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The Market Reform Slip - londonmarketgroup.co.uk

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					The Market Reform Slip




          June 2006




         Page 1 of 44
                                                   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 slip ....................................................................4
6.     Variations to the Slip.........................................................................................................4
7.     Structure of the Slip ..........................................................................................................5
       7.1    Panel 1 removal ....................................................................................................5
       7.2    General ...................................................................................................................7
       7.3    Risk Details Section ..............................................................................................7
       7.4    Subscription Agreement Section ........................................................................7
       7.5    Fiscal and Regulatory Section ............................................................................7
       7.6    Security Details Section .......................................................................................8
8      Slip Headings per section ................................................................................................8
       8.1    Risk Details – All classes of business................................................................8
       8.2    Risk Details Section – Type of business specific.............................................9
       8.3    Subscription Agreement Section - All Slips ......................................................9
       8.4    Information Section - All Slips .......................................................................... 10
       8.5    Fiscal & Regulatory Section-All Slips.............................................................. 10
9.     Further Information ........................................................................................................ 10

     Appendix A:                     Slip Headings Defined                                                                                  11
     Appendix B:                     An Example of a Compliant Non-Marine Direct Slip                                                       19
     Appendix C:                     FSA Client Classification definitions                                                                  36
     Appendix D:                     Expert Fees Collection                                                                                 37
     Appendix E:                     Stamp/Line Conditions                                                                                  38
     Appendix F:                     UMR Guidance                                                                                           41
     Appendix G:                     Model Signing Provisions                                                                               42
     Appendix H                      Guide to Order Hereon                                                                                  44
                             The Market Reform Slip June 2006


1.   Introduction
     The LMP slip was introduced in October 2001 and was mandated by the Lloyd‟s
     Franchise Board for business incepting from the 2nd January 2004. This Market Reform
     Slip June 2006 replaces the LMP April 2005 slip. 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 slip 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 slip for open market business
     and defines the business that falls within the scope of the Lloyd‟s Franchise Board
     mandate. This document has been agreed by the Market Reform Group.


2.   Scope
     The Market Reform Slip should be used for the following:-

          All firm quote and firm order open market insurance and reinsurance business placed
           by London Market Brokers where the contract falls within the definition of London
           Market contracts as specified in the Contract Certainty Code of Practice issued by the
           MRG.
          All Marine open cargo covers and declarations attaching thereto. Marine open cargo
           covers are defined as those risks where the insured has, or is expected to acquire, an
           insurable interest in each declaration bound.
          All Declarations or offslips attaching to lineslips and applicable declarations off limited
           binding authority agreements.

         N.B. The Market Reform Slip may be used for indicative quotes.


3.   Out of Scope
     The Market Reform Slip must not be used for:-

          Binding Authorities as these have separate guidelines-
           Refer to http://www.marketreform.co.uk/Binding_pubs1.htm
          Lineslips as these have separate guidelines-
           Refer to http://www.marketreform.co.uk/LMP_lineslip.htm
          Slips that fall within the Market Reform Slip Exempt – Client Requirement category

     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


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 –

     (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 –

                                          Page 3 of 44
                            The Market Reform Slip June 2006


      (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 slip has been
         completed in accordance with the relevant slip guidelines from time to time issued by
         the MRG.


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

     Individual feedback sessions are held between the MRPO slip audit team and carriers and
     Brokers. Reports specific to the carrier or Broker are prepared for each feedback session,
     highlighting the common errors on slips with details given on how to improve slip quality
     and appropriate remedial actions. To arrange an individual feedback session for your
     organisation please contact James.willison@lmpoffice.com.

     On-site slip checking at the respective carrier is also carried out by the audit team to
     provide quality feedback and on-site training sessions.

     In order to communicate progress to the market, the MRPO publishes monthly reports on
     Slip quality based on the checks conducted by the MRPO slip audit team.


6.   Variations to the Slip
     The following are valid variations to the slip as incorporated into this document:

     6.1 The order of slip headings in the RISK DETAILS section is not fixed.
     6.2 Some slips will be based on policy forms that do not use the standard slip headings.
         As an example the policy form could include a heading called Name of Client rather
         than Insured. In these instances it is a requirement that the term used in the policy
         form be also used in the slip in order to aid contract certainty.
     6.3 There will be contract specific slip headings that will need to be incorporated into the
         slip to allow for any unusual or additional RISK DETAILS as deemed necessary.




                                        Page 4 of 44
                               The Market Reform Slip June 2006


7.    Structure of the Slip
      Previous versions of the slip consisted of three distinct panels of information namely:-

      Panel 1      -   Data Form for bureau processing
      Panel 2      -   Four separate sections called RISK 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 Slips. To simplify the structure of the
      remaining slip the concepts of panels has been dropped and there are now five distinct
      sections. What was called Panel 3 now becomes the SECURITY DETAILS section. This
      structure is shown in the diagram below.

                        OLD LMP SLIP STRUCTURE                        MARKET REFORM SLIP STRUCTURE


       PANEL                   PANEL 2                 PANEL                   (RISK DETAILS)
         1                                               3
                             (RISK DETAILS)

                                                                          SUBSCRIPTION AGREEMENT


                        SUBSCRIPTION AGREEMENT
                                                                                INFORMATION


                             INFORMATION                                    FISCAL & REGULATORY



                          FISCAL & REGULATORY                                 SECURITY DETAILS




      Some contracts have previously required additional Panel 1 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 slip headings.
      B)        Data that is required and will be captured in new/additional headings within the
                body of the slip; and
      C)        Data that is obsolete.

      A:        Incorporate data in existing slips headings
           Current Panel 1 Data                           Already Captured Under
                  Items             Heading Name                      Slip section
       Risk code                    Allocation of Premium to Coding   Fiscal and Regulatory
       Assured/Reassured            Insured or Reinsured              Risk Details
       Account
       Gross Premium                Premium                           Risk Details




                                                Page 5 of 44
                       The Market Reform Slip June 2006

B:     Incorporate data in new/additional slips headings
 Current Panel 1 Data                                   Now Becomes
        Items               Heading Name                       Slip section
Unique Market               Unique Market Reference            Risk Details
Referenc e
Written Lines               Basis of Written Lines               Subscription Agreement

Order/ Closed For           Order Hereon                         Risk Details
Settlement Due Date         Settlement Due Date                  Subscription Agreement
Overseas Broker             Overseas Broker                      Fiscal and Regulatory
DEF                         (Deferred Premium Period Of          Subscription Agreement
                            Credit)
ADJ                         (Adjustment Premium Period Of        Subscription Agreement
                            Credit)
Country of origin           Country of origin                    Fiscal and Regulatory


C:     Obsolete Panel 1 data
    Current Panel One Data Item                         Reason why data is obsolete
Policy Number                             The Unique Market Reference (UMR) is a superior
                                          reference since it gives both the Policy number and the
                                          Lloyd‟s Broker number and the UMR is now part of RISK
                                          DE TAILS.
                                          This information was an unnecessary repetition of the
Currency                                  currency of the premium already shown in the slip.
Slip Registration                         Slip Registration scheme no longer active.
                                          XIS have been granted access to the Binding Authority
Binding Authority Registration Number     Registration System and can now locate these
and Date                                  references in the application.
TOC Tribunal                              The tribunal is long since disbanded.
                                          Xchanging will monitor all final adjustments thus does not
Adjustable Scheme Indicator               need to be specified on a risk by risk basis.
USB/NUS/ US                               No longer required.
VAT Code                                  Information not required from Brok er.
DTI Code                                  Information no longer required.
Serial Number                             Referenc e field not used.
Certificate Numbers                       Information no longer required.
EC-CCI/ Establishment/Services/NA         No longer an E U regulat ory 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 P REMIUM heading.
                                          Where applicable, a Claims Payable abroad (CPA )
CPA Indicator                             clause will be shown under CONDITIONS heading.
                                          Xchanging already have this information in their enquiry
Bureau Scheme Number                      systems thus do not do need Broker to quote it.
                                          The same information can be found in the Security
Bureau Signed line shares                 Details section of the slip.
                                          Majority of Brokers never use it and those that do have
Referenc e Number                         confirmed they do not need it in the slip.




                                     Page 6 of 44
                         The Market Reform Slip June 2006

7.2      General
     There are five separate sections called RISK DETAILS, SUBSCRIPTION
      AGREEMENT, INFORMATION, FISCAL & REGULATORY and SECURITY DETAILS.
      The inclusion of the Risk Details heading in the slip is optional, not the content. The
      other four headings must be included.
     There are standard headings within the Risk Details, 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 slip 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 slip 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
      Insurer formally commits to the contract.

7.3      Risk Details Section
     During placing the Broker and Insurers must ensure that the slip clearly states all the
      contract terms, specifies the terms and language to be used in the Evidence of Cover
      issued to the client, 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. (Note - National Laws (e.g. Marine Insurance Act 1906;
      German General Rules of Marine Insurance; etc) do not need to be attached in full, as
      they are in common usage and freely available to all interested parties).
     A slip can include subjectivities which are/will be outstanding at inception.
      Subjectivities should be imposed within the slip under the SUBJECTIVITES heading in
      the Risk Details section. They must not be recorded against insurers‟ lines in the
      Security Details section. All subjectivities imposed by insurers must specify the
      responsibilities and timescales for resolution and the consequences of failure.
     Standard slip 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
      slips and has been moved to the Risk Details section. Model signing provisions should
      be used where possible to provide certainty of signed lines at inception. Any variation
      of signed lines resulting from these signing provisions will need to be the subject of
      documented agreement of the (re)insured and all affected (re)insurers. The use of
      instructions “line to stand” or equivalent is valid. The use of any other signing
      instructions, e.g. “X% to sign Y%” leads to ambiguity and should be discontinued.

7.4      Subscription Agreement Section
     Insurers must not delete the Subscription Agreement section of the slip 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.

7.5      Fiscal and Regulatory Section
     Additional headings have been incorporated in the Fiscal and Regulatory section to
      align the Market Reform Slip with the ACORD global placing document.




                                      Page 7 of 44
                                The Market Reform Slip June 2006

    7.6        Security Details Section
          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.
          The Contract Certainty Code of Practice requires insurers to phase out the use of
           stamp conditions and accordingly these should be phased out during the
           implementation period of the Market Reform Slip. Such 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 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 slip can be
     found in Appendix A.


8    Slip Headings per section

    8.1        Risk Details – All classes of business
          1. The headings in the table below apply to all Market Reform Slips for all classes of
             business.
          2. ** indicates a heading where the slip heading used may differ in order to align with
             the policy form used.
          3. The use of () around a slip heading indicates an optional heading.

                                MANDATORY HEADI NGS FOR ALL SLIPS
                     SLIP HEADING                            NOTES
         UMR
         (Attaching to del egated underwriting     Where applicable – Can be omitted if none exist
         contract number)
         Type
         Insured or Reinsured                      **
         Period or Period and Cancellation         **
         Provisions or Voyage
         Sum Insured or Limits or Limits and       **
         Retentions/deductibles or Treaty Detail
         or Treaty Limits
         Order Hereon
         Conditions                                **
         (Notices)                                 Where applicable – Can be omitted if none exist
         (Express Warranties)                      Where applicable – Can be omitted if none exist
         (Conditions Precedent)                    Where applicable – Can be omitted if none exist
         (Subjectivities)                          Can be omitted if none exist
         Several Liability
         Choic e of Law & Jurisdiction
         Premium or Rate                           **
         Payment Terms
         Brokerage
         Other Deductions from Premium
         Taxes payable by (Re) Insured and         **
         administered by Underwriters
         (Rec ording, Transmitting & Storing       Where applicable – Can be omitted if none exist
         Information)
         Signing Provisions

                                             Page 8 of 44
                          The Market Reform Slip June 2006

8.2        Risk Details Section – Type of business specific
                    NON-MANDATORY HEADI NGS BY TYP E OF BUSINESS
                           Other headings can be included if required
       Direct &        Direct & Facultative R/I      Exce ss of Loss Treaty Non-Marine /
    Facultative R/I             Marine                             Aviation
     Non-Marine
  Form               Form                       Form
  Interest           Vessels or Conveyance      Class of Business (& any Exclusions)
  Situation          Interest                   Territ orial Scope
                     Trading                    Reinstatement Provisions
                                                Wording
                                                Co-Reinsurance Warranty
                                                Loss Reserve & Interest

                      NON-MANDATORY HEADI NGS BY TYP E OF BUSINESS
                             Other headings can be included if required
       Exce ss of   Proportional Treaty       Proportional Treaty         All Declarations,
      Loss Treaty       Non-Marine /                Marine                 insurance and
        Marine            Aviation                                         reinsurance off
                                                                              Lineslips
  Form              Form                  Interest & any Exclusions   Attaching to delegated
                                                                      underwriting contract
                                                                      number
  Interest & any    Class of Business &   Wording
  Exclusions        any Exclusions
  Reinstatement     Territ orial Scope      Premium Reserve &
  Provisions                                Interest
                    Commission or           Loss Reserves & Interest
                    Overriding
                    Commission
                    Profit Commission       Cash Loss Limit
                    Premium Reserve &       Bordereaux
                    Interest
                    Loss Reserve &          Accounts
                    Interest
                    Portfolio


8.3        Subscription Agreement Section - All Slips
                            MANDATORY HEADI NGS FOR ALL SLIPS
          SLIP HEADING                                       NOTES
  Slip Leader
  Settlement Due Date
  Basis of Written Lines
  (Deferred Premium Period of     Where premium is to be paid via bureau deferred scheme
  Credit)
  (Adjustment Premium Period of Where applicable
  Credit)
  (Other Agreement Parties for    Must only be present if the GUA is used
  Cont ract Changes, if any)
  Basis of Agreement to Cont ract
  Changes
  Document Production
  Claims Agreement Parties
  Basis of Claims Agreement
  Claims Administration
  Rules and Extent of any other
  Delegated Claims Authority

                                         Page 9 of 44
                               The Market Reform Slip June 2006

       (Experts Fees Collection)          Optional on Reinsurance risks if none exist
       Bureaux Arrangements
       (Non-B ureaux Arrangements)        Where applicable



     8.4       Information Section - All Slips

                                 MANDATORY HEADI NGS FOR ALL SLIPS
               SLIP HEADING                                NOTES
       Information

     8.5       Fiscal & Regulatory Section-All Slips

                                 MANDATORY HEADI NGS FOR ALL SLIPS
               SLIP HEADING                                          NOTES
       Tax Payable by Underwriters
       Country of Origin
       Overseas Broker                    To be entered as   appropriate
       (Surplus Lines Broker)             To be entered as   appropriate
       (State of Filing)                  To be entered as   appropriate
       (Licence Information )             To be entered as   appropriate
       (US Classification)                To be entered only if premium is in US Dollars
       (NA IC Codes)                      To be included only if Risk is US Reins urance
       Allocation of Premium to
       Coding
       (Allocation of Premium to year     To be entered as appropriate
       of account)
       FSA Client Classific ation
       (Is business subject to distance   To be specified if FSA Client Classification is specified as
       marketing directive?)              Retail or Ret ail Exempt



9.    Further Information
     For further information on the Mark et Reform Slip please contact:

       Type of Query Contact                                                  Address
       General       James Willison – Market Reform                           Gallery 6
       Queries       Programme Office                                         Lloyd‟s
                     Tel: 020 7327 5231                                       1 Lime Street
                     Fax: 020 7327 5887                                       LONDON
                     Email: james.willison@lmpoffice.com
       Brokers       Mark Barwick – LMBC                                      BIBA House
                     Tel: 020 7397 0207                                       14 Bevis Marks
                     Fax: 020 7626 0564                                       LONDON
                     Email: mark.barwick@lmbc.co.uk
       Lloyd‟s       Allison Goddard- LMA                                     Suite 1085
       Insurers      Tel: 020 7327 4872                                       Lloyd‟s
                     Fax: 020 7623 9390                                       1 Lime Street
                     Email: allison.goddard@lloyds.com                        LONDON
       IUA Insurers  John Hobbs – IUA                                         Suite LG1
                     Tel: 020 7617 4445                                       LUC
                     Fax: 020 7617 4440                                       3 Minster Court
                     Email: john.hobbs@iua.co.uk                              LONDON




                                            Page 10 of 44
                                                           APPENDIX A – Slip headings defined
The following headings must be present for all Market Reform slips for all classes of business. Use of the () indicates that if no details are to be entered
under that slip heading then it can be omitted.

Risk Details Section – All Classes
HEADING                               DEFINITION
UNIQUE MARKE T REFERE NCE:            This reference can be incorporat ed as a separate heading or as a header on each page of the slip. It is us ed 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.
(ATTACHING TO DELE GA TED             This heading is applicable to all declarations off line slips, marine open cargo covers and limited binding authoritie s that
UNDERW RITING CONTRA CT               are shown to insurers. This heading should specify the unique market reference to which the declaration in question
NUMBE R):                             attaches
TYPE:                                 This heading must incorporate details of the type of Contract e.g. Marine Hull.
INS URED: OR REINS URE D:             The (re)insured‟s name, and where appropriate their address and/or business.
PERIOD: OR PERIOD A ND                The inception date and time of day, expiry date and time of day as well as the applicable time zone. As an alternative to
CANCELLA TION P ROV ISIONS: OR        specifying both times it is acceptable to specify “both days inclusive”, although the applicable time zone is still required.
VOYAGE:
                                      Where the risk is for a continuous contract the anniversary date is to be included in place of the expiry dat e, please note
                                      that the applicable time zone is still required.

                                      However for risks where specific dates of inception or expiry are not known, for example voyages, constructions and
                                      sporting events, the specific events determining the period must be stated.

                                      On proportional treaty business where the heading Period and Cancellation Provisions is used cancellation provisions, if
                                      any, must be stated including reference to what happens to business in force at cancellation, if applicable, and whether
                                      there is any option for either party in this respect.

                                      On Risks Attaching During contracts it is acceptable to state “any time zone”.
SUM INSURED: OR LIMITS: OR            Sum insured or reinsured or indemnity or monetary limits.
LIMITS AND
RE TENTIONS/DE DUCTIBLES: OR
TREA TY DE TA IL: OR TREA TY
LIMITS:
ORDER HEREON:                         The heading Order hereon must det ail the Slip closings i.e. whether the signed lines are percentages of the whole or
                                      percentages of the slips 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 cont racts. Refer to Appendix H for
                                      guidance on correct completion.
CONDITIONS:                           Identification, qualification or variation in coverage including the wording, clauses, conditions and amendm ents to any
                                      clauses in basic form. The slip must reference or attach all registered wordings and registered clauses. All non-
                                      registered wordings and non –registered clauses must be attached in full.


                                                                          Page 11 of 44
                                                      APPENDIX A – Slip headings defined
HEADING                          DEFINITION
(NOTICES):                       An optional heading where any notices other than Several Liability Notice must be recorded. E.g. Lloyd‟s privacy
                                 statement, LSW 1135 B.
(E XP RESS WARRANTIES ):         Any express warranties that apply to the contract, over and above any that may be incorporated in the Policy Form or
                                 implied warranties from legislation such as the Marine Insurance Act 1906, including the consequences of non-
                                 compliance. If there are no express warranties this heading would not be included.
(CONDITIONS PRE CEDE NT):        Any conditions precedent that apply to the contract, over and above any that may be incorporated in the Policy Form or
                                 legislation, including the consequences of non -compliance. If there are no conditions precedent this heading would not
                                 be included.
(SUB JECTIV ITIES ):             A slip can include subjectivities for example an outstanding survey requirement. Subjectivities must be imposed within
                                 the slip, in the Risk Details section and must not be shown in the Security Details section against insurers‟ lines. All
                                 subjectivities should set out the condition/action that needs to occur, by whom and to what standard; the applicable
                                 timescale within which the condition is to met; the terms which are to apply until the condition is met; and the
                                 consequences which are to follow if the condition is not met. If a subjectivity is outstanding at inception then it
                                 must be stated as a fully claused condition of the coverage given in the slip and relevant evidence of cover
                                 issued.
SEVERAL LIAB ILITY:              The several liability notice that applies. This must be either the insurance or reinsurance ve rsion of LSW1001, and must
                                 be included in full on all slips to ensure the (re)ins ured is fully aware of the notice.
CHOICE OF LAW & JURISDICTION:    The court that will have jurisdiction in the event of a dispute between ins ured and insurers and the law that will apply.
                                 Further Lloyd‟s information on this heading is available in Lloy d‟s bulletins Y3406 Y3327,and for LMA members letter
                                 LTM04-056-WFR.
PREMIUM: OR RA TE:               The premium to be paid by the insured. Premiums in res pect of War coverage must be identified separately to
                                 premiums in respect of other insured perils. Any premium instalment information must be shown here and not under the
                                 Payment Terms heading.
PAYMENT TE RMS:                  The Premium Payment Terms applied to the contract by the Slip Leader, including Prem ium Payment Warranties and/or
                                 Conditions. The Settlement Due Date must be shown under the Settlement Due Date heading and not here.
FEE PAYABLE BY CLIENT?           The Brok er should specify whet her the client is paying a fee to them. This should be a simple “Yes ” or “No” ans wer.
(TOTAL B ROKERA GE)              The total brokerage allowance. Should the Broker and insurer agree it is appropriate to separat e total brok erage int o
                                 separate ret ail and wholesale amounts they must use the „Retail Brokerage‟ and „Wholesale Brokerage‟ headings.
(RE TA IL BROKERAGE )            The amount of brokerage being earned by the retail Broker. This heading must only be used in conjunction wit h the
                                 „Wholesale Brokerage‟ heading.
(WHOLESA LE BROKE RAGE)          The amount of brokerage bring earned by the wholesale B roker. This heading must only be used in conjunction with the
                                 „Retail Brokerage‟ heading.
OTHE R DE DUCTIONS FROM          Any additional deductions in monetary amount or a percentage from premium due to insurers e.g. administration fees,
PREMIUM:                         sundry payments, etc.
TA XES PAYABLE BY (RE)           Any premium taxes and charges payable by the (re)insured in addition to the premium stated above, which are collected
INS URED AND ADMINIS TE RED BY   and/or administered by Insurers e.g. UK Insurance Premium Tax. Any premium taxes and charges payable by Insurers
UNDERW RITE RS:                  must be shown in the Fiscal & Regulatory section. If no taxes payable, state none – do not leaving heading blank.
(RE CORDING, TRA NSMITTING &     Details of procedures for storage of data, documents and other information in relation to Data Protection Act.
STORING INFORMA TION):


                                                                    Page 12 of 44
                                                      APPENDIX A – Slip headings defined
HEADING                         DEFINITION
SIGNING                         Slips must contain a signing provision. Model signing provisions are contained in Appendix G to implement the signing
PROV ISIONS:                    principles already agreed for contract certainty.



Additional Risk Details Headings – Direct & Facultative R/I (Non-Marine)
HEADING                         DEFINITION
(FORM):                         The NMA reference or other identification of the policy jacket. The wording or clauses should not be shown here, these
                                should be included in the Conditions heading.
INTE RES T:                     Interest or subject matter insured or nature of liability.
SITUA TION:                     Situation, territorial limits or location.

Additional Risk Details Headings – Direct & Facultative R/I (Marine)
HEADING                         DEFINITION
(FORM):                         The MAR reference or other identification of the policy jacket. The wording or clauses should not be shown here, these
                                should be included in the „Conditions‟ heading.
VESSELS: OR CONVEYANCE:         Name of vessel/conveyance.
INTE RES T:                     Interest or subject matter insured or nature o f liability.
TRADING:                        Territ orial or trading limits or trading warranties.

Additional Risk Details Headings – Excess of Loss Treaty (Non-Marine / Aviation)
HEADING                         DEFINITION
(FORM)                          The J(a) reference or ot her identification of the policy jacket. The w ording or clauses should not be shown here, these
                                should be included in the „Conditions‟ heading.
CLASS OF BUS INESS & ANY        The Classes of business covered by the treaty followed by any specific exclusions.
E XCLUS IONS:
TE RRITORIAL SCOPE:             The Territorial Scope.
REINS TA TEME NT PROV ISIONS:   Provisions for any Reinstatement, including Limit and Additional Premium applicable.
CO-RE INS URA NCE WARRA NTY:    Any Co-Reinsurance warranty to be specified
LOSS RESERVE & INTERES T:       Any loss reserve and applicable int erest thereon to be specified.




                                                                    Page 13 of 44
                                                       APPENDIX A – Slip headings defined
Additional Risk Details Headings – Excess of Loss Treaty (Marine)
HEADING                          DEFINITION
INTE RES T & ANY E XCLUSIONS:    The interest and any exclusions. The nature of the interest must appear first followed by specific exclusions, so that it is
                                 immediat ely apparent which is which.
REINS TA TEME NT PROV ISIONS:    Provisions for any reinstatement including limit and additional premium applicable.
FORM:                            The MAR reference or other identification of the policy jacket. The wording or clauses should not be shown here, these
                                 should be included in the „Conditions‟ heading.

Additional Risk Details Headings – Proportional Treaty (Non-Marine / Aviation)
HEADING                          DEFINITION
FORM                             The J(a) reference or ot her identification of the policy jacket. The wor ding or clauses should not be shown here, these
                                 should be included in the „Conditions‟ heading.
CLASS OF BUS INESS & ANY         Classes of Business must appear first followed by the exclusions separated by a space, so that it is immediately
E XCLUS IONS:                    apparent which is which.
TE RRITORIAL SCOPE:              The territorial scope.
COMMISSION OR OVE RRIDING        The percent age amount of commission needs to be inserted but where it is other than this a clear indication is required.
COMMISSION:
PROFIT COMMISSION:               The percent age amount of profit commission allowed and the percentage for reinsurers‟ expenses must be entered first
                                 under this heading. Following this must be provision, if any, for deficit carry forwards and the basis of calculation. If
                                 there is no deficit carry forward this must be made clear.
PREMIUM RESE RVE & INTE RES T:   If the interest is not a per annum basis this must be stated.
LOSS RESERVE & INTERES T:        If the interest is not a per annum basis this must be stated.
PORTFOLIO:                       For original portfolios between the reassured and reinsurers. Premium and / or loss port folios to be assumed or
                                 returned must be ent ered showing the basis of calculation e.g. in the case of premiums whether it is the actual
                                 unearned or a percentage of the previous twelve months written premiums etc, and in the case of losses whether it is
                                 the actual outstanding losses or a percentage thereof. It must also be shown whether the premium portfolio is subject
                                 to deduction of commission etc and whether it is to be treated as cash or res erve.
CASH LOSS LIMIT:                 Insert amount.
ACCOUNTS:                        Indicate the periods at which accounts are to be rendered and also any provisions for bordereaux or other doc uments
                                 necessary to show on a slip.

Additional Risk Details Headings – Proportional Treaty (Marine)
HEADING                          DEFINITION
INTE RES T & ANY E XCLUSIONS:    The interest insured and the exclusions must be shown but the nature of the account must appear first followed by the
                                 exclusions, separat ed by a space, so that it is immediately apparent which is which.
PREMIUM RESE RVE & INTE RES T:   If the interest is not a per annum basis this must be stated.
LOSS RESERVES & INTERES T:       If interest is not on a per annum basis this must be stated.
CASH LOSS LIMIT:                 The amount and proportion of the treaty to which it is applicable.
BORDEREA UX:                     Indicate the intervals at which provisional or definite bordereaux are to be rendered.


                                                                      Page 14 of 44
                                                     APPENDIX A – Slip headings defined
HEADING                        DEFINITION
ACCOUNTS:                      Indicate the period at which accounts to be rendered.
COMMISSION: OR OVERRIDING      The percent age amount of commission needs to be inserted but where it is other than this a clear indication is required.
COMMISSION:
PROFIT COMMISSION:             The percent age amount of profit commission allowed and the percentage for reinsurers‟ expenses must first be
                               entered. Following this must be provision, if any, for deficit carry forwards and the basis of calculation. If there is no
                               deficit carry forward this must be made clear.

Subscription Agreement – All Classes
SLIP HEADING                    DEFINITION
SLIP LEADE R:                  State who is the Slip Leader. If this is known when the slip is produced it must be added by the Broker. If it is not known
                               when the slip is produced the Slip Leader inserts their company/ syndicate name and number 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 slip it is possible to annotate the right hand side of the slip with the headings
                               OVERALL SLIP LEA DER and LONDON MARKE T SLIP LEADE R. In such cases subsequent provisions will need to be
                               specific in the Subscription Agreement with regard to any leading underwriter agreements or slip leader provisions.
SETTLEMENT DUE DA TE:          The Settlement Due Dat e refers to the date (day, month and year) by which the Insurers wish to receive their premium
                               or the due date of the 1st instalment if the premium is on a deferred basis. Please note that the date shown here is a
                               term of trade and not a policy condition such as a “Premium payment warranty” or a “Premium payment condition”.
                               These must continue to be shown under the Payment terms heading in the Risk Details section. The location of the
                               SDD in this section of the slip does not confer any change in legal effect of the SDD or the implications of non -
                               compliance.
BASIS OF WRITTE N LINES:       The basis on which subscribing (re)insurers written lines are applied to the order or contract. There are three variations
                               that may be used. These are mutually exclusive. No other option may be ent ered under this heading. Further guidance
                               can be found in Appendix H. The options a re:
                                      Percentage of Whole
                                      Percentage of Order
                                      Part of Whole (Can only be used where orders are ex pressed as monet ary amounts and not percentages)
(DEFE RRE D PREMIUM PERIOD     Specify the number of days added to the client due dates of subsequent ins talments. Please note that this heading is
OF CRE DIT):                   only mandatory where premium is to be paid via the bureau deferred scheme.
(ADJUS TME NT PREMIUM PERIOD   Specify the number of days aft er expiry Insurers expect the final adjustment of premium (if any ) to be paid.
OF CRE DIT):
(OTHER AGREEMENT PARTIES       State those Insurers, other than the Slip Leader, who will agree cont ract changes on behalf of the subscribing Insurers
FOR CONTRA CT                  in accordance with the terms agreed below. This must not include t hose Insurers who wish to agree contract changes
CHA NGES, IF ANY ):            on their own behalf. N.B. Care must be taken to avoid conflict with leading underwriter agreements. Thi s
                               heading must therefore only be used when the GUA is being utilised.
BASIS OF                       Specify any leading underwriter agreement that applies, e.g. NMA, LUAMC, GUA and applicable class of business
AGREEMENT                      schedule(s) etc.
TO CONTRACT                    For classes of business where it is market practice, or where specified in the GUA schedule, to list a copy of agreed
CHA NGES:                      endorsements to the following market, the method/media should be specified here e.g. email, link to repositories, etc.

                                                                     Page 15 of 44
                                                      APPENDIX A – Slip headings defined
SLIP HEADING                      DEFINITION
DOCUME NT PRODUCTION:            The type(s) of evidence of cover to be produced, who produces it and any particular requirements e.g. any requirement
                                 for an insurer approved policy.

                                 The appropriate evidence of cover including security must be issued with 30 days of inception. It is a requirement of
                                 contract certainty that the appropriate evidence of cover may be any one of the following: -
                                     E vidence of Cover to be issued by insurers or their agent in the form of a policy document
                                     E vidence of Cover to be provided by "Broker company name" in the form of a complete and accurate copy of
                                        the Placing Slip
                                     E vidence of Cover to be provided by "Broker company name" in the form of a Brokers Insurance Document
                                     E vidence of Cover to be issued by "Broker company name" in the form of a certificate (binding authority
                                        declarations only )

                                 Further guidance regarding insurer approved policies will be issued shortly on t his subject.
CLAIMS AGREEMENT PA RTIES          Identification of the claims agreement parties e.g. Slip Leader, plus the first IUA company and Xc hanging Claims
                                   Services. N.B. The 2006 Lloyd‟s Claims Scheme requires XCS to agree all claims where there is more than one
                                   subscribing managing agent (Lloyd‟s), other than in the case of special category claims where the second Insurer may
                                   optionally act on their own and XCS acts on behalf of the remaining following syndicates.
BASIS OF CLA IMS AGREEMENT:      Specify the basis of the claims proc edure(s) such as the Lloyd‟s 2006 claims scheme for Lloyd‟s participation and IUA
                                 claims agreement practices for company market participation on slip.
CLA IMS ADMINIS TRA TION:          All claims related information with the exception of identification of agreement parties and the basis of claims
                                   agreement must 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 E XTE NT OF ANY        If any of the claims agreement parties specified above have delegated their claims processing and agreement to any
OTHE R DELE GA TED CLA IMS       other party this must be specified here including any limits that may apply, e.g. all claims less than GBP XXXX or
AUTHORITY:                       experts fees GBP XXXX. It is unlikely that the Broker will be aware of any such arrangements that insurers may have,
                                 so the claims agreement parties must incorporate details as necessary.
(E XPE RT(S ) FEES COLLECTION)   The party(ies) responsible for the collection of experts fees. There are six options available under the experts fees
                                 collection arrangements. These options can be found in Appendix D. N.B. this heading is optional on Reinsurance
                                 business.
BUREA UX A RRA NGEME NTS:        Any specific arrangements relating to the bureaux including administrative arrangements for premium settlement,
                                 delinked accounting, and policy signing or basis of policy agreement clauses.
(NON-BUREAUX                     To be used as appropriate to record any specific provisions relating to insurers outside of t he bureau.
ARRA NGEME NTS):




                                                                    Page 16 of 44
                                                     APPENDIX A – Slip headings defined
Information – All Classes
Slip Heading                    DEFINITION
INFORMA TION:                  Details of any information provided to Insurers to support the assessment of the risk at the time of placement. Where
                               the information is appropriate for inclusion in the slip it should be shown here. Where the size or format of the
                               information is not suitable for inclusion it should be clearly referenced in this section and should be made available t o
                               all Insurers during placing.

Fiscal & Regulatory – All Classes
Slip Heading                    DEFINITION
TA X PAYABLE BY                Any premium taxes and charges payable by Insurers from the premium paid to them e.g. Australian Income Tax. Any
UNDERW RITE R(S ):             premium taxes and charges payable by the insured in addition to the premium which are collected or administered by
                               Insurers must be shown in the Taxes Payable by (Re) Insured and A dministered by Underwriters heading of the Risk
                               Details.
COUNTRY OF ORIGIN              Where the demand for the insuranc e comes from. This equates to the count ry of origin of the (re)insu red.
OVERSEAS BROKER:               Details of the overseas intermediary must be completed here where one exists. Where more than one exists this
                               should show the next intermediary Broker in the placing chain. If no overseas agents are involved then this heading
                               should specify “Direct Insured”.
(SURPLUS LINE BROKE R):        The name, surplus lines licence number and state of the US intermediary which is responsible for completing the
                               Surplus lines filing, if any. The full address may optionally be shown. Refer to Lloyd‟s Bull etin Y3768.
(STA TE OF FILING):            The state in which the filings are made needs to be specified. This heading must be completed on all slips that have a
                               US Classification of US Surplus Lines.
(LICE NCE INFORMA TION):       The country, state or province to which a risk will be reported against for regulatory reporting under Lloyd‟s licences.
                               The country of risk is as defined by the country for regulatory or fiscal reporting purposes, as per definitions in the
                               Lloyd‟s country manuals.
(US CLASSIFICA TION):          To be entered if premium is in US Dollars, irrespective of risk location. Only the following values should be entered:
                                    US Surplus Lines
                                    US Reinsurance
                                    Illinois licensed
                                    Kentucky licensed
                                    US Virgin Isles licensed
                                    Non Regulat ed
                                    Various
(NA IC CODES):                 To be included only where risk is US Reinsurance.
ALLOCA TION OF                 The Lloy d‟s risk code(s) allocat ed by the first participating Lloyd‟s insurer specifying how the premium is to be allocated
PREMIUM TO CODING:             and/or details of how the Leading Company would like the premium to be split for signing purposes
(ALLOCA TION OF PREMIUM TO     This heading is only required on contracts written by Lloyd‟s syndicates where the period exceeds 18 months.
YEAR OF ACCOUNT):
FSA CLIE NT CLASSIFICA TION:   To be included on all business. There are 6 possible options, please refer to the Appendix C of this document for
                               further information.


                                                                    Page 17 of 44
                                                    APPENDIX A – Slip headings defined
(IS THE BUSINESS SUBJE CT TO   This heading must be included if the Client Classification heading specifies Retail or Retai l Exempt. If the Client
THE DIS TANCE MARKE TING       Classification heading specifies Commercial, Large Risk, Group Risks or Reinsurance it must be omitted. Where it
DIRE CTIVE ?):                 appears the only applicable answers are Yes or No.




                                                                   Page 18 of 44
                                        APPENDIX B - Example of compliant non-marine direct slip

                                                                               RISK DETAILS


                     SLIP STRUCTURE                                                                         SLIP EXAMPLE

UNIQUE MARKET This reference can be incorporated as a                                    UNIQUE MARKET B012308540HG78
REFERENCE:    separate heading or as a header on each page                               REFERENCE:
                    of the slip. It is used to distinguish individual
                    insurance contracts. It must start with B followed
                    by the Lloyd‟s Brok er number and then a unique
                    reference which cannot have more than 12
                    alphanumeric characters. Refer to Appendix F
                    for guidance on correct completion.

ATTACHING TO        This heading is applicable to all declarations off
DELEGATED           line slips, marine open cargo covers and limited
UNDERWRITING        binding authorities that are shown to insurers.
CONTRACT            This heading should specify the unique mark et
NUMBER:             reference to which the declaration in question
                    attaches
TYPE:                This heading must incorporate details of the                        TYPE:            Non Marine Generic Example Open Market Slip
                     type of Contract e.g. Marine Hull.

FORM:               The NMA reference or other identification of the                     FORM:
                    policy jack et. The wording or clauses should not                                    J (NMA 2420)
                    be shown here, these should be included in the
                    Conditions heading.

**INSURED:          The (re)insured‟s name, and where appropriate                        INSURED:        XY Z Ltd
                    their address and/or business.                                                       123 Wickley Road
                                                                                                         London
                                                                                                         United Kingdom
                                                                                                         L20 1MP




                                                                         Page 19 of 44
                                     APPENDIX B - Example of compliant non-marine direct slip


                 SLIP STRUCTURE                                                                          SLIP EXAMPLE
                                                                                                            st
**PERIOD:        The inception date and time of day, expiry date                      PERIOD:        From: 1 July 2006 GMT
                                                                                                             th
                 and time of day as well as the applicable time                                      To:   30 June 2007 GMT
                 zone. As an alternative to specifying both times
                 of day it is acceptable to specify both days                                        Both days inclusive.
                 inclusive, although the applicable time zone is
                 still required.

                 Where the risk is for a continuous contract the
                 Anniversary date is to be included in place of the
                 Expiry date, please note that the applicable time
                 zone is still required.

                 However for risk s where specific dates of
                 inception or expiry are not k nown, for example
                 voyages, constructions and sporting events, the
                 specific events dictating the period must be
                 stated.

                 On Proportional treaty business where the
                 heading P eriod and Cancellation Provisions is
                 used cancellation provisions, if any, must be
                 stated including reference to what happens to
                 business in force at cancellation, if applicable,
                 and whet her there is any option for either part y
                 in this respect.

                 On Risk s Attaching During contracts it is
                 acceptable to state “any time zone”.

INTEREST:        Interest or subject matter insured or nature                         INTEREST:      (Non-marine generic example).
                 of liability.

**SUM INSURED:   Sum insured or reinsured or indemnity or                             SUM INSURED:   GBP XX, XXX, XXX
                 monetary limits.




                                                                      Page 20 of 44
                                      APPENDIX B - Example of compliant non-marine direct slip


                SLIP STRUCTURE                                                                          SLIP EXAMPLE

ORDER HEREON:   The heading Order hereon must detail the slip                       ORDER HEREON:   100% of 100%.
                closings i.e. whether the signed lines are
                percentages of t he whole or perc entages of the
                slips 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 H for guidance on
                correct completion.

SITUATION:      Situation, territorial limits or location.                          SITUATION:      123 Wickley Road
                                                                                                    London
                                                                                                    United Kingdom
                                                                                                    L20 1MP

CONDITIONS:     Identification, qualification or variation in                       CONDITIONS:     XXX wording as attached.
                coverage including the wording, clauses,                                            LSW 1175 Nuclear/Chemical/ Biological terrorism
                conditions and amendments to any clauses in                                         Exclusion clause
                basic form. The slip must reference or attach all                                   LSW 1145 Lloyd‟s alternative disputes clause
                registered wordings and registered clauses. All
                non-registered wordings and non –registered
                Claus es must be stated in full and attached in
                full.

NOTICES:        An optional heading where any notices other                         NOTICES:        Lloyd's Privacy Statement LSW1135B
                than Several Liability Notice must be recorded.
                E.g. Lloyd‟s privacy statement LSW 1135 B.

EXPRESS         Any express warranties that apply to the                            EXPRESS         (To be inserted if any).
WARRANTIES:     contract, over and above any that may be                            WARRANTIES:
                incorporated in the P olicy Form or implied
                warranties from legislation such as the Marine
                Insuranc e Act 1906, including the
                consequences of non-compliance. If there are
                no express warranties this heading would not
                be included.



                                                                    Page 21 of 44
                                      APPENDIX B - Example of compliant non-marine direct slip


                  SLIP STRUCTURE                                                                              SLIP EXAMPLE

CONDITIONS        Any conditions precedent that apply to the                           CONDITIONS        (To be inserted if any).
PRECEDENT:        contract, over and above any that may be                             PRECEDENT:
                  incorporated in the P olicy Form or legislation,
                  including the consequences of non-compliance.
                  If there are no conditions precedent this
                  heading would not be included.




SUBJECTIVITIES:   A slip can include subjectivities for example an                     SUBJECTIVITIES:    (To be inserted if any).
                  outstanding survey requi rement. Subjectivities
                  must be imposed within the slip in the Risk                                             .
                  Details section and must not be shown in the
                  Security Details section against Insurers‟ lines.
                  All subjectivities should set out the
                  condition/ action that needs to occur, by whom
                  and to what standard; the applicable timescale
                  within which the condition is to met; the terms
                  which are to apply until the condition is met; and
                  the consequences which are to follow if the
                  condition is not met.

                  If a subjectivity i s outstanding at inception
                  then it must be stated as a fully claused
                  condition of the coverage given in the slip
                  and relevant evidence of cover i ssued.




                                                                       Page 22 of 44
                                          APPENDIX B - Example of compliant non-marine direct slip


                     SLIP STRUCTURE                                                                                  SLIP EXAMPLE

SEVERAL              The several liability notice that applies. This                         SEVERAL              The subscribing insurers obligations under
LIABILITY:           must be either the insurance or reinsurance                             LIABILITY:           contracts of insurance to which they subscribe are
                     version of LSW1001, and must be included in                                                  several and not joint and are limited solely to the
                     full on all slips to ensure the (re)ins ured is fully                                        extent of their individual subscriptions. The
                     aware of the notice.                                                                         subscribing insurers are not res ponsible for the
                                                                                                                  subscription of any co –subscribing insurer who
                                                                                                                  for any reason does not satisfy all or parts of its
                                                                                                                  obligations.



CHOICE OF LAW &      The court that will have jurisdiction in the event                      CHOICE OF LAW &      This insurance shall be governed
JURISDICTION:        of a dispute bet ween insured and insurers and                          JURISDICTION:        by and construed in accordance wit h the law of
                     the law that will apply. Furt her Lloyd‟s                                                    England and Wales and each party
                     information on this heading is available in                                                  agrees to submit to the exclusive jurisdiction of
                     Lloyd‟s bulletin Y3406 and Y3327 and for LMA                                                 the Courts of England and Wales.
                     members letter LTM04-056-WFR.
**PREMIUM:           The premium to be paid by the insured.                                  PREMIUM:            GBP XX, XXX
                     Premiums in respect of War coverage must be
                     identified separately to premiums in respect of
                     other ins ured perils. Any premium instalment
                     information must be shown here and not under
                     the Payment Terms heading.

PAYMENT TERMS:       The Premium Payment Terms applied to the                                PAYMENT TERMS:      60 day premium payment condition – LSW3000.
                     contract by the Slip Leader, including Premium
                     Payment Clauses, Warranties and Conditions.
                     The Settlement Due Dat e must be shown under
                     the Settlement Due Date heading and not here.


It is a matter for Broker and insurer to agree whether it is                                  It is a matter for Broker and insurer to agree whether it is
     appropriate to show the total brokerage or to split                                           appropriate to show the total brokerage or to split
     brokerage under separate headings, e.g. retail and                                            brokerage under separate headings, e.g. retail and
          wholesale brokerage (as shown below)                                                          wholesale brokerage (as shown below)


                                                                             Page 23 of 44
                                      APPENDIX B - Example of compliant non-marine direct slip


                  SLIP STRUCTURE                                                                             SLIP EXAMPLE

FEE PAYABLE BY    The Brok er should specify whet her the client is                   FEE PAYABLE BY    No
CLIENT?           paying a fee to them. This should be a simple                       CLIENT?
                  “Yes” or “No” ans wer.

(TOTAL            The total brok erage allowance.                                     TOTAL             XX%
BROKERAGE)                                                                            BROKERAGE

                            OR                                                                                   OR

FEE PAYABLE BY    The Brok er should specify whet her the client is                   FEE PAYABLE BY    No
CLIENT?           paying a fee to them. This should be a simple                       CLIENT?
                  “Yes” or “No” ans wer.

(RETAIL           The amount of brok erage being earned by the                        RETAIL            Y%
BROKERAGE)        retail Brok er. This heading must only be used in                   BROKERAGE
                  conjunction with the „Wholesale Brok erage‟
                  heading.

(WHOLESALE        The amount of brok erage bring earned by the                        WHOLESALE         Z%
BROKERAGE)        wholesale Brok er. This heading must only be                        BROKERAGE
                  used in conjunction with the „Retail Brok erage‟
                  heading.

                           OR                                                                                    OR

 Retail and wholesale brokerage may be combined into                                   Retail and wholesale brokerage may be combined into one
  one heading and any subscription market brokerage                                   heading and any subscription market brokerage shown as a
               shown as a separate field                                                                     separate field
OTHER             Any additional deductions from premium e.g.                         OTHER             None.
DEDUCTIONS        administration fees, sundry payments, etc.                          DEDUCTIONS
FROM PREMIUM:                                                                         FROM PREMIUM:




                                                                      Page 24 of 44
                                     APPENDIX B - Example of compliant non-marine direct slip


                  SLIP STRUCTURE                                                                          SLIP EXAMPLE

**TAXES PAYABLE   Any premium taxes and charges payable by the                      TAXES PAYABLE   5% UK Insurance Premium Tax on Gross
BY INSURED AND    insured in addition to the premium stated                         BY INSURED AND Premium.
ADMINISTERED BY   above, which are collected and/or administered                    ADMINISTERED BY
UNDERWRITERS:     by Insurers e.g. UK Insurance P remium Tax.                       UNDERWRITERS:
                  Any premium taxes and charges payable by
                  Insurers must be shown in the Fiscal &
                  Regulatory section. If no taxes payable, state
                  none – do not leaving heading blank

RECORDING,        Details of procedures for storage of data,                        RECORDING,         Where the Broker maintains risk and claim
TRANSMITTING &    documents and other inf ormation in relation to                   TRANSMITTING &     data/information/documents the Broker may hold
STORING           Data Protection Act.                                              STORING            data/information/documents electronically.
INFORMATION:                                                                        INFORMATION:




                                                                    Page 25 of 44
                                APPENDIX B - Example of compliant non-marine direct slip


              SLIP STRUCTURE                                                                    SLIP EXAMPLE

SIGNING       Slips must contain a signing provision. Model                    SIGNING       In the event that the written lines hereon
PROVISIONS:   signing provisions are contained in Appendix G                   PROVISIONS:   exceed 100% of the order, any lines written
              to implement the signing principles already                                    “to stand” will be allocated in full and all other
              agreed for contract certainty.                                                 lines will be signed down in equal proportions
                                                                                             so that the aggregate signed lines are equal
                                                                                             to 100% of the order without further
                                                                                             agreement of any of the (re)insurers.

                                                                                             However:

                                                                                             a) in the event that the placement of the
                                                                                                order is not completed by the
                                                                                                commencement date of the period of
                                                                                                insurance then all lines written by that
                                                                                                date will be signed in full;
                                                                                             b) the signed lines resulting from the
                                                                                                application of the above provisions can be
                                                                                                varied, before or after the commencement
                                                                                                date of the period of insurance, by the
                                                                                                documented agreement of the (re)insured
                                                                                                and all (re)insurers whose lines are to be
                                                                                                varied. The variation to the contracts will
                                                                                                take effect only when all such (re)insurers
                                                                                                have agreed, with the resulting variation
                                                                                                in signed lines commencing from the date
                                                                                                set out in that agreement.




                                                               Page 26 of 44
                                     APPENDIX B - Example of compliant non-marine direct slip



                                                                  SUBSCRIPTION AGREEMENT



                 SLIP STRUCTURE                                                                   SLIP EXAMPLE

SLIP LEADER:     State who is the Slip Leader. If this is                        SLIP LEADER:     ABC Syndicate
                 k nown when the slip is produced it must be
                 added by the Brok er. If it is not k nown when
                 the slip is produc ed the Slip Leader ins erts
                 their company/ syndicat e name and number
                 here when they write their line. It is only
                 possible to have one Slip Leader for
                 London (Bureau) Mark et business; however
                 in situations where a non-bureau lead
                 exists on the same slip it is possible to
                 annotate the right hand side of the slip with
                 the headings OVERALL SLIP LEADER and
                 LONDON MARKET SLIP LEA DER. In such
                 cases subsequent provisions will need to
                 be specific in the Subscription Agreement
                 with regard to any leading underwriter
                 agreements or slip leader provisions.
                                                                                                   st
SETTLEMENT DUE   The date (day, month and year) by which                         SETTLEMENT DUE   1 September 2006
DATE:            the Insurers wish to receive their premium                      DATE:
                 or the due date of the 1st instalment if the
                 premium is on a def erred basis. Please
                 note that the date shown here is a term of
                 trade and not a polic y condition such as a
                 not a “Premium payment warranty” or a
                 “Premium payment condition”. These must
                 continue to be shown under the “P ayment
                 terms” heading in the Risk Details section.
                 The location of the SDD in this section of
                 the slip does not confer any change in legal
                 effect of the SDD or the implications of non-
                 compliance.

                                                                     Page 27 of 44
                                    APPENDIX B - Example of compliant non-marine direct slip


                 SLIP STRUCTURE                                                             SLIP EXAMPLE

BASIS OF         The basis on which subscribing (re)insurers               BASIS OF         Percentage of Whole
WRITTEN LINES:   written lines are applied to the order or                 WRITTEN LINES:
                 contract. There are three variations that
                 may be used. These are mutually exclusive.
                 No other option may be entered under this
                 heading. Furt her 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)

DEFERRED         Specify the number of days added to the                   DEFERRED         30 Days
PREMIUM PERIOD   client due dates of subsequent                            PREMIUM PERIOD
OF CREDIT:       instalments. Please note that this heading                OF CREDIT:
                 is only mandatory where premium is to be
                 paid via the bureau deferred scheme.

ADJUSTMENT       Specify the number of days after expiry                   ADJUSTMENT       (To be inserted if any)
PREMIUM PERIOD   Insurers expect the final adjustment of                   PREMIUM
OF CREDIT:       premium (if any) to be paid.                              PERIOD OF
                                                                           CREDIT:




                                                               Page 28 of 44
                                      APPENDIX B - Example of compliant non-marine direct slip


                   SLIP STRUCTURE                                                                 SLIP EXAMPLE

OTHER              State those Insurers, other than the Slip                  OTHER              GHI Company Ltd
AGREEMENT          Leader, who will agree contract changes                    AGREEMENT
PARTIES FOR        on behalf of the subscribing Insurers in                   PARTIES FOR
CONTRACT           accordance with the terms agreed below.                    CONTRACT
CHANGES, IF ANY:   This must not include those Insurers who                   CHANGES, IF ANY:
                   wish to agree contract changes on their
                   own behalf.

                   N.B. Care must be taken to avoid
                   conflict with leading underwriter
                   agreements. Thi s heading must
                   therefore only be used when the GUA i s
                   being utilised.

BASIS OF           Specify any leading underwriter agreement                  BASIS OF           GUA (October 2001) with
AGREEMENT          that applies, e.g. NMA, LUA MC, GUA and                    AGREEMENT           Non-Marine Schedule (October 2001).
TO CONTRACT        applicable class of business schedule(s)                   TO CONTRACT
CHANGES:           etc.                                                       CHANGES:
                    For classes of business where it is mark et
                    practice, or where specified in the GUA
                    schedule, to list a copy of agreed
                    endorsements to the following mark et, the
                    method/media should be specified here
                    e.g. email, link to repositories, etc.




                                                                  Page 29 of 44
                                  APPENDIX B - Example of compliant non-marine direct slip


              SLIP STRUCTURE                                                              SLIP EXAMPLE

DOCUMENT      The t ype(s) of evidence of cover to be                      DOCUMENT      E vidence of Cover to be provided by XY Z
PRODUCTION:   produced, who produces it, and any                           PRODUCTION:   Insuranc e Brokers Ltd in the form of a Brokers
              particular   requirements      e.g.    any                                 Insuranc e Document.
              requirement for an insurer approved polic y.
                                                                                         In addition an insurance policy authorised by
              The appropriate evidenc e of cover                                         the insurer will be issued.
              including det ails of security issued with 30
              days of inception. The appropriate                                         [please note further guidance will be issued on
              evidence of cover may be any one of the                                    this topic in due course]
              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 "Brok er company name" in the
                      form of a copy of this Placing Slip
                   Evidence of Cover to be provided
                      by "Brok er company name" in the
                      form of a Brok ers Insurance
                      Document
                   Evidence of Cover to be issued by
                      "Brok er company name" in the form
                      of a certificate (binding authority
                      declarations only)

CLAIMS        Identification of the claims agreement                       CLAIMS        Claims to be agreed by the Slip Leader and:
AGREEMENT     parties e.g. Slip Leader, plus the first IUA                 AGREEMENT           I. the first Lloyd's syndicate in the event
PARTIES:      company and Xchanging Claims Services.                       PARTIES:               that the Slip Leader is a IUA company
                                                                                              II. the first company in the event that the
                                                                                                  Slip Leader is a Lloy d'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 30 of 44
                                        APPENDIX B - Example of compliant non-marine direct slip


                  SLIP STRUCTURE                                                                    SLIP EXAMPLE

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

CLAIMS            All claims related information with the                         CLAIMS            Broker to enter claim advices into CLASS. All
ADMINISTRATION:   exception of identification of agreement                        ADMINISTRATION:   company market bureaux insurer(s ) to use
                  parties and the basis of claims agreement                                         CLASS for claims agreement.
                  must 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 delegat es the management of
EXTENT OF ANY     specified above have delegated their claims                     EXTENT OF ANY     all claims under GBP XX, XXX to Xchanging
OTHER             processing and agreement to any other                           OTHER             Claims Services.
DELEGATED         part y this must be specified here including                    DELEGATED
CLAIMS            any limits that may apply, e.g. all claims                      CLAIMS
                  less than GBP XXXX or experts fees GBP
AUTHORITY:                                                                        AUTHORITY:
                  XXXX.

                  It is unlik ely that the Brok er 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.

EXPERT(S) FEES    The party(ies) responsible for the collection                   EXPERT(S) FEES    Xchanging Insure Services to collect fees for all
COLLECTION:       of experts fees. There are six options                          COLLECTION:       slip security, including overseas.
                  available under the experts fees collection
                  arrangements. These options can be found
                  in Appendix D. N.B. this heading is optional
                  on reinsurance business.




                                                                      Page 31 of 44
                                    APPENDIX B - Example of compliant non-marine direct slip


                SLIP STRUCTURE                                                            SLIP EXAMPLE

BUREAUX         Any specific arrangements relating to the                 BUREAUX         Delinked accounts to be presented by Broker to
ARRANGEMENTS:   bureaux including administrative                          ARRANGEMENTS:   Xchanging Ins-sure Services.
                arrangements for premium settlement,
                delink ed accounting, and policy signing or
                basis of policy agreement clauses.

NON – BUREAUX   To be used as appropriate to record any                   NON – BUREAUX   (To be inserted if any).
ARRANGEMENTS:   specific provisions relating to insurers                  ARRANGEMENTS:
                outside of the bureau.




                                                              Page 32 of 44
                                               APPENDIX B - Example of compliant non-marine direct slip

                                                                              INFORMATION

                                                                                                                             st
Details of any information provided to Insurers to support the                         Loss History as advised to Broker at 1 June 2006:
assessment of the risk at the time of placement. Where the
information is appropriat e for inclusion in the slip it should be shown               Year         Loss Amount               Loss Event
here. Where the size or format of the information is not suitable for                  2001/02:     Nil                       None
inclusion it should be clearly referenced from this section and mus t                  2002/03:     Nil                       None
be made available to all Insurers during placing.                                      2003/04:     GBP 3,000                 Lightning
                                                                                       2004/05:     Nil                       None
                                                                                       2005/06:     GBP 8,000,000              Explosion in fuel pipe
                                                                                                           st
                                                                                       Presentation dat ed 1 June 2006 confirmed that sprinklers fully
                                                                                       operational.




                                                                           Page 33 of 44
                                         APPENDIX B - Example of compliant non-marine direct slip




                                                                  FISCAL AND REGULATORY


                    SLIP STRUCTURE                                                                     SLIP EXAMPLE

TAX PAYABLE BY         Any premium taxes and charges payable by Insurers           TAX PAYABLE BY          None.
UNDERW RITER(S ):      from the premium paid to them e.g. Australian               UNDERW RITER(S ):
                       Income Tax. Any premium taxes and charges
                       payable by the Insured in addition to the premium
                       which are collected and/ or administered by Insurers
                       should be shown in the Taxes Payable by (Re)
                       Insured and administered by Underwrit ers heading
                       of the Risk Details.

COUNTRY OF ORIGIN:     Where the demand for the insuranc e comes from.              COUNTRY OF ORIGIN:      United Kingdom
                       This equates to the country of origin of the (re)
                       insured.

OVERS EAS BROKER:      Details of the overseas intermediary must be                 OVERS EAS BROKER:       Direct Insured
                       completed here where one exists. Where more than
                       one exists this should show the next intermediary
                       Brok er in the placing chain. If no overseas agents are
                       involved then this heading should specif y “Direct
                       Insured”.

SURPLUS LINES          The name, surplus lines licence number and state of
BROKER:                the US intermediary which is responsible for
                       completing the Surplus lines filing, if any. The full
                       address may optionally be shown. Refer to Lloyd‟s
                       Bulletin Y3768.

STATE OF FILING:       The state in whic h the filings are made needs to be
                       specified. This is usually the state of domicile of the
                       insured. Must be present on all slips that have a US
                       Classification of US Surplus Lines.



                                                                         Page 34 of 44
                                        APPENDIX B - Example of compliant non-marine direct slip

                  SLIP STRUCTURE                                                                     SLIP EXAMPLE
LICENCE               The country, state or province to which a risk will be
INFORMATION:          reported against for regulat ory reporting under
                      Lloyd‟s licences. The count ry of risk is as defined by
                      the country for regulatory or fiscal reporting
                      purposes, as per definitions in the Lloyd‟s country
                      manuals.

US CLASSIFICATI ON:   To be entered if premium is in US Dollars,
                      irrespective of risk location. Only the following values
                      should be ent ered:
                            US Surplus Lines
                            US Reinsurance
                            Illinois licensed
                            Kentuck y licensed
                            US Virgin Isles licensed
                            Non Regulat ed
                            Various

NAI C CODES:          To be included only risk is US Reinsurance

ALLOCATION OF         The Lloyd‟s risk code(s) allocat ed by the first             ALLOCATION OF         GS
PREMIUM TO CODING:    participating Lloyd‟s insurer specifying how the             PREMIUM TO CODING:
                      premium is to be allocated and/or details of how the
                      Leading Company would lik e the premium to be split
                      for signing purposes.

ALLOCATION OF         This heading is only required for contracts written by       ALLOCATION OF
PREMIUM TO YEAR OF    Lloyd‟s syndicat es where the period exceeds 18              PREMIUM TO YEAR OF    (To be inserted if any).
ACCOUNT:              months.                                                      ACCOUNT:
FSA CLI ENT           To be included on all business. There are 6 possible         FSA CLI ENT           Commercial.
CLASSIFICATION:       options, please refer to the Appendix C of this              CLASSIFICATION:
                      document for further information.
IS BUSINESS SUBJECT   This heading must be included if the Client
TO DISTANCE           Classification heading specifies Retail or Retail
MARKETING             Exempt. If the Client Classification heading specifies
DIRECTIVE RULES?:     Commercial, Large Risk , Group Risk s or
                      Reins urance it must be omitted. Where it appears
                      the only applicable ans wers are Yes or No.


                                                                        Page 35 of 44
                         APPENDIX C- FSA Client Classification




 Classi fication                 FSA Cla ssification de scription
 Retail                          Dealing with a retail (privat e) 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 break down, 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, A viation, or
                                 Trans port (MA T), 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 ret ail 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).
 Reins urance                    Reins urance worldwide.

Please note if the FSA Client Classification heading is complet ed Retail or Retail Exempt the
heading Is Business subject to Distance Marketing Directive Rules? must be included and
answered either Yes or No.




                                       Page 36 of 44
                            APPENDIX D- 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 agreed as one of the market reforms. This scheme
allows affected parties to choose a collection process best suited to the particular circumstances of
the individual policy. The Market Reform Slip 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 option(s) must be agreed 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. A named service provider to collect London market share only.
2. A named service provider to collect all slip security, including overseas.
3. A named service provider to collect only overseas percentages.
4. Broker 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 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 relates to fee collection only in respect of just London or just overseas
markets (Options 1 & 3) and there are subscribing insurers from both markets then more than one
option must be specified.

Scope

The options for fee collection recorded in this document may be used with all London market slips.
If a Market Reform Slip is used then the slip heading will be available to record the necessary
information. If the slip is not produced to the above (market reform) structure then it is
recommended that a slip heading of Expert(s) Fees Collection be inserted to record this
information.

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 37 of 44
                                       APPENDIX E: Line conditions

The Contract Certainty Code of Practice requires insurers to phase out the practice of applying
stamp 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:
Stamp conditions should be phased out during the implementation of the Market Reform Slip June
2006.

               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%.




                                                  Page 38 of 44
                                           APPENDIX E: Line conditions

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

LINE                Intended Effect       Guidance
Condition
All terms           The insurer wants     Contracts written with a GUA
conditions,         to agree all
amendments,         endorsements,                 The Slip Leader will see all endorsements as a matter of course.
deletions,          changes to terms              Agreement Parties specified under the heading OTHER
special             and conditions                 AGREEEMENT PARTIES FOR CONTRACT CHANGES, IF AN Y will
acceptances         and special                    see all Part 2 and Part 3 endorsements.
and                 acceptances, etc              Followers wishing to agree all endorsements for their own proportion
endorsements                                       should insert “XYZ insurer to agree all terms conditions, amendments,
to be agreed                                       deletions and endorsements under the heading BASIS OF
                                                   AGREEMENT TO CONTR ACT CH ANGES”.

                                          Contracts without a GUA

                                          Insurers wishing to agree all endorsements for their own proportion should insert
                                          “XYZ insurer to agree all terms conditions, amendments, deletions and
                                          endorsements” under the heading BASIS OF AGREEMENT TO CONTRACT
                                          CHANGES.
Warranted           Condition in          This is a premium payment term and should be clearly expressed in the Risk
premium             relation to the       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.

Excluding Hull      Marine exclusion      This is a condition to the contract and must be stated under the Conditions
War                 condition of loss,    heading in the Risk Details section.
                    damage, liability
                    or expense
                    arising from war
                    to a ship hull.
Claims              A condition           The RULES AND EXTENT OF ANY OTHER DELEGATED CL AIMS AUTHORITY
Handling            providing for XCS     heading in the Subscription Agreement section provides for this claims handling
Authority           to agree claims       arrangement.
delegated to        on behalf of the
XCS                 slip leader.
Each Insurer to     A condition           The several liability notice LSW1001 must be stated under the SEVERAL
the extent of       ensuring that         LIABILITY heading in the Risk Details section to ensure that the insured is fully
several liability   each Insurer is       aware of the notice.
                    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. Onl y the
                    claims.               first participating Lloyd‟s insurer (and optionally the second in respect of special
                                          category claims) may agree claims.




                                                      Page 39 of 44
                                           APPENDIX E: Line conditions

LINE              Intended Effect        Guidance
Condition
Notice of         A pro vision           N.B. Not permitted for use by Lloyd’s managing agents.
cancellation at   commonly found
anniversary       in contracts of        If non-Lloyd‟s insurers wish to apply this provision then they must:
date              insurance for                   ensure the contract is continuous
                  more than a year,               not use abbreviations, e.g. NCAD, and ensure that the necessary
                  and permits the                  elements are contained in a clearly worded condition
                  insurer to serve                be satisfied that the provision has legal effect under the law s pecified
                  notice of                        under LAW & JURISDICTION heading
                  cancellation at                 record this under the CONDITIONS heading
                  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.
(and/or for incurred but not            provide Letters of Credit and
reported losses)                        Outstanding Claims
                                        Ad vances.




                                                       Page 40 of 44
                       APPENDIX F- Unique Market Reference Guidance

The UMR must be stated in the Risk Detail 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 41 of 44
                      APPENDIX G - Model Signing Provisions Guidance


1.1    Background

1.1.1 The Signed Lines Guidance issued in December 2005 established the following signing
principles:
         Wherever possible, the [signing down] calculation method should be explicit on the
            submission, subject to client wishes, allowing the insurer to determine how their line will
            be calculated.
         The Broker should obtain client instructions regarding signed lines prior to inception,
            wherever possible.
         Any post-inception change(s) in signing must be agreed by all parties whose lines are
            to be varied.

1.1.2 Model Signing Provisions can assist with the implementation of these principles and help to
provide certainty of signed lines at inception. This is important for clients, to confirm their security
and for (re)insurers, to confirm their participation and commitment of capital. It also clearly
establishes the proportion to be borne by each (re)insurer in the event of a loss.

1.1.3 The signing provisions contained in this guidance enable the signed lines for each contract
to be clearly determined at the conclusion of placement. Any subsequent variation of these signed
lines then requires the documented agreement of the (re)insured and all (re)insurers whose lines
are to be varied.

1.1.4 It is recommended that every contract should contain a clause which sets out the signing
provisions, to assist with certainty in this area. The Model Signing Provisions below have been
reviewed by leading counsel.

1.1.5 There are two versions of the Model Signing Provisions; one without a disproportionate
signing clause, and one that allows disproportionate signing before inception at the election of the
(re)insured. The Broker can select the appropriate version to use on the slip, taking account of the
(re)insured‟s requirements. The model clauses are not mandatory and (re)insureds, Brokers and
(re)insurers may make additions, deletions or amendments.

1.2    (Re)insurer signing instructions

1.2.1 The Market Reform Group (MRG), supported by the opinion of leading counsel,
recommends that the use of all insurer signing instructions other than “line to stand” should be
discontinued. For example, the use of (re)insurer signing instructions such as X% to sign Y%”
should be discontinued, as their meaning may be unclear and compromise contract certainty.

1.2.2 If the lines written by (re)insurers “to stand” should exceed 100% of the order, then opinion
obtained from leading counsel suggests that the agreement of (re)insurers would be required to
vary these lines. In the event of a disproportionate signing, priority should be given to any intended
variation of lines written “to stand”.




                                           Page 42 of 44
                      APPENDIX G - Model Signing Provisions Guidance

2.     Model Signing Provisions

2.1    Without Disproportionate Signing

SIGNING PROVISIONS

In the event that the written lines hereon exceed 100% of the order, any lines written “to stand” wil l
be allocated in full and all other lines will be signed down in equal proportions so that the
aggregate signed lines are equal to 100% of the order without further agreement of any of the
(re)insurers.

However:

a)      in the event that the placement of the order is not completed by the commencement date of
the period of insurance then all lines written by that date will be signed in full;

b)      the signed lines resulting from the application of the above provisions can be varied, before
or after the commencement date of the period of insurance, by the documented agreement of the
(re)insured and all (re)insurers whose lines are to be varied. The variation to the contracts will
take effect only when all such (re)insurers have agreed, with the resulting variation in signed lines
commencing from the date set out in that agreement.

2.2    With Disproportionate Signing

SIGNING PROVISIONS

In the event that the written lines hereon exceed 100% of the order, any lines written “to stand” will
be allocated in full and all other lines will be signed down in equal proportions so that the
aggregate signed lines are equal to 100% of the order without further agreement of any of the
(re)insurers.

However:

a)      in the event that the placement of the order is not completed by the commencement date of
the period of insurance then all lines written by that date will be signed in full;

b)      the (re)insured may elect for the disproportionate signing of (re)insurers‟ lines, without
further specific agreement of (re)insurers, providing that any such variation is made prior to the
commencement date of the period of insurance, and that lines written “to stand” may not be varied
without the documented agreement of those (re)insurers;

c)      the signed lines resulting from the application of the above provisions can be varied, before
or after the commencement date of the period of insurance, by the documented agreement of the
(re)insured and all (re)insurers whose lines are to be varied. The variation to the contracts will
take effect only when all such (re)insurers have agreed, with the resulting variation in signed lines
commencing from the date set out in that agreement.




                                           Page 43 of 44
                                                APPENDIX H - Model Signing Provisions Guidance

This appendix explains how orders must be expressed in the Market Reform Slip. Part of Order should not be used.

CIRCUMSTANCES                   OLD PANEL ONE NOTATION                                          MARKET REFORM SLIP NOTATION
E XAMPLE A –
PERCE NTAGE OF WHOLE                             %           Order     Order     Closed for     ORDER HEREON: 100% of 100%
                                Written Lines    Part   Of   Whole     100%      100%           BASIS OF WRITTE N LINES: Perc entage of Whole
Client A gives the Broker a
100% order and they are the
only Broker involved in the
placement.
E XAMPLE B –                                                                                    ORDER HEREON: 50% of 100%
PERCE NTAGE OF ORDE R                                                                           BASIS OF WRITTE N LINES: Perc entage 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.
E XAMPLE C – PA RT OF                                                                           ORDER HEREON: 50% of GPB200
WHOLE                                                                                           BASIS OF WRITTE N 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 GPB 100                                                          GBP 200
where the total sum insured
was GPB200. Lines are
written as a monetary amount
as part of the total sum
insured. Signed lines are
shown as part of the sum
insured.




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