The LMP Slip. April Page 1 of 26

Transcription

1 The LMP Slip April 2005 Page 1 of 26

2 Table of Contents 1. Introduction The Franchise Board Mandate Enforcing & monitoring the mandate Variation to the LMP Slip Structure of the LMP Slip Risk Details Section All Slips Risk Details Section Type of business specific Subscription Agreement / Information / Fiscal & Regulatory Sections All Slips 7 6 Further Information... 7 Appendix A: Slip Headings Defined.8 Appendix B: An Example Compliant Non-Marine Direct Slip. 15 Appendix C: FSA Client Classification definitions.25 Appendix D: Expert Fees Collection 26 Page 2 of 26

3 The LMP Slip 1. Introduction The LMP slip was introduced in October 2001 and was mandated by the Lloyd s Franchise Board for business incepting from the 2 nd January This version (April 2005) of the LMP slip replaces the LMP BRAT slip (November 2003). The document has been updated to reflect changes in the exemptions to the mandate, recent regulatory changes and includes further feedback from the market. This document sets out details of the LMP 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 and is supported by Lloyd s, LMA, IUA and the LMBC. 2. 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, the authority to enforce compliance being exclusively vested in the Franchise Board (a) as from 28 October 2004, a managing agent shall not permit the syndicate stamp of a syndicate managed by it to be affixed to any slip which relates to a contract or contracts of insurance unless (i) (ii) (iii) the slip is in the format of an LMP slip from time to time issued by the LMP Programme Office and the information contained in the slip has been properly completed in accordance with the relevant LMP slip standards; the slip is marked LMP Exempt Client Requirement ; or 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 28 October 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 binding authority 1 in respect of the 2005 or later year of account unless the slip has been completed in accordance with the relevant LMP slip guidelines from time to time issued by the LMP Programme Office. Line Slips must be marked LMP Exempt Line Slip. Work is currently being undertaken to determine how the London Market Principles can be applied to line slips with the aim of publishing LMP guidelines for line slips in due course. 3. Enforcing & monitoring the mandate The LMP Programme Office, 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 being held between the Lloyd s slip audit team and managing agents and brokers. Reports specific to the managing agent or broker are 1 Separate guidelines exist for Binding Authority slip completion, please see Page 3 of 26

4 The LMP Slip 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 On-site slip checking at the respective managing agents is also being carried out by the audit team to provide quality feedback and on-site training sessions. In order to communicate progress to the market, Lloyd s publish monthly reports on LMP slip quality based on the checks conducted by the Lloyd s slip audit team. Around 20 of the larger firms receive monthly league tables, so that these firms can assess how well they are doing in relation to other large managing agents or brokers. 4. Variation to the LMP Slip The following are valid variations to the LMP slip as incorporated into this document: 4.1 The order of slip headings in the RISK DETAILS section is not fixed although it is likely that future standardisation will seek to do so. 4.2 Some slips will be based on policy forms that may vary from the standard LMP headings. As an example the policy could include a heading called Name of Client rather than Insured. In these instances it is desirable that the term used in the policy form is also used in the slip. To aid contract clarity the slip and policy should use consistent terms. 4.3 There will be contract specific slip headings that will need to be incorporated into the LMP slip to allow for any unusual or additional RISK DETAILS as deemed necessary. 5. Structure of the LMP Slip All LMP Slips are required to apply the following rules: A UMR (Unique Market Reference) 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. (vi) 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 4 of 26

5 The LMP Slip Four separate sections called Risk Details, Subscription Agreement, Information and Fiscal and Regulatory. The inclusion of the Risk Details heading in the slip is optional but the other three must be included. Minimum standard headings in the Risk Details section as per section 5.1. Standard headings for the Subscription Agreement, Fiscal and Regulatory and Information sections. The Subscription Agreement section headings must not be changed, deleted, reordered or added to in any way. Furthermore the Subscription Agreement section must not include any additional headings. All monetary amounts shown as three letter ISO Currency codes rather than symbols e.g. USD rather than $. However where policy forms include such symbols the slip must reflect the policy. A LMP slip must not include any terms which are unspecific or create ambiguities, for example Broker small print and any TBA s (To Be Agreed / Advised) that do not indicate the appropriate action to be taken by whom and by a specific date. Any stamp conditions applied by underwriters must not use acronyms or abbreviations but rather state the condition in full, for example SNKORL should be stated Subject to No Known or Reported Losses at.. Underwriters who incorporate stamp conditions as standard must ensure they are relevant to each risk they write. If the condition is not relevant it must be removed. For example stamp conditions relating to Letters of Credit must be removed if the contract in question does not incorporate any Letters of Credit, likewise Notice of Cancellation at Anniversary Date stamp conditions must only be applied to contracts with a period greater than 18 months. Standard slip provisions must be relevant to the risk or the administration of that risk. Underwriters must not delete the Subscription Agreement section of the slip or write stamp conditions that specify No Subscription Agreement or Ex Subscription Agreement or similar. If there are particular provisions underwriters do not wish to apply to them, these can be explicitly stated against the relevant Subscription Agreement heading or specified as stamp conditions. A detailed breakdown of the mandatory headings required in each section of the slip can be found in Appendix A. Page 5 of 26

6 The LMP Slip 5.1 Risk Details Section All Slips ** indicates a heading where the slip heading used may differ due to the policy form used MANDATORY HEADINGS FOR ALL SLIPS 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 (Conditions 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) Several Liability Choice of Law & Jurisdiction Premium or Rate ** Payment Terms Brokerage Or equivalent details Other Deductions from Premium Taxes payable by (Re) Insured and administered ** by Underwriters (Recording, Transmitting & Storing Information Where applicable Can be omitted if none exist) 5.2 Risk Details Section Type of business specific NON-MANDATORY HEADINGS BY TYPE OF BUSINESS (Other headings can be included if required) Direct & Facultative R/I (Non-Marine) Direct & Facultative R/I (Marine) Excess of Loss Treaty (Non-Marine / Aviation) Form Form Class of Business (& any Exclusions) Interest Vessels or Conveyance Territorial Scope Situation Interest Reinstatement Provisions Trading Wording Co-Reinsurance Warranty Loss Reserve & Interest NON-MANDATORY HEADINGS BY TYPE OF BUSINESS (Other headings can be included if required) Excess of Loss Treaty Proportional Treaty Proportional Treaty (Marine) (Marine) (Non-Marine / Aviation) Interest (& any Exclusions) Class of Business (& any Exclusions) Interest (& any Exclusions) Reinstatement Provisions Territorial Scope Wording Wording Commission or Overriding Commission Premium Reserve & Interest Profit Commission Loss Reserves & Interest Premium Reserve & Interest Cash Loss Limit Loss Reserve & Interest Portfolio Bordereaux Accounts Page 6 of 26

7 The LMP Slip 5.3 Subscription Agreement / Information / Fiscal & Regulatory Sections All Slips MANDATORY HEADINGS FOR ALL SLIPS SUBSCRIPTION AGREEMENT Slip Leader (Other Agreement Parties for Contract Must only be present if the GUA is used ) Changes, if any Basis of Agreement to Contract Changes Document Production Claims Agreement Parties Basis of Claims Agreement Claims Administration Rules and Extent of any other Delegated Claims Authority (Expert(s) Fees Collection Optional on Reinsurance risks if none exist) Bureaux Arrangements (Non-Bureaux Arrangements (Signing Provisions Information Where applicable) Where applicable) INFORMATION FISCAL AND REGULATORY (Other Fiscal and Regulatory headings can be included if required) Tax Payable by Underwriter(s) (US Classification To be entered as appropriate i.e. if Risk is in US (NAIC Codes Allocation of Premium to Coding FSA Client Classification (Is business subject to distance marketing directive? Dollars) To be included when applicable i.e. if Risk is US Reinsurance.) To be specified if FSA Client Classification is specified as Retail or Retail Exempt ) 6 Further Information For further information on the LMP Slip or any of the other LMP reforms please contact: Type of Query Contact Address General Queries James Willison LMP Programme Office Tel: Fax: james.willison@lmpoffice.com LONDON Brokers Lloyd s Underwriters IUA Underwriters Mark Barwick - LMBC Tel: Fax: mark.barwick@lmbc.co.uk John Bentley - LMA Tel: Fax: john.bentley@lloyds.com Mark Baker - IUA Tel: Fax: Mark.Baker@IUA.co.uk Room 427 Lloyd s 1 Lime Street BIBA House 14 Bevis Marks LONDON Suite 1085 Lloyd s 1 Lime Street LONDON Suite 7 LUC 3 Minster Court LONDON Page 7 of 26

8 Risk Details Section All Classes Appendix A Slip Headings Defined The following headings must be present for all LMP 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. HEADING DEFINITION NOTES TYPE The nature of the risk. INSURED OR REINSURED The (Re)Insured s name, and where appropriate their address and/or business. PERIOD OR PERIOD AND CANCELLATION PROVISIONS OR VOYAGE For the majority of risks the period must include the inception date and time of day, expiry date and time of day as well as the applicable time zone. As an alternative to specifying the time of day it is acceptable to specify both days 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 risks where specific dates of inception or expiry are not known, for example voyages, constructions and sporting events, the specific events dictating the period must be stated. 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. Or alternative heading as per policy form. Or alternative heading as per policy form. SUM INSURED OR LIMITS OR LIMITS AND RETENTIONS/DEDUCTIBLES OR TREATY DETAIL OR TREATY LIMITS (CONDITIONS) (EXPRESS WARRANTIES) On Risks Attaching During contracts it is acceptable to state any time zone. Sum insured or reinsured or indemnity or monetary limits. Identification, qualification or variation in perils including the wording, clauses, conditions and amendments to any clauses in basic form. All standard wordings and clauses must be clearly identified by name and reference. Any non-standard wording or clauses must be referred to here and attached to the slip. 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. Or alternative heading as per policy form. Or alternative heading as per policy form. Page 8 of 26

9 (CONDITIONS PRECEDENT) SEVERAL LIABILITY CHOICE OF LAW & JURISDICTION Appendix A Slip Headings Defined 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. The several liability notice that applies. This must be either the insurance or reinsurance version of LSW1001, and should be included in full on all slips to ensure the (Re) Insured is fully aware of the notice. The court that will have jurisdiction in the event of a dispute between insured and insurers and the law that will apply, for further detailed information on this heading please see Lloyd s bulletin Y3406. PREMIUM OR RATE The premium to be paid by the Insured. Or alternative heading as per policy form. PAYMENT TERMS BROKERAGE OTHER DEDUCTIONS FROM PREMIUM TAXES PAYABLE BY (RE) INSURED AND ADMINISTERED BY UNDERWRITERS (RECORDING, TRANSMITTING & STORING INFORMATION) The Premium Payment Terms applied to the contract by the Slip Leader, including Premium Payment Clauses, Warranties and Conditions. The Settlement Due Date must be shown in Panel One of the slip and not here. The brokerage allowance or equivalent details. If this is paid as a fee rather than a percentage of the premium this is a private arrangement between broker and client and the brokerage must be specified as zero or not applicable in the slip. Any additional deductions from premium e.g. administration fees, sundry payments, etc. Any premium taxes and charges payable by the (re)insured in addition to the premium stated above, which are collected and/or administered by underwriters e.g. UK Insurance Premium Tax. Any premium taxes and charges payable by underwriters must be shown in the Fiscal & Regulatory section. Details of procedures for storage of data, documents and other information. Additional Risk Details Headings - Direct & Facultative R/I (Non-Marine) Or alternative heading as per policy form. HEADING FORM INTEREST SITUATION DEFINITION 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. Interest or subject matter insured or nature of liability. Situation, territorial limits or location. Page 9 of 26

10 Appendix A Slip Headings Defined Additional Risk Details Headings - Direct & Facultative R/I (Marine) HEADING FORM VESSELS or CONVEYANCE INTEREST TRADING DEFINITION 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. Name of vessel/conveyance. Interest or subject matter insured or nature of liability. Territorial or trading limits or trading warranties. Page 10 of 26

11 Appendix A Slip Headings Defined Additional Risk Details Headings - Excess of Loss Treaty (Non-Marine / Aviation) HEADING CLASS OF BUSINESS (& ANY EXCLUSIONS) TERRITORIAL SCOPE REINSTATEMENT PROVISIONS WORDING CO-REINSURANCE WARRANTY LOSS RESERVE & INTEREST DEFINITION The Classes of business covered by the treaty followed by any specific exclusions. The Territorial Scope. Provisions for any Reinstatement, including Limit and Additional Premium applicable. The agreed wording or basis of wording, if not already stipulated under conditions above must be attached to slip if non-standard. Any Co-Reinsurance warranty. Any loss reserve and applicable interest thereon. Additional Risk Details Headings - Excess of Loss Treaty (Marine) HEADING INTEREST (& ANY EXCLUSIONS) REINSTATEMENT PROVISIONS WORDING DEFINITION The interest and any exclusions. The nature of the account must appear first followed by specific exclusions, so that it is immediately apparent which is which. Provisions for any reinstatement including limit and additional premium applicable. The agreed wording or basis of wording if not already stipulated under conditions above. Must be attached to slip if non standard. Page 11 of 26

12 Appendix A Slip Headings Defined Additional Risk Details Headings - Proportional Treaty (Non-Marine / Aviation) HEADING DEFINITION CLASS OF BUSINESS (& ANY Classes of Business must appear first followed by the exclusions separated by a space, so that it is immediately EXCLUSIONS) apparent which is which. TERRITORIAL SCOPE The territorial scope. COMMISSION or OVERRIDING The percentage amount of commission needs to be inserted but where it is other than this a clear indication is required. COMMISSION PROFIT COMMISSION The percentage 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. PREMIUM RESERVE & INTEREST If the interest is not a per annum basis this must be stated. LOSS RESERVE & INTEREST 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 portfolios to be assumed or returned must be entered 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 is it to be treated as cash or reserve. CASH LOSS LIMIT Insert amount. ACCOUNTS Indicate the periods at which accounts are to be rendered and also any provisions for bordereaux or other documents which may be necessary to show on a slip. WORDING The agreed wording or basis of wording, if not already stipulated under conditions above must be attached to slip if non-standard. Additional Risk Details Headings - Proportional Treaty (Marine) HEADING INTEREST (& ANY EXCLUSIONS) WORDING PREMIUM RESERVE & INTEREST LOSS RESERVES & INTEREST CASH LOSS LIMIT BORDEREAUX ACCOUNTS COMMISSION or OVERRIDING COMMISSION DEFINITION The interest insured and the exclusions must be shown but the nature of the account must appear first followed by the exclusions, separated by a space, so that it is immediately apparent which is which. The agreed wording or basis of wording, if not already stipulated under conditions above must be attached to slip if non-standard. If the interest is not a per annum basis this must be stated. If interest is not on a per annum basis this must be stated. The amount and proportion of the treaty to which it is applicable. Indicate the intervals at which provisional or definite bordereaux are to be rendered. Indicate the period at which accounts to be rendered. The percentage amount of commission needs to be inserted but where it is other than this a clear indication is required. Page 12 of 26

13 Appendix A Slip Headings Defined PROFIT COMMISSION The percentage 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 SLIP LEADER: (OTHER AGREEMENT PARTIES FOR CONTRACT CHANGES, IF ANY:) BASIS OF AGREEMENT TO CONTRACT CHANGES: DOCUMENT PRODUCTION: CLAIMS AGREEMENT PARTIES: BASIS OF CLAIMS AGREEMENT: CLAIMS ADMINISTRATION: RULES AND EXTENT OF ANY OTHER DELEGATED CLAIMS AUTHORITY: DEFINITION 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 name here when they write their line. It is only possible to have one Slip Leader for London (Bureau) Market business; however in situations where a non-bureau lead exists on the same slip it is possible to annotate the right hand side of the slip with the headings OVERALL SLIP LEADER and LONDON MARKET SLIP LEADER. In such cases subsequent provisions will need to be specific with regard to any Slip Leader agreements. State those underwriters, other than the Slip Leader, who will agree contract changes on behalf of the subscribing underwriters in accordance with the terms agreed below. This must not include those underwriters who wish to agree contract changes on their own behalf. N.B. Care must be taken to avoid conflict with leading underwriter agreements. This heading must therefore only be used when the GUA is being utilised. Specify any leading underwriter agreement that applies, e.g. NMA, LUAMC, GUA and applicable class of business schedule(s) etc. For classes of business where it is market practice, or where specified in the GUA schedule, to list a copy of agreed endorsements to the following market, the method/media should be specified here e.g. , link to repositories, etc. The type of insuring documentation to be produced, who produces it, who agrees it and any particular requirements e.g. specific language. Where a slip policy is used the words Broker to produce slip policy for XIS approval must be incorporated. Identification of the claims agreement parties e.g. Slip Leader, plus the first IUA company and Xchanging Claims Services. Specify the basis of the claims procedure(s) such as the Lloyd s 1999 claims scheme 2 ; IUA claims agreement practices or any other risk specific arrangements such as the Lloyd s Marine Proportional Treaty Scheme. All claims related information with the exception of identification of agreement parties and the basis of claims agreement must be included here. If any of the claims agreement parties specified above have delegated their claims processing and agreement to any other party this must be specified here including any limits that may apply, e.g. all claims less than GBP XXXX or experts fees GBP XXXX. It is unlikely that the broker will be aware of any such arrangements that insurers may have, so the claims agreement parties must incorporate details as necessary. 2 Please note that the Lloyd s 1999 Claims Scheme is to due to be replaced by the Lloyd s 2005 Claims Scheme Page 13 of 26

14 Appendix A Slip Headings Defined (EXPERT(S) FEES COLLECTION:) BUREAUX ARRANGEMENTS: (NON-BUREAUX ARRANGEMENTS) (SIGNING PROVISIONS:) The party(ies) responsible for the collection of experts fees. There are eight 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. Any specific arrangements relating to the bureaux including administrative arrangements for premium settlement, delinked accounting, and policy signing or basis of policy agreement clauses. To be used as appropriate to record any specific provisions relating to insurers outside of the bureau. Any signing arrangements relating specifically to underwriters participation. Only to be completed if there is a requirement for disproportional signing or a variation to current market practice. Information All Classes Slip Heading INFORMATION DEFINITION Details of any information provided to underwriters 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 to all underwriters during placing. Fiscal & Regulatory All Classes Slip Heading TAX PAYABLE BY UNDERWRITER(S): (US CLASSIFICATION:) (NAIC CODES:) ALLOCATION OF PREMIUM TO CODING: FSA CLIENT CLASSIFICATION (IS THE BUSINESS SUBJECT TO THE DISTANCE MARKETING DIRECTIVE?) DEFINITION Any premium taxes and charges payable by underwriters from the premium paid to them e.g. Australian Income Tax. Any premium taxes and charges payable by the Insured in addition to the premium which are collected or administered by underwriters must be shown in the Taxes Payable by (Re) Insured and Administered by Underwriters heading of the Risk Details. To be entered as appropriate i.e. if Risk is in US Dollars. To be included when applicable i.e. if Risk is US Reinsurance. Any allocation of premium where multiple risk codes exist. To be included on all business. There are 6 possible options, please refer to the Appendix C of this document for further information. This heading must be included if the Client Classification heading specifies "Retail" or "Retail Exempt". If the Client Classification heading specifies "Commercial", "Large Risk", Group Risks" or "Reinsurance" it must be omitted. Where it appears the only applicable answers are "yes" or "no". Page 14 of 26

15 Appendix B An example compliant Non-Marine Direct Slip RISK DETAILS SLIP STRUCTURE SLIP EXAMPLE TYPE: The nature of the risk. TYPE: (Non-marine generic example). 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. FORM: J (NMA 2420) **INSURED: The Insured s name and where appropriate their address and/or business. INSURED: XYZ Ltd 123 Wickley Road London L20 1MP Page 15 of 26

16 Appendix B An example compliant Non-Marine Direct Slip SLIP STRUCTURE SLIP EXAMPLE **PERIOD: For the majority of risks the period must include the inception date and time of day, expiry date and time of day as well as the applicable time zone. As an alternative to specifying the time of day it is acceptable to specify both days inclusive, although the applicable time zone is still required. PERIOD: From: 1 st July 2005 GMT To: 30 th June 2006 GMT Both days inclusive. 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 risks where specific dates of inception or expiry are not known, for example voyages, constructions and sporting events, the specific events dictating the period must be stated. 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. INTEREST: Interest or subject matter insured or nature of liability. INTEREST: (Non-marine generic example). **SUM INSURED: Sum insured or reinsured or indemnity or monetary limits. SUM INSURED: GBP XX,XXX,XXX Page 16 of 26

17 Appendix B An example compliant Non-Marine Direct Slip SLIP STRUCTURE SLIP EXAMPLE SITUATION: Situation, territorial limits or location. SITUATION: 123 Wickley Road London L20 1MP CONDITIONS: Identification, qualification or variation in perils including the wording, clauses, conditions and amendments to any clauses in basic form. All standard wordings and clauses must be clearly identified by name and reference. Any nonstandard wording or clauses must be referred to here and attached to the slip. CONDITIONS: XXX wording as attached. EXPRESS 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. EXPRESS WARRANTIES: (To be inserted if any). CONDITIONS PRECEDENT: 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. CONDITIONS PRECEDENT: (To be inserted if any). SEVERAL LIABILITY: The several liability notice that applies. This must be either the insurance or reinsurance version of LSW1001, and should be included in full on all slips to ensure the (Re) Insured is fully aware of the notice. SEVERAL LIABILITY: The subscribing insurers obligations under contracts of insurance to which they subscribe are several and not joint and are limited solely to the extent of their individual subscriptions. The subscribing insurers are not responsible for the subscription of any co-subscribing insurer who for any reason does not satisfy all or parts of its obligations. Page 17 of 26

18 Appendix B An example compliant Non-Marine Direct Slip SLIP STRUCTURE SLIP EXAMPLE CHOICE OF LAW & JURISDICTION: The court that will have jurisdiction in the event of a dispute between Insured and insurers and the law that will apply, for further detailed information on this heading please see Lloyd s bulletin Y3406. CHOICE OF LAW & JURISDICTION: This insurance shall be governed by and construed in accordance with the law of England and Wales and each party agrees to submit to the exclusive jurisdiction of the Courts of England and Wales. **PREMIUM: The premium to be paid by the Insured. PREMIUM: GBP XX,XXX PAYMENT TERMS: The Premium Payment Terms applied to the contract by the Slip Leader, including Premium Payment Clauses, Warranties and Conditions. The Settlement Due Date must still be shown in Panel One of the slip and not here. PAYMENT TERMS: 60 day premium payment condition LSW3000. BROKERAGE: The brokerage allowance, or equivalent details. If this is paid as a fee rather than a percentage of the premium this is a private arrangement between broker and client and the brokerage must be specified as zero or Not applicable in the slip. BROKERAGE: XX% OTHER DEDUCTIONS FROM PREMIUM: Any additional deductions from premium e.g. administration fees, sundry payments, etc. OTHER DEDUCTIONS FROM PREMIUM: None. **TAXES PAYABLE BY INSURED AND ADMINISTERED BY UNDERWRITERS: Any premium taxes and charges payable by the Insured in addition to the premium stated above, which are collected and/or administered by underwriters e.g. UK Insurance Premium Tax. Any premium taxes and charges payable by underwriters must be shown in the Fiscal & Regulatory section. TAXES PAYABLE BY INSURED AND ADMINISTERED BY UNDERWRITERS: 5% UK Insurance Premium Tax on Gross Premium. RECORDING, TRANSMITTING & STORING INFORMATION: Details of procedures for storage of data, documents and other information. RECORDING, TRANSMITTING & STORING INFORMATION: Where the broker maintains risk and claim data/information/documents the broker may hold data/information/documents electronically. Page 18 of 26

19 Appendix B An example compliant Non-Marine Direct Slip SUBSCRIPTION AGREEMENT SLIP STRUCTURE SLIP EXAMPLE SLIP LEADER: 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 name here when they write their line. SLIP LEADER: ABC Syndicate 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 LEADER and LONDON MARKET SLIP LEADER. In such cases subsequent provisions will need to be specific with regard to any Slip Leader agreements. Page 19 of 26

20 Appendix B An example compliant Non-Marine Direct Slip SLIP STRUCTURE SLIP EXAMPLE OTHER AGREEMENT PARTIES FOR CONTRACT CHANGES, IF ANY: State those underwriters, other than the Slip Leader, who will agree contract changes on behalf of the subscribing underwriters in accordance with the terms agreed below. This must not include those underwriters who wish to agree contract changes on their own behalf. OTHER AGREEMENT PARTIES FOR CONTRACT CHANGES, IF ANY: GHI Company Ltd N.B. Care must be taken to avoid conflict with leading underwriter agreements. This heading must therefore only be used when the GUA is being utilised. BASIS OF AGREEMENT TO CONTRACT CHANGES: Specify any leading underwriter agreement that applies, e.g. NMA, LUAMC, GUA and applicable class of business schedule(s) etc. BASIS OF AGREEMENT TO CONTRACT CHANGES: GUA (October 2001) with Non-Marine Schedule (October 2001). DOCUMENT PRODUCTION: The type of insuring documentation to be produced, who produces it, who agrees it and any particular requirements e.g. specific language. Where a slip policy is used the words Broker to produce slip policy for XIS approval must be incorporated. DOCUMENT PRODUCTION: Broker to produce policy wording for Slip Leader s agreement, approval or comments. CLAIMS AGREEMENT PARTIES: Identification of the claims agreement parties e.g. Slip Leader, plus the first IUA company and Xchanging Claims Services. CLAIMS AGREEMENT PARTIES: ABC Syndicate GHI Company Ltd Xchanging Claims Services Page 20 of 26