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Market Reform Forum. Update on business reform 11 November. Andy Brookes Lloyd’s BPR. Objective: up to speed in half hour……. (Briefly) principles and approach Accounting and Settlement Electronic Claims Files Contract Certainty and Documentation Benchmarking Kinnect LMP slips.

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Market reform forum

Market Reform Forum

Update on business reform

11 November

Andy Brookes

Lloyd’s BPR

Objective up to speed in half hour
Objective: up to speed in half hour……

  • (Briefly) principles and approach

  • Accounting and Settlement

  • Electronic Claims Files

  • Contract Certainty and Documentation

  • Benchmarking

  • Kinnect

  • LMP slips

Principles underpinning reform
Principles underpinning reform

  • Reduce ‘Londonisms’: international firms must buy-in – governance role

  • Change requires authority and a degree of neutrality: individual firms cannot do it alone; Lloyd’s and the Associations will lead

  • Commitment to co-operate essential, on design and implementation

  • Network effects: a convoy for implementation

  • Cost / benefit case is rarely convincing on its own. FSA – the ‘smouldering’ platform. Transparency – the (now) burning platform

  • Minimum requirements; don’t ‘over satisfy’

Overall approach to market reform
Overall approach to market reform

  • Drive standards for data and harmonisation of process

    • LMP slip; A&S; claims management; ACORD work; contract certainty initiatives

  • Build supporting electronic infrastructure, throughout the life cycle of a contract

    • A&S; electronic infrastructure for claims (CLASS, ECF); Kinnect

      Result: transparency in processes and performance. Then market firms and trading partners can

      measure and manage

    • LMP slips, policy production, A&S take-up, claims processing

Accounting and settlement
Accounting and Settlement

  • LMA & IUA funding sign-up ongoing

    • Brokers contribution ‘agreed’

  • Detailed business design progressing

    • September interim; has changed little

    • Premium processes complete; claims nearly finished; outward reinsurance well advanced

    • End November publication

  • Plus interim detailed data deliverable

  • Subsequent deliverables

  • Swift sign-off from Market Associations – please

  • First governance meetings held – MRIB, A&S Project board

  • MRIB and Project Board working on implementation timetable

  • Electronic claims file
    Electronic Claims File

    • New XIS Contract 90% Managing Agents by value signed

      • XIS started repository enhancements work 1st Oct

      • Contract schedule for CLASS for Lloyd’s out soon to managing agents

      • XIS started enhancements on CLASS for Lloyd’s 1st Nov

    • Governance

      • Claims project board set up

      • Market associations – LMA, LMBC, IUA - groups in place

    • Working on the implementation timetable

      • Which firms for which lines of business?

    Contract certainty and documentation
    Contract Certainty and Documentation

    • 4 Process options identified by the CCSG

      • XIS involved earlier/quicker is the focus

  • Potential initial implementation areas identified by LMBC documentation overview committee (DOC) and CCSG – 300 risks starting Q1 2005

  • Performance monitoring group has made initial proposals regarding measurement

  • Lloyd’s and XIS codifying the checks; rationalise; publish performance data. Binders first

  • Measuring reform

    • Purpose of measurement

      • Trustworthy data (vs. “I’ve heard it takes…..”)

      • To drive process improvements

      • Provoke firms to improve performance – measurable targets where possible

      • Measure impact of reform agenda

    • Dimensions

      • Timing; Quality; Cost; Satisfaction – customer service survey

    • Sequence of delivery

      • LMP Slips – more of the same

      • Document production; XIS policy checking; start with binders

      • Use of A&S and Claims electronic infrastructure

    • Overseen by the London Market Standards Committee


    • November 1 release

      • Went well – enhanced placement process: harmonised business process; rough edges smoothed; market acceptable

  • Hiscox signed-up; live in early December

  • Working on endorsements

    • Finalising business requirements:Q2 delivery aim

  • User adoption is key: Kinnect as core process

    • Step by step through H1

    • Eg Create (LMP) slips on Kinnect

  • Additional risk classes H2 2005: terrorism; international property

  • Slips

    • LMP Open market slips

      • Sept Market Report and league tables published

        • October data out shortly

      • Live slips checked once lead placed line - 86% current BSA

      • Target 95% by the end of the year

    • LMP Binding Authorities

      • Model agreements published (inc. Marine)

      • LMP slip templates published

      • Slips led after 28th Oct on risks incepting on and after 1st Jan 05 must be LMP

    Slip - 2005 tasks

    • LMP Slip checking

    • Binders

    • Lineslips

    • ACORD

    • Electronic slip standard

    Business process reform

    Business Process Reform

    The LMP Slip

    James Willison LMP Office


    • Status

    • Objectives

    • Mandate / Exemptions / Enforcing

    • Key areas to ensure compliance

    • Binders

    • LMP slip 2005

    LMP Slip Status

    • LMP Slip standard mandated

    • Audit team on board

    • Market Reports published monthly

    • League tables published

    • Current BSA is 86% (target 95% by year end)

    • Binding Authorities now available

    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

    What has been mandated?

    • 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)

  • Recognised Exemptions

    All slips incepting from 1st January 2005 must be LMP Slips. The only recognised Exemptions at this time will be:

    • Lineslips

    • Motor & Term Life processed outside XIS

    • Slips where the Insured or a non-Lloyd’s insurance intermediary requires use of a non-LMP slip

    All other slips will be processed as LMP Slips

    Enforcing the mandate
    Enforcing the mandate

    • Lloyd’s audit team tasked with improving quality

      • 25% slips placed checked

      • Regular market feedback and reports

      • Monthly league tables published

      • Regular meetings with Brokers and Underwriters

    • Ongoing Quality checks continued to be conducted by the LMP Programme Office and Market Associations

    • Sanctions – naming and shaming

    LMP Slips – key areas

    • UMR

    • Period

    • Law and jurisdiction

    • Payment terms

    • Document production

    • Claims

    • Taxes payable by underwriter

    Use of the lmp slip for b a
    Use of the LMP Slip for B.A.

    • Model agreements published

    • LMP slip templates published for use with Model agreements

    • Slips led after 28th Oct on risks incepting on and after 1st Jan 05 must be LMP

    • The Schedule forms part of the Slip

    • For LMA model B.A. the wordings are included by reference

    • Schedule as placed is sent to the Coverholder to sign

    Binding Authority Wording

    PANEL 1

    PANEL 2

    PANEL 3






    LMP Slip - 2005 tasks

    • LMP Slip checking

    • Binders

    • Lineslips

    • ACORD

    • Electronic slip standard

    Lmp slips questions
    LMP Slips - Questions