement of the parties to the contract i.e. Brokers and Insurers. The use of the
          instruction “Line to Stand” or equivalent is valid. The use of any other signing
          instructions, e.g. “X% to sign Y%” leads to ambiguity and must be avoided.

7.4   Subscription Agreement Section
         Insurers must not delete the Subscription Agreement section of the Lineslip or use
          Stamp Conditions that specify “No Subscription Agreement” or “Ex Subscription
          Agreement” or similar. If there are particular provisions Insurers do not wish to apply
          to them, these can be explicitly stated against the relevant Subscription Agreement
          heading or in exceptional circumstances not catered for in the Subscription
          Agreement, be specified as a Line Condition. Refer to Appendix E for guidance.
         The General Underwriters Agreement (GUA) must not be used on Lineslips or
          declarations off Lineslips.

7.5   Fiscal and Regulatory Section
         Additional headings have been incorporated in the Fiscal and Regulatory section to
          accommodate additional regulatory information required as a result of Panel 1
          becoming obsolete.

7.6   Security Details Section
         The Contract Certainty Code of Practice requires Insurers to phase out the use of
          Stamp and Line Conditions and accordingly these should be phased out during 2006.
          Stamp Conditions should be removed and recorded elsewhere, as per the guidance in
          Appendix E. Only certain Line Conditions that are relevant to the risk and cannot be
          specified elsewhere may remain in the Security Details section after the
          implementation period has elapsed.
         If Line Conditions are still necessary they must not contain acronyms or abbreviations
          but should state the condition in full, for example “No LOC” should be stated “No
          Letters of Credit”. For further guidance refer to Appendix E.

      A detailed definition of the mandatory headings required in each section of the Lineslip
      can be found in Appendix A.




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                             The Market Reform Lineslip

8. Declarations
   Declarations off Lineslips should follow the Market Reform Slip guidelines for open
   market (refer to. http://www.marketreform.co.uk/slip_documentation1.htm)
    The General Underwriters Agreement (GUA) must not be used for Declarations
       off Lineslips. Endorsements should be agreed by the same agreement parties
       that agreed the Declaration off the Lineslip. Where an endorsement makes a
       change that, in the opinion of the agreement parties, may impact all Insurers the
       agreement parties should refer the endorsement to all Insurers. For example an
       endorsement may add an additional class of business which some Insurers
       may not be able to or wish to underwrite.
    The UMR and LPSO Signing number and date for the Lineslip must be shown
       clearly on the Declarations off the Lineslip.
    Each Declaration off the Lineslip must have a separate UMR
    A Declaration off a Lineslip should not contain open market lines unless
       expressly permitted by the Lineslip.
    All Declarations off Bulking Lineslips with one or more subscribing Lloyd’s
       Insurer(s) must be submitted to XIS for Stage 2 signing.
    All Declarations off Non-Bulking Lineslips with one or more subscribing Lloyd’s
       Insurer(s) must be submitted to XIS for Stage 1 and Stage 2 signing


9. Further Information

 For further information on the Market Reform Lineslip or any of the other market reforms please
 contact:

    Type of Query    Contact                                        Address
    General          Steve Hulm – MRPO                              Gallery 7
    Queries          Tel: 020 7327 5249                             Lloyd’s
                     Fax: 020 7327 5227                             1 Lime Street
                     Email: steve.hulm@lloyds.com                   LONDON
    Brokers          Mark Knight – LMBC                             BIBA House
                     Tel: 020 7397 0252                             14 Bevis Marks
                     Fax: 020 7626 0564                             LONDON
                     Email: mark.knight@lmbc.co.uk
    Lloyd’s          Adrian Graham - LMA                            Suite 1085
    Insurers         Tel: 020 7327 8378                             Lloyd’s
                     Fax: 020 7623 9390                             1 Lime Street
                     Email: adrian.graham@lloyds.com                LONDON
    IUA Insurers     John Hobbs – IUA                               Suite 7
                     Tel: 020 7617 4445                             LUC
                     Fax: 020 7617 4440                             3 Minster Court
                     Email: john.hobbs@iua.co.uk                    LONDON




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                                                              The Market Reform Lineslip

APPENDIX A – Market Reform Lineslip


                                                                      CONTRACT DETAILS


                  LINESLIP STRUCTURE                                                                   LINESLIP EXAMPLE

UNIQUE MARKET This reference can be incorporated as a                                  Unique Market   B0123ABC1234
REFERENCE:    separate heading or as a header on each page                             Reference:
                    of the Lineslip. It is used to distinguish individual
                    insurance contracts. It must start with “B”
                    followed by the Lloyd’s Broker number and then
                    a unique reference which cannot have more
                    than 12 alphanumeric characters. Refer to
                    Appendix F for guidance on correct completion.

TYPE:               The type of Lineslip, either Bulking or Non-                       TYPE:            Non-Bulking Lineslip/ Bulking Lineslip*
                    Bulking.                                                                           (* Delete as applicable)

FORM FOR EACH       The NMA reference or other identification                          FORM FOR EACH   As agreed by the agreement parties for each
INSURANCE           of the policy jacket. Where this is the same                       INSURANCE       insurance bound
BOUND:              on each insurance bound it can be                                  BOUND:
                    specified here. Where it is likely to vary by
                    declaration “As agreed by the agreement
                    parties for each insurance bound” should
                    be stated

LINESLIP            The Lineslip reference used by the Broker                          LINESLIP        DEF1
REFERENCE:          to identify the Lineslip. This can be a                            REFERENCE:
                    number or a name. If this is the same as
                    the UMR then this heading may be omitted.




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                                                  The Market Reform Lineslip
               LINESLIP STRUCTURE                                                       LINESLIP EXAMPLE

BROKER:         The name and address of the Broker                       BROKER:        XYZ Broker Ltd
                responsible for placing the Lineslip and                                123 Wickley Road
                administering the Lineslip. Where the                                   London
                Lineslip may be used by other Brokers this                              United Kingdom
                should be specified.                                                    L20 1MP

                The authorised classes of business and                                  Commercial Property
AUTHORISED                                                               AUTHORISED
                coverages that may be accepted under the
CLASSES OF                                                               CLASSES OF
                Lineslip.
BUSINESS AND                                                             BUSINESS AND
COVERAGES:                                                               COVERAGES:

                Any exclusions that apply to the classes of                             Excluding terrorism perils
EXCLUSIONS                                                               EXCLUSIONS
                business and coverages specified in the
WITHIN THE                                                               WITHIN THE
                previous heading.
AUTHORISED                                                               AUTHORISED
CLASSES OF                                                               CLASSES OF
BUSINESS AND                                                             BUSINESS AND
COVERAGES:                                                               COVERAGES:




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                                                   The Market Reform Lineslip
                LINESLIP STRUCTURE                                                         LINESLIP EXAMPLE

PERIOD:           The Period of the Lineslip. This should be               PERIOD:         Risks attaching during the period:
                  specified on a “risks attaching basis” and                               From: 1st June 2006
                  must include the inception date and time                                 To: 31st May 2007
                  of day, expiry date and time of day and the                              Both days inclusive any time zone.
                  time zone. As an alternative to specifying
                  the time of day it is acceptable to specify
                  both days inclusive, although the time
                  zone is still required.
                  Where a Lineslip accepts business from
                  anywhere in the world then the phrase
                  “Any Time Zone” is acceptable. Lineslips
                  should be for no more than 12 months
                  from inception. However, subject to the
                  agreement of the agreement parties
                  specified under “Basis of Agreement to
                  Lineslip changes”, it is possible to extend
                  the period of the Lineslip, but in no event
                  should it exceed 18 months from
                  inception.
                  For Lineslips where specific dates of
                  inception or expiry are not known, for
                  example voyages, constructions and
                  sporting events, the specific events
                  dictating the period must be stated.

EXTENSIONS OF    The extent and duration of any extensions                 EXTENSIONS OF   This Lineslip may be extended for a period of
PERIOD OF        to the period of the Lineslip that may be                 PERIOD OF       up to XX months subject to the agreement of
LINESLIP:        given and who needs to agree such                         LINESLIP:       the agreement parties specified under Basis
                 extensions. The agreement parties for such                                Of Agreement To Lineslip Changes.
                 extensions in period are to be shown under
                 the “Basis Of Agreement To Lineslip
                 Changes” heading in the Subscription
                 Agreement section.




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                                                      The Market Reform Lineslip
                 LINESLIP STRUCTURE                                                              LINESLIP EXAMPLE

MAXIMUM PERIOD    The maximum duration of any Declaration                       MAXIMUM PERIOD
                                                                                                 No insurance shall be bound for a period
OF EACH           off a Lineslip including any provisions for                   OF EACH
                                                                                                 greater than XX months plus odd time, not
INSURANCE         odd time and extensions. The agreement                        INSURANCE
                                                                                                 exceeding XX months in all plus any
BOUND:            parties for such extensions must be shown                     BOUND:
                                                                                                 extensions as may be agreed by the
                  under the “Agreement Parties for Each
                                                                                                 agreement parties for each insurance bound.
                  Insurance Bound” heading in the
                  Subscription Agreement section.

ORDER HEREON      Slip closings i.e. whether the signed lines                   ORDER HEREON:
                                                                                                 100% of 100%.
                  are percentages of the whole or
                  percentages of the slip’s order. The
                  percentage of slip order also needs to be
                  clearly specified. This heading should be
                  completed in the format X% of Y%. Both
                  percentages must be completed on all
                  contracts. Refer to Appendix G for
                  guidance on correct completion.

MAXIMUM LIMITS    The maximum limits of Liability/Sums                          MAXIMUM LIMITS   Maximum GBP XX,XXX,XXX each and every
OF LIABILITY/     Insured for each insurance bound.                             OF LIABILITY/    loss each insurance bound.
SUMS INSURED                                                                    SUMS INSURED
FOR EACH                                                                        FOR EACH
INSURANCE                                                                       INSURANCE
BOUND:                                                                          BOUND:

MAXIMUM           The maximum aggregate limits for all                          MAXIMUM         Maximum GBP XX,XXX,XXX
AGGREGATE         insurances bound.                                             AGGREGATE LIMIT
LIMIT(S)




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                                                        The Market Reform Lineslip
                 LINESLIP STRUCTURE                                                                LINESLIP EXAMPLE

TERRITORIES       The country of domicile of the insureds that                  TERRITORIES     Anywhere in the world
FROM WHICH        may be bound.                                                 FROM WHICH EACH
EACH                                                                            INSURANCE MAY
INSURANCE MAY                                                                   BE BOUND:
BE BOUND:

TERRITORIAL       The territories and geographical limits of                    TERRITIORIAL      Anywhere in the world
LIMITS OF EACH    each insurance bound.                                         LIMITS OF EACH
INSURANCE                                                                       INSURANCE
BOUND:                                                                          BOUND:

CONDITIONS OF     Identification, qualification or variation in                 CONDITIONS OF     Each insurance bound shall include:
EACH INSURANCE    perils including the wording, clauses,                        EACH INSURANCE
BOUND:            conditions and amendments to any clauses                      BOUND:            XYZ wording as may be agreed by the
                  in basic form including any applicable                                          agreement parties for each insurance bound
                  territorial wordings. All standard wordings
                  and clauses must be clearly identified by
                  name and reference. Any non-standard
                  wording or clauses must be referred to
                  here and attached to the Lineslip.

NOTICES OF        An optional heading where any notices other                   NOTICES OF EACH   Lloyd's Privacy Statement LSW1135B
EACH INSURANCE    than “Several Liability Notice” must be recorded.             INSURANCE
BOUND:            E.g. Lloyd’s Privacy Statement LSW 1135 B.                    BOUND:




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                                                         The Market Reform Lineslip
                   LINESLIP STRUCTURE                                                                 LINESLIP EXAMPLE

EXPRESS             Any express warranties that apply to each                      EXPRESS            (To be inserted if any).
WARRANTIES OF       insurance bound, over and above any that                       WARRANTIES OF
EACH INSURANCE      may be incorporated in the Policy Form or                      EACH INSURANCE
BOUND               implied warranties from legislation such as                    BOUND
                    the Marine Insurance Act 1906, including
                    the consequences of non-compliance. If
                    there are no express warranties this
                    heading would not be included.



CONDITIONS          Any conditions precedent that apply to                         CONDITIONS         (To be inserted if any).
PRECEDENT OF        each insurance bound, over and above                           PRECEDENT OF
EACH INSURANCE      any that may be incorporated in the Policy                     EACH INSURANCE
BOUND:              Form or legislation, including the                             BOUND:
                    consequences of non-compliance. If there
                    are no conditions precedent this heading
                    would not be included.

SEVERAL             The several liability notice that applies to                   SEVERAL             The subscribing Insurers obligations under
LIABILITY OF THE    the Lineslip.                                                  LIABILITY OF THE    contracts of insurance to which they
LINESLIP:                                                                          LINESLIP:           subscribe are several and not joint and are
                                                                                                       limited solely to the extent of their individual
                                                                                                       subscriptions. The subscribing Insurers are
                                                                                                       not responsible for the subscription of any co
                                                                                                       –subscribing Insurer who for any reason
                                                                                                       does not satisfy all or parts of its obligations.




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                                                      The Market Reform Lineslip
                   LINESLIP STRUCTURE                                                            LINESLIP EXAMPLE

CHOICE OF LAW &     The court that will have jurisdiction in the              CHOICE OF LAW &    This Lineslip shall be governed by and
JURISDICTION OF     event of a dispute between the Broker and                 JURISDICTION OF    construed in accordance with the laws of
THE LINESLIP:       Insurers over the terms of the Lineslip, and              THE LINESLIP:      England and Wales and each party agrees to
                    the law that will apply. Further Lloyd’s                                     submit to the exclusive jurisdiction of the
                    information on this heading is available in                                  courts of England and Wales.
                    Lloyd’s bulletins Y3406 and Y3327 and for
                    LMA members letter LTM04-056-WFR

CHOICE OF LAW &     The court that will have jurisdiction in the              CHOICE OF LAW &    As agreed by the agreement parties for each
JURISDICTION OF     event of a dispute between the Insured and                JURISDICTION OF    insurance bound.
EACH INSURANCE      Insurers over the terms of the insurance                  EACH INSURANCE
BOUND:              bound, and the law that will apply. Further               BOUND:
                    Lloyd’s information on this heading is
                    available in Lloyd’s bulletins Y3406 and
                    Y3327 and for LMA members letter LTM04-
                    056-WFR


PREMIUM:            The basis of any premium calculations that                PREMIUM:           As agreed by the agreement parties for each
                    will be used on each insurance bound.                                        insurance bound.

GROSS PREMIUM       The gross premium income limit that the                   GROSS PREMIUM      GBP XX XXX XXX
INCOME LIMIT:       agreement parties may enter into under the                INCOME LIMIT:
                    Lineslip.

NOTIFIABLE          The Broker shall monitor the total gross                  NOTIFIABLE         75%
PERCENTAGE OF       premium income bound and notify the                       PERCENTAGE OF
THE LIMIT NOT TO    Insurers immediately if it becomes                        THE LIMIT NOT TO
EXCEED:             apparent that the total gross premium                     EXCEED:
                    income is likely to exceed the percentage
                    of the limit stated.




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                                                      The Market Reform Lineslip
                 LINESLIP STRUCTURE                                                            LINESLIP EXAMPLE

PAYMENT TERMS:     Non-Bulking Lineslips Only                                 PAYMENT TERMS:   60 day premium payment condition – LSW3000
                  The Premium Payment Terms applied to
                  each Declaration off the Lineslip. Should                                    or
                  include Premium Payment Warranties or
                  Conditions. N.B. if there are no payment                                     As agreed by the agreement parties for each
                  terms then this can either be left blank or be                               insurance bound
                  shown as Not Applicable
                                                                                                                   OR
                                       OR
PREMIUM           Bulking Lineslips Only                                      PREMIUM          Monthly
BORDEREAU(X)      This heading only applies to Bulking                        BORDEREAU(X)
INTERVAL:         Lineslips where bulk premium settlements                    INTERVAL:
                  are to be made to Insurers via a premium
                  bordereau. This shows how often such
                  bordereau(x) are to be settled. e.g. monthly.
                  Premium Payment Warranties should not be
                  applied to declarations off Bulking Lineslips.


TOTAL             The maximum total Brokerage allowance or                    TOTAL             As agreed by the agreement parties for each
BROKERAGE:        fee.                                                        BROKERAGE:        insurance bound up to a maximum of XX%
                                                                                                of gross premium.
OTHER             Any additional deductions from premium                      OTHER            As agreed by the agreement parties for each
DEDUCTIONS        e.g. administration fees, sundry payments.                  DEDUCTIONS       insurance bound.
FROM PREMIUM:                                                                 FROM PREMIUM:
                                                                                               or

                                                                                               None




                                                              Page 16 of 33
                                                   The Market Reform Lineslip
                 LINESLIP STRUCTURE                                                         LINESLIP EXAMPLE

TAX PAYABLE BY    Any premium taxes and charges payable                   TAX PAYABLE BY    As agreed by the agreement parties for each
THE INSURED       by the (re)insured in addition to the                   THE INSURED AND   insurance bound.
AND               premium stated above, which are collected               ADMINISTERED BY
ADMINISTERED      and/or administered by Insurers for each                UNDERWRITERS
BY                insurance bound e.g. 5% UK Insurance                    FOR EACH
UNDERWRITERS      Premium Tax. Any premium taxes and                      INSURANCE
FOR EACH          charges payable by Insurers should be                   BOUND:
INSURANCE         shown in the Fiscal & Regulatory section.
BOUND:

PROFIT            Details of any contingent or profit                     PROFIT            None
COMMISSION:       commission that may apply to the Lineslip.              COMMISSION:
                  An agreed formula for calculating profit
                  commission must be attached.

CANCELLATION      The number of days notice that                          CANCELLATION      This Lineslip is subject to XX days notice of
NOTICE OF THE     Broker/Insurer must give in order for the               NOTICE OF THE     cancellation from either the Slip Leader or the
LINESLIP:         Lineslip to be cancelled.                               LINESLIP:         Broker.

RECORDING,        Details of procedures for storage of data,              RECORDING,        Where the Broker maintains risk and claim
TRANSMITTING &    documents and other information. This                   TRANSMITTING &    data/information/documents the Broker may
STORING           heading is optional.                                    STORING           hold data/information/documents
INFORMATION:                                                              INFORMATION:      electronically.


SIGNING           Slips must contain signing provisions                   SIGNING           Model signing provisions for open-market
PROVISIONS:       detailing how the signed lines will be                  PROVISIONS:       risks are published on the market reform
                  determined.                                                               website
                                                                                            (http://www.marketreform.co.uk/contractcerati
                                                                                            nty_guidance2.htm - Signed Lines Guidance);
                                                                                            these can be modified as required for
                                                                                            lineslips.




                                                          Page 17 of 33
                                                     The Market Reform Lineslip



                                                   SUBSCRIPTION AGREEMENT



                 LINESLIP STRUCTURE                                                            LINESLIP EXAMPLE

SLIP LEADER OF     State who is the Slip Leader for the                       SLIP LEADER OF   ABC Syndicate
THE LINESLIP:      Lineslip. The Slip Leader for each                         THE LINESLIP:
                   insurance bound will be specified in
                   each declaration. If the Slip Leader for
                   the Lineslip is known when the slip is
                   produced it must be added by the
                   Broker. If it is not known when the
                   Lineslip is produced the Slip Leader
                   inserts their name here when they
                   write their line. It is only possible to
                   have one Slip Leader for London
                   (Bureau) Market business; however in
                   situations where a non-bureau lead
                   exists on the same Lineslip it is
                   possible to annotate the right hand
                   side of the Lineslip with the headings
                   OVERALL        SLIP     LEADER      and
                   LONDON MARKET SLIP LEADER. In
                   such cases subsequent provisions will
                   need to be specific with regard to any
                   Slip Leader agreements.




                                                              Page 18 of 33
                                                     The Market Reform Lineslip
                 LINESLIP STRUCTURE                                                            LINESLIP EXAMPLE

SETTLEMENT DUE    Please note that the date shown here is                     SETTLEMENT DUE   For a Non Bulking Lineslip:
DATE:             not a “Premium payment warranty” or a                       DATE:            90 days from inception of each insurance
                  “Premium payment condition”. These                                           bound.
                  must continue to be shown under the
                  “Payment terms” heading in the                                               or
                  CONTRACT DETAILS section. If an
                  underwriter requires the settlement due                                      For a Bulking Lineslip:
                  date to be the same on each                                                  XX days from the end of each Premium
                  declaration the number of days from the                                      Bordereau(x) Interval
                  inception date of each declaration
                  should be shown here. The location of
                  the SDD in this section of the Lineslip
                  does not confer any change in legal
                  effect of the SDD or the implications of
                  non-compliance

BASIS OF          The basis on which subscribing                              BASIS OF         As agreed by the agreement parties for
WRITTEN LINES:    (re)Insurers written lines are applied to                   WRITTEN LINES:   each insurance bound.
                  the order or contract. There are three
                  variations that may be used. These are
                  mutually exclusive. No other option may
                  be entered under this heading. Further
                  guidance can be found in Appendix H.
                  The options are:
                        Percentage of Whole
                        Percentage of Order
                        Part of Whole (Can only be
                           used where orders are
                           expressed as monetary
                           amounts and not percentages)
                        As agreed by the agreement
                           parties for each insurance
                           bound.




                                                              Page 19 of 33
                                                    The Market Reform Lineslip
                 LINESLIP STRUCTURE                                                          LINESLIP EXAMPLE

AGREEMENT          State those Insurers who will bind                       AGREEMENT        Slip Leader
PARTIES FOR        insurances and any alterations thereto                   PARTIES FOR      GHI Company Ltd
EACH INSURANCE     on behalf of the subscribing Insurers                    EACH INSURANCE
BOUND AND          and the method by which reporting to                     BOUND AND
ALTERATIONS        followers is undertaken, if any.                         ALTERATIONS
THERETO:                                                                    THERETO:

BASIS OF          Specify which Insurers will agree                         BASIS OF         All changes to this Lineslip to be agreed by
AGREEMENT         changes to the Lineslip. N.B. The GUA                     AGREEMENT        (specify Agreement Party(ies) here).
TO LINESLIP       must not be used on Lineslips. For                        TO LINESLIP
CHANGES:          classes of business where it is market                    CHANGES:
                  practice    to     provide   a    copy
                  endorsement to the following market,
                  the method/media should be specified
                  here e.g. email, paper, etc.




                                                            Page 20 of 33
                                                      The Market Reform Lineslip
                 LINESLIP STRUCTURE                                                             LINESLIP EXAMPLE

DOCUMENT           The type(s) of evidence of cover to be                      DOCUMENT         As agreed by the agreement parties for
PRODUCTION FOR     produced, who produces it, and any                          PRODUCTION FOR   each insurance bound.
EACH INSURANCE     particular requirements e.g. any                            EACH INSURANCE
BOUND:             provisions relating to copies of                            BOUND:
                   wordings in a foreign language.

                   The appropriate evidence of cover
                   including details of security issued
                   within 30 days of inception. The
                   appropriate evidence of cover may be
                   any one of the following:-
                       Evidence of Cover to be issued
                          by Insurers or their agent in the
                          form of a policy document
                       Evidence of Cover to be
                          provided by "Broker company
                          name" in the form of a complete
                          and accurate copy of the
                          Declaration off the Lineslip
                       Evidence of Cover to be
                          provided by "Broker company
                          name" in the form of a Brokers
                          Insurance Document

RULES AND          What authority, if any, the Insurers                        RULES AND        None
EXTENT OF ANY      have delegated to the Broker in                             EXTENT OF ANY
AUTHORITY          relation to the Lineslip including any                      AUTHORITY
DELEGATED TO       Hold Cover provisions. This should                          DELEGATED TO
THE BROKER:        show the limit of the Broker’s authority.                   THE BROKER:
                   (for further information please see
                   Appendix D)




                                                               Page 21 of 33
                                                     The Market Reform Lineslip
                  LINESLIP STRUCTURE                                                            LINESLIP EXAMPLE

LINESLIP            The procedures and arrangements                           LINESLIP          In the event of non-renewal or cancellation
ADMINISTRATION:     agreed between the Broker and                             ADMINISTRATION:   of this Lineslip, all declarations shall run to
                    Insurers relevant to the ongoing                                            their natural expiry date (including any
                    administration of the Lineslip.                                             extension of individual Policy periods as
                                                                                                may be agreed by the agreement parties for
                                                                                                each insurance bound), unless cancelled in
                                                                                                accordance with the individual Policy terms
                                                                                                and conditions.

                                                                                                Premiums for all Declarations off the
                                                                                                Lineslip shall be allocated and paid in to the
                                                                                                year of account in which this Lineslip
                                                                                                incepts.

CLAIMS              Identity of the claims agreement                          CLAIMS            Claims to be agreed by the Slip Leader and:
AGREEMENT           parties for each insurance bound e.g.                     AGREEMENT
PARTIES:            Slip Leader, plus the first IUA company                   PARTIES:             I.   the first Lloyd’s syndicate in the
                    and Xchanging Claims Services                                                       event that the Slip Leader is a IUA
                                                                                                        company

                                                                                                   II. the first IUA company in the event
                                                                                                       that the Slip Leader is a Lloyd’s
                                                                                                       Syndicate

                                                                                                   III. Xchanging Claims services
                                                                                                        where there is more than one
                                                                                                        participating Lloyd’s managing
                                                                                                        agent

                                                                                                   IV. All non-bureau Insurers each
                                                                                                       for their own proportion




                                                              Page 22 of 33
                                                     The Market Reform Lineslip
                  LINESLIP STRUCTURE                                                            LINESLIP EXAMPLE

BASIS OF CLAIMS    Specify the basis of the claims                            BASIS OF CLAIMS   Claims to be managed in accordance with
AGREEMENT:         procedure(s) such as the Lloyd’s 2006                      AGREEMENT:        the Lloyd’s 2006 Claims Scheme and IUA
                   claims scheme for Lloyd’s participation                                      claims agreement practices.
                   and IUA claims agreement practices for
                   company market participation.

CLAIMS              All claims related information with the                   CLAIMS            Broker to enter claim advices into CLASS.
ADMINISTRATION:     exception      of    identification  of                   ADMINISTRATION:   All company market bureaux Insurers(s) to
                    agreement parties and the basis of                                          use CLASS for claims agreement.
                    claims agreement should be included
                    here. Clarification is required as to
                    which Insurers will use CLASS and the
                    use of email and/or access to
                    repositories.

RULES AND          If any of the claims agreement parties                     RULES AND         ABC Syndicate delegates the management
EXTENT OF ANY      specified above have delegated their                       EXTENT OF ANY     of all claims under GBP XX,XXX to
OTHER              claims processing and agreement to                         OTHER             Xchanging Claims Services.
DELEGATED          any other party this should be specified                   DELEGATED
CLAIMS             here including any limits that may                         CLAIMS
AUTHORITY:         apply, e.g. all claims less than GBP                       AUTHORITY:
                   XXXX or experts fees GBP XXXX.

                   It is unlikely that the Broker will be
                   aware of any such arrangements that
                   Insurers may have, so the Insurers who
                   are the claims agreement parties must
                   amend this as necessary.




                                                              Page 23 of 33
                                                        The Market Reform Lineslip
                  LINESLIP STRUCTURE                                                              LINESLIP EXAMPLE

EXPERT(S) FEES       The party(ies) responsible for the                          EXPERT(S) FEES   As agreed by the agreement parties for
COLLECTION:          collection of experts fees. Where this is                   COLLECTION:      each insurance bound
                     the same on each insurance bound it
                     can be specified here. Where it is likely
                     to vary by declaration “As agreed by
                     the agreement parties for each
                     insurance bound” should be stated
                    There are six options available under
                    the experts fees collection
                    arrangements. These options can be
                    found in Appendix C of this document.
                    N.B. this heading is optional on
                    Reinsurance business.


BUREAUX       Any specific arrangements relating to the                          BUREAUX          Delinked accounts for each insurance
ARRANGEMENTS: bureaux       including    administrative                          ARRANGEMENTS:    bound to be presented by Broker to XIS.
              arrangements for premium settlement,
              delinked accounting, and policy signing
              or basis of policy agreement clauses.

NON BUREAUX   To be used as appropriate to record and                            NON BUREAUX      (To be inserted if any.)
ARRANGEMENTS: specify provisions relating to Insurers                            ARRANGEMENTS:
              outside of the bureau.

SPECIAL             Any other arrangements affecting the                         SPECIAL          (To be inserted if any)
ARRANGEMENTS:       contract which cannot be more                                ARRANGEMENTS:
                    specifically accommodated in the
                    preceding headings




                                                                 Page 24 of 33
                                                          The Market Reform Lineslip




                                                                  INFORMATION


Details of any information provided to Insurers to support the                    Loss History as provided by the Broker at 1st August
assessment of the Lineslip at the time of placement. Where                        2006:
the information is appropriate for inclusion in the Lineslip it
should be shown here. Where the size or format of the                             Year       Net Absolute Premium    Incurred Losses
information is not suitable for inclusion the location of the                     2002/03:   GBP 6,000,000           GBP 4,000,000
information should be clearly referenced under this section                       2003/04:   GBP 6,500,000           GBP 3,232,897
and should be made available to all Insurers during placing.                      2004/05:   GBP 8,786,234           GBP 5,675,987
                                                                                  2005/06:   GBP 3,000,987           GBP 2,987,564
                                                                                  2006/07:   GBP 5,000,000           GBP 3,200,000




                                                                  Page 25 of 33
                                                     The Market Reform Lineslip

                                                    FISCAL AND REGULATORY

                  LINESLIP STRUCTURE                                                           LINESLIP EXAMPLE
TAX PAYABLE BY     Any premium taxes and charges payable by                  TAX PAYABLE BY    None.
UNDERWRITER(S):    Insurers from the premium paid to them e.g.               UNDERWRITER(S):
                   Australian Income Tax. Any premium taxes
                   and charges payable by the Insured in
                   addition to the premium which are collected or
                   administered by Insurers should be shown in
                   the “Taxes Payable by (Re)Insured and
                   Administered by Underwriters” heading of the
                   Contract Details section.

US                                                                           US                Various as per each insurance bound.
CLASSIFICATION:    To be entered as appropriate – e.g. if Risk is            CLASSIFICATION:
                   in US Dollars

NAIC CODES:        To  be    included   only   where           US            NAIC CODES:       Various as per each insurance bound
                   CLASSIFICATION is “US Reinsurance”.

RISK CODES:        These are allocated to the Lineslip by the                RISK CODES:       Property – P3
                   leading Lloyd’s syndicate so that the relevant                              Liability – UA
                   FDO signings can be completed.
FSA CLIENT         To be included on all business. There are 6               FSA CLIENT        Various as per each insurance bound.
CLASSIFICATION:    possible options, please refer to the Appendix            CLASSIFICATION
                   B of this document for further information.

IS BUSINESS        This heading must be included if the FSA                  IS BUSINESS       Various as per each insurance bound.
SUBJECT TO         Client Classification heading specifies "Retail"          SUBJECT TO
DISTANCE           or "Retail Exempt". If the FSA Client                     DISTANCE
MARKETING          Classification         heading        specifies           MARKETING
DIRECTIVE?         "Commercial", "Large Risk", “Group Risks" or              DIRECTIVE?
                   "Reinsurance" it should be omitted. Where it
                   appears the only applicable answers are
                   "Yes" or "No".

                                                             Page 26 of 33
                                    Market Reform Lineslip

APPENDIX B – FSA Client Classification Headings Defined




     Classification                 FSA Classification description
     Retail                         Dealing with a retail (private) customer acting outside of their
                                    trade or profession. Includes sole trader/partnership, where
                                    insurance includes elements of retail risk. [Includes private
                                    large risks within EEA, see Large Risk]
     Retail Exempt                  Exempt insurance warranty risks relating to breakdown, loss
                                    of, or damage to non-motor goods supplied, or travel
                                    insurance for damage to, or loss of, baggage and other risks
                                    linked to travel booked with a travel agent.
     Commercial                     Dealing with a commercial customer
     Large Risk                     Dealing with a commercial customer (Marine, Aviation, or
                                    Transport (MAT), Credit and Suretyship, or Property &
                                    Liability risks (based on meeting two of the following criteria:-
                                    balance sheet size of 6.2m euro, net turnover of 12.8m euro
                                    or have more than 250 employees)). Excludes any large risk
                                    insured in name of a retail customer.
     Group Risks                    A group policy sold to a customer (retail, commercial or large
                                    risk) for the benefit of policyholders in relation to their
                                    common employment occupation or activity where some or all
                                    are capable of being a retail customer (with requirement to
                                    provide a policy summary for policyholders, with policy
                                    available on request)
     Reinsurance                    Reinsurance worldwide.

Please note if the FSA Client Classification heading is completed “Retail” or “Retail Exempt” the
heading “Is Business Subject to Distance Marketing Directive?” must be included and answered
either “Yes” or “No”.




                                          Page 27 of 33
                                    Market Reform Lineslip

APPENDIX C – Expert Fees Collection

Context

As part of the market’s desire for flexibility in the way insurance contracts are processed, an
experts’ fees collection scheme has been previously agreed. This scheme allows affected parties
to choose a collection process best suited to the particular circumstances of the individual policy.
The Market Reform Lineslip includes a slip heading of “Expert(s) Fees Collection” within the
“Subscription Agreement” section. This is where the particular option chosen from the list below
must be recorded.

Options

The options must be selected from and agreed upon by Brokers and Insurers at the time of
placement along with any other qualifications or provisions deemed necessary by any of the
affected parties.

1. Named service provider to collect London market share only.
2. Named service provider to collect all slip security, including overseas.
3. Named service provider to collect only overseas percentages in conjunction with Option One
   above.
4. Brokers to collect fees.
5. Broker to collect experts' fees, to be remunerated on a financial basis agreed between the
   Insurers and Broker at time of placement.
6. Any other agreement that can be determined between affected parties at time of slip
   placement.

N.B. The Slip Leader must ensure that any special fee bill collection arrangements with third party
service providers which the expert in question has in place are not prohibited or adversely affected
by the selection process above.

N.B. Where an option collects fees only in respect of just London or just overseas (Options 1 & 3)
and there are subscribing Insurers from both then more than one option must be specified.

Scope

The slip heading is available to record the necessary information on all Market Reform Lineslips.

The “Expert(s) Fees Collection” heading is optional on reinsurance business but due consideration
should be given to facultative reinsurances where claims control or co-operation clauses may exist
with fees payable by London reInsurers.




                                          Page 28 of 33
                                 Market Reform Lineslip

APPENDIX D – Hold Cover Provisions

Where the Agreement Parties have quoted a premium for a specific risk and have finalised
all contractual terms and conditions for that risk, OR where the Agreement parties have
quoted a premium for a specific risk and have finalised all contractual terms and
conditions for that risk and have required the London Market Broker to resolve a list of
pre-conditions, the Broker can confirm cover to the policyholder upon confirmation that the
pre-conditions have been met.

The Broker in such arrangements cannot vary:
A.        the premium or contractual terms and conditions quoted by the Agreement
          Parties; and/or
B.        the pre-conditions.

For the avoidance of doubt where one or more of the Agreement Parties for each
insurance bound have set a pre-condition for the supply of information pertaining to the
contract within a defined time period, then that agreement party may at the time of setting
that pre-condition, permit the Broker to extend that defined time period by a reasonable
amount of time. Any such permission extended to the Broker must be stated on the
declaration slip and it is recommended that a maximum period of extension is shown.




                                      Page 29 of 33
                                             Market Reform Lineslip

APPENDIX E – Line Conditions

The Contract Certainty Code of Practice requires Insurers to phase out the practice of
applying Stamp and Line Conditions. A Stamp Condition is defined as one which is built
into an Insurers stamp and therefore appears on every risk to which that stamp is applied
by that Insurer. A Line Condition is defined as one manually applied by Insurers on a case
by case basis against their written line.

This appendix identifies how some of the more common Line Conditions should be
managed.

Table 1 lists those Line Conditions that compromise Contract Certainty and should not be
used.
Table 2 lists those Line Conditions that should not be used as provisions are made in the
body of the slip.
Table 3 lists risk specific Line Conditions which are acceptable as they cannot be readily
catered for in the slip. Please note that these risk specific Line Conditions cannot be
stated as Stamp Conditions.

                   Table 1: Line Conditions that if used breach Contract Certainty requirements

LINE Condition                     REASON FOR PROHIBITION

Wording to be agreed               Contract Certainty requires wordings to be agreed before the Insurer formally commits
                                   to the contract.
All signing instructions other     All other signing instructions are imprecise and therefore ambiguous, e.g. X% to sign
than “lines to stand”              Y%.



Table 2: Line Conditions provided for in either Contract Details or Subscription Agreement
                       sections and not the Security Details section

LINE               Intended Effect       Guidance
Condition
All terms          The Insurer           Insurers wishing to agree all endorsements for their own proportion should insert
conditions,        wants to agree all    “XYZ Insurer to agree all terms conditions, amendments, deletions and
amendments,        endorsements,         endorsements” under the heading BASIS OF AGREEMENT TO LINESLIP
deletions,         changes to terms      CHANGES.
special            and conditions
acceptances        and special           N.B. The General Underwriter Agreement (GUA) does not apply to Lineslips.
and                acceptances, etc
endorsements
to be agreed




Warranted          Condition in          This is a premium payment term and should be clearly expressed in the
premium            relation to the       CONTRACT DETAILS section under the “PAYMENT TERMS” heading.
payable within     payment of the
60 days of         premium,
inception          warranting that it
                   be paid within 60
                   days of inception.
SDD 14/11/05       Notification of the   The Settlement Due Date by which the Insurers wish to receive their premium or
                   expected              the due date of the 1st instalment if the premium is on a deferred basis should be
                   premium               stated under the Settlement Due Date heading in the SUBSCRIPTION
                   payment date.         AGREEMENT section.




                                                     Page 30 of 33
                                                 Market Reform Lineslip

LINE                Intended Effect        Guidance
Condition
Excluding Hull      Marine exclusion       This is a condition to the contract and must be stated under the “Conditions of
War                 condition of loss,     Each Insurance Bound” heading in the CONTRACT DETAILS section of each
                    damage, liability      insurance bound.
                    or expense
                    arising from war
                    to a ship hull.
Claims              A condition            The RULES AND EXTENT OF ANY OTHER DELEGATED CLAIMS AUTHORITY
Handling            providing for XCS      heading in the SUBSCRIPTION AGREEMENT section provides for this claims
Authority           to agree claims        handling arrangement.
delegated to        on behalf of the
XCS                 slip leader.
Each                A condition            The several liability notice LSW1001 must be stated under the SEVERAL
underwriter to      ensuring that          LIABILITY heading in the CONTRACT DETAILS section to ensure that all parties
the extent of       each Insurer is        to the contract are fully aware of the notice.
several liability   liable only for
                    their amount of
                    risk (Limited
                    Liability).
All claims to be    A condition            Insurers wishing to agree all claims should insert their name under the CLAIMS
agreed              mandating that a       AGREEMENT PARTIES heading in the SUBSCRIPTION AGREEMENT section.
                    particular carrier     N.B. – Lloyd’s syndicates must be mindful of the terms of the Lloyd’s Claims
                    wants to agree all     Scheme 2006 before adding their name as a Claims Agreement Party. Only the
                    claims.                first participating Lloyd’s Insurer (and optionally the second in respect of special
                                           category claims) may agree claims.

Notify              A provision            N.B. Not permitted for use on a Lineslip
cancellation at     commonly found
anniversary         in contracts of        This is because it is not permitted for use on any slip by Lloyd’s managing
date                insurance for          agents. Nor is it permitted for use by non-Lloyd’s Insurers unless that
                    more than a year,      contract is continuous and no Lineslip may continue for more than 18
                    and permits            months.
                    either party to
                    serve notice of
                    cancellation at
                    the anniversary
                    date, thereby
                    effectively
                    reducing the
                    security of such a
                    contract to that of
                    a single year and
                    enabling parties
                    to renegotiate for
                    a subsequent
                    year.

                    Table 3: Acceptable Line Conditions

lINE Condition                            Intended Effect                      REASON FOR RETENTION


Line to stand                             A condition to ensure that a         A recognised and acceptable line condition.
                                          line stays as it is written and is
                                          not signed down.
Excluding Letters of Credit and           A condition imposed by the           Risk specific heading particular to reinsurance
Outstanding Claims Advances               carrier where they will not          business and not catered for in the slip.
(may relate additionally, or only, to     provide Letters of Credit and
incurred but not reported (IBNR)          Outstanding Claims
claims)                                   Advances.




                                                         Page 31 of 33
                                       Market Reform Lineslip

APPENDIX F – Unique Market Reference Guidance

The UMR must be stated in the Contract Details section in the correct format:

             (i)     All UMRs must start “B” which must be followed by the Lloyd’s Broker
                     number. If the Broker number is three digits long it should be prefixed by a
                     zero. If the Broker number is “123” your UMR would therefore start
                     “B0123”. If the Broker has a four digit Broker number such as “4567” it
                     would be “B4567”.
             (ii)    After the Broker number up to 12 alphanumeric characters must be
                     provided. There is no prescribed standard for this, although most Brokers
                     tend to use their policy number.
             (iii)   The UMR as a whole must be unique. This means that when a contract is
                     renewed it cannot keep the same UMR.
             (iv)    The UMR must not contain any spaces, hyphens, slashes or other
                     punctuation. Only numbers 0-9 and letters A-Z may be used.
             (v)     The UMR is not case sensitive. Whether it is provided as upper case or
                     lower case, many of the systems and current EDI messages used in the
                     market will convert it to upper case.

             In respect of mid term market changes, where the handling Broker changes,
             the new Broker must keep and use the old Broker’s UMR. When the contract
             renews the handling Broker can amend the UMR.




                                             Page 32 of 33
                                                            Market Reform Lineslip

APPENDIX G – Guide to Order Hereon

This appendix explains how orders may be expressed in the Market Reform Lineslip.

CIRCUMSTANCES                   OLD PANEL ONE NOTATION                                         MARKET REFORM LINESLIP NOTATION
EXAMPLE A –
PERCENTAGE OF WHOLE                             %           Order     Order     Closed for     ORDER HEREON: 100% of 100%
                                Written Lines   Part   Of   Whole     100%      100%           BASIS OF WRITTEN LINES: Percentage of Whole
Client A gives the Broker a
100% order and they are the
only Broker involved in the
placement.
EXAMPLE B –                                                                                    ORDER HEREON: 50% of 100%
PERCENTAGE OF ORDER                                                                            BASIS OF WRITTEN LINES: Percentage of order
                                                %           Order     Order     Closed for
Client B gives the Broker a     Written Lines   Part   Of   Whole     50%       100% of 50%
50% order and decides to self
insure the rest.
EXAMPLE C – PART OF                                                                            ORDER HEREON: 50% of GBP 200
WHOLE                                                                                          BASIS OF WRITTEN LINES: Part of whole
                                                %           Order     Order       Closed for
Client C gives a Broker         Written Lines   Part   Of   Whole     GBP 100     50% of
monetary order of GBP 100                                                         GBP 200
where the total sum insured
was GBP 200. Lines are
written as a monetary amount
as part of the total sum
insured. Signed lines are
shown as part of the sum
insured.




                                                                    Page 33 of 33

								
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