2006 Objectives & the LMP Slip Past, Present and Future

1. 2006 Objectives& the LMP Slip Past, Present and Future Market Forum, 26 January 2006 James Willison, Andy Brookes

2. MRG Objectives 2006 +

3. MRG Objectives 2006 +

4. The LMP Slip Past, Present and Future James Willison

5. Past: Objectives of the LMP Slip • To aid clarity at contract formation by: • Adopting a standard structure • Clearly stating the contract terms • Avoiding the use of “TBA” or “As amended” • Greater use of standard wordings • Non-standard wordings to be included in full • Simplify post placing contract management by: • Explicitly defining contract roles and responsibilities • Identification of service providers • Stating agreement parties for contract amendments • Clearly defining claims handling responsibilities

6. Past: LMP Format • Panel 1 – No small print. Must contain the Unique Market Reference • Panel 2 – amended to achieve clarity by separation of information into 4 sections: • Risk Details (Headings vary by class of business) • Subscription Agreement (Content fixed) • Information (As required) • Fiscal and Regulatory (Content fixed) • Panel 3 – remains unaltered (security detail)

7. Past: April 2005 LMP Slip • BRAT removed • Exemptions updated • Structure: ISO codes, stamp conditions, slip provisions • Headings: Expert fees, Delegated authority, Non-bureaux arrangements • Fiscal and Regulatory section updated: new headings and allow additional headings

8. Past: Recognised Exemptions to LMP • All slips incepting from 1st October 2005 must be LMP Slips. The only recognised Exemptions at this time are: • Motor & Term Life processed outside XIS. • Client Exempt All other slips will be processed as LMP Slips

9. Present: Ensuring LMP slip Quality • LMP audit team tasked with improving quality • Sample audit of slips placed • Regular market feedback and reports • Monthly league tables published • Regular meetings with Brokers and Underwriters • IUA companies joined audit process

10. Present: Contract certainty attributes of LMP slip

11. Future: • Meeting March 2006 LMP target • Updated LMP slip • Slip Audit • ACORD – Global Placing Document

12. 100% 90% 80% 70% 64% Fully Compliant Slips 60% 60% 55% Cumulative increment in the 50% 47% % of fully compliant slips as each hotspot is resolved 40% Weeks 45-48 If Basis of Claims and If Taxes and If Claims Agreement is payable by the agreement parties clearly identified underwriter is are clearly clearly stated identified Future: meeting March 2006 LMP target

13. Future: Slip Audit • Will continue post March • Aligned to market agreed contract certainty checklist • Will check pre-bind contract certainty aspects of QA tool • Will continue at leader scratch stage • More formalised sampling process – 25%?

14. Future: Updated LMP slip • Align LMP Slip with Contract Certainty Code of Practice • Default wordings agreement • Document Production • Subjectivities • Line/Stamp conditions • Signing Provisions • Incorporate “LMP Policy Guidelines” • Review Update panel 1 • Due for publication April 2006

15. Future: ACORD – Global Placing Document • Work took form of: • COB Practitioner groups • Agreeing universe of headings on slips (including AKAs) and their definitions with international ACORD members • Mapping to RLC placing message • GPD published on ACORD website • Includes COB example slips • Run in parallel with LMP slip during 2006 • Proposed to replace LMP slip 2007

16. 2006 Objectives& the LMP Slip Past, Present and Future Market Forum, 26 January 2006 James Willison, Andy Brookes