Presentation on theme: "The Market Reform Contract Endorsement (MRCE) February 2008."— Presentation transcript:
The Market Reform Contract Endorsement (MRCE) February 2008
Agenda Background Scope Objectives Structure Timescales Example Benefits E-MRCE Further Information Questions?
Slip Developments and Versions June 2006 Market Reform Slip (MRS) June 2007 Market Reform Contract (MRC) December 2007 Market Reform Contract Endorsement (MRCE) February 2008 MRC and MRCE for Binders & Lineslips Q1 2008 Electronic MRCE (E-MRCE)
Out of Scope Should be used for all contract changes, premium adjustments, reinstatement provisions in respect of: Insurance and reinsurance contracts regardless of whether MRC was used for the original placement Declarations or off-slips attaching to lineslips Declarations off limited binding authority agreements where broker, insurers and coverholder agree its appropriate Marine open cargo covers and declarations attaching thereto In-Scope Changes to binding authorities and lineslips. Separate guidance being developed, watch this space… MRCE Scope
MRCE Objectives To standardise the endorsement format for contract changes. To work with or without the GUA To streamline the overall endorsement process and standardise the agreement methodology. To allow the endorsement documentation to be used as the insurer contract change document. To improve the ease of transition over to electronic trading The Honeycomb no longer exists! X
Risk & Endorsement Identification Details section A mandatory section of the MRCE Identifies contract being changed for all parties Mandatory headings in this section are: –UMR –Endorsement Reference –Broker name (can be via branding) –Broker number (may be extracted from UMR) Conditional headings are: –Insured (if insurance) –Reinsured (if reinsurance) –Retrocedant (if retrocession) –Original insured (reinsurance) –Original reinsured (retrocession) Optional - as required from MRC data dictionary
Contract Changes section A mandatory section Description of the change(s) being made Use MRC headings as appropriate to describe changes Mandatory heading –Effective date Contract certainty principles apply –No abbreviations –Monetary amounts specified with currency codes not £, $ –Avoid terms which create ambiguity –Standard wordings and clauses clearly identified
Information section An optional section May be omitted if none exists Addtional information should either be included here or referenced here then included as an attachment
Agreement section A mandatory section Where insurers indicate their agreement to the endorsement Either a stamp if paper document or as per e-MRCE guidance Any subjectivities must be expressed as a fully claused condition: –The condition/action that needs to occur, by whom and to what standard –The applicable timescale, if any within which condition must be met –Terms which apply until condition met –Consequences if condition not met
Contract administration and advisory section An optional section Addtional information relevant to processing, but not the client No mandatory headings Conditional headings are: –Settlement Due Date – required where a premium exists –Instalment Premium Period of Credit –If premium in instalments –Adjustment Premium Period of Credit – If premium is adjustable Optional headings from MRC data dictionary as necessary Consider applying the following next to the SDD heading: In the absence of an insurer specified Settlement Due Date, the Settlement Due Date will be calculated by applying the terms of trade for the original premium to whichever is the later of either: 1) the latest effective date of the subject matter of the contract endorsement; or 2) the date on which the final insurer agreement is obtained.
MRCE Timescales MRCE can be used immediately for all in-scope business Transition period up until 31 st March 2008 All contract changes presented after 1 st April 2008 will have to use the MRCE MRCE must be used for all in-scope contract changes from 1 st April 2008
Benefits of MRCE Contract Certainty: –Supports the principles of Contract Certainty by speeding up the prompt provision to the insured. Consistency: –Standardises business process by allowing endorsements to be handled in a consistent manner and format. Efficiency: –Subsequent processes are more efficient as the agreed endorsement can also be used as contract documentation Compatibility: –Enables mapping to the ACORD Reinsurance & Large Commercial (RLC) Placement XML message.
e-MRCE Endorsements Steering Group is developing procedures for the agreement of contract changes via email Two market sessions are planned: –14 th March 10am – 11.30am –18 th March 10am – 11.30am Sessions will detail the procedures to follow A panel of experts will be available to answer questions Presentations to be held in the auditorium in the new Willis building You must Pre-register to attend – contact MRO@marketreform.co.ukMRO@marketreform.co.uk
But briefly......What is e-MRCE? e-MRCE is the electronic submission and agreement of endorsements It is intended to focus non-complex endorsements where simple electronic communication is sufficient Three methods have been cited: –Email –E-Forms –ACORD XML –Proprietary platform (e.g. RI3K)
Email Agreement of endorsments London insurers playing catch up - Not rocket science! London brokers estimate that 35% of all their endorsements already done this way without any addtional legal framework or IT requirements. e.g. overseas markets However, if this is an issue for a given territory/client then consider the following: –How can you prove the endorsement was sent? –How can you prove what has been sent? –How can you prove when you sent and received it? One solution is - http://www.rpost.comhttp://www.rpost.com Description: R-Post provides legal and verifiable evidence of the content and time any e-mail has been sent and received by anyone, anywhere in the world. THERE MAY BE OTHERS, YOU TELL US!
ACORD E-Forms E-Form consistent with MRCE guidelines Allows XML data to be entered in a standardised format and sent to another party. High and Low tech solutions - E-Forms can be integrated into a brokers own systems or viewed and completed through a web browser Improve data quality, consistency and accuracy using a standardised format Creates a consistent user interface across the industry for data gathering ACORD Messages Placing Implementation Group have agreed an implementation guide Solution providers starting to build solutions
Further Information A copy of the MRCE Implementation guide can be found at: http://www.marketreform.co.uk/Documents/RD_MRC/MRC_Endorsement_Implementation_Guide_v1.0.pdf A copy of the MRCE Data Dictionary can be found at: http://www.marketreform.co.uk/Documents/RD_MRC/MRCE_Data_Dictionary_v1.0.xls Organisation Email Phone LMBC Mark.Knight@LMBC.co.uk 020 7397 0252 MRO firstname.lastname@example.org 020 7327 5220 LMA Peter.Martin@lmalloyds.com 020 7327 3333 IUA John.Hobbs@iua.co.uk 020 7617 4445