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Market ReformProgramme Office
Update on Market Reform
Andy Brookes, Ben Sayles, Paul Tuvey
Market Reform Forum
29 June 2006
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Market Reform Update
• Contract Certainty
• Contract Documentation Processes
• Back office electronic infrastructure
– Accounting and Settlement – design work
– Repository for claims and A&S – today’s special topic
www.marketreform.co.uk
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Contract Certainty – The headlines
• Market on target to achieve 2006 milestones. Currently ahead of schedule
• Guidance mostly complete. Just subjectivities to come in 2006
• FSA mid year review complete
– See FSA website for write-up
– FSA issues: Quality of data; exceptions; legacy policies; 2007
– Expect a CEO letter from Dane Douetil
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• Open market: 81% certain, up from 78% for March
• Certificates of insurance: 89% certain, up from 82%
• Overall: 84%, from 80% in March
Broker Contract Certainty Returns for April 2006
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Broker Contract certainty Returns for April 2006
The overall score continues to improve
Broker Contract Certainty Returns 2006 - Contract Certainty
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06
Open Market Contracts and Certificates Open Market Contracts Certificates of Insurance
Target
By Inception to Mar-06, thereafter inc late placements and late orders
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Broker Contract certainty Returns for April 2006
Evidence of Cover
Broker Contract Certainty Returns 2006 - Evidenced to Client in 30 days
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06
Open Market Contracts and Certificates - Evidenced to Client in 30 days Open Market Contracts - Evidenced to Client in 30 days
Certificates of Insurance - Evidenced to Client in 30 days
Target
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Status update - PublicationsC
on
tract
Cert
ain
ty
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• Subjectivities
– Guidance currently in preparation, to include a poor subjectivity example with explanatory guidance to work through it, and a good subjectivity
– Should be published this week
• Model Signing Provisions
– Published, 27 April
• Exceptions
– Published, 3 May
• Market Reform Slip
– Published, 8 June
• Slip audit consultation
– Published, 8 May
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Legacy
• Guidance
– Code of Practice: should be Board endorsed
– Published, 15/05/06
– Requirement: Each firm to advise MRPO of primary contact
(e-mail to: [email protected])
– Market Awareness session(s) and FAQs to follow
• What you should do?
– Establish your baseline position
– Broker contact clients, as appropriate
– Lead/broker agreement of “yes/no” for each risk
– Produce legacy policies only where necessary
– Keep records, and hit your own targets
www.marketreform.co.uk
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Richard Ward letter on 22 May - contract documentation
• Publish a simple set of checks to be completed before the contract is entered into. These will be a rationalised set of checks based on those in the existing QA tool
• Allow each managing agent to perform the checks themselves or to place reliance on a leader or a suitable service provider
• Facilitate immediate use of the contract; at minimum to produce and issue a client copy within 30 days
• Allow managing agents and brokers to agree on branding of the client copy, provided it includes agreed Lloyd’s branding.
• Validation by Franchisor – all pilot risks submitted
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Accounting and Settlement
• Measurement and checks
– Benchmark data – late but pressing on
– Accounting procedure checks published April on MRPO website
– Tax checks: should have been end May 06; now July
• Strategy
– Detailed documentation in progress – mid-August publication
– Franchisor reporting – end-September
www.marketreform.co.uk
Market ReformProgramme Office
www.marketreform.co.uk
Andy Brookes, Ben Sayles, Paul Tuvey
Market Reform Forum
29 June 2006
