1. LMP – Insurance Documentation Contract Certainty Initial Implementations THIS DOCUMENT APPLIES TO THE INITIAL IMPLEMENTATIONS OF THE CONTRACT CERTAINTY PROPOSALS ONLY, AT THIS STAGE January 2005

2. CCSG Membership Kevin Collins(MPC)Chair + MPC member John Bentley(LMA) Malcolm Forbes-Wilson (Aon)DOC Chair Paul Gold(GE Frankona) Steve Hulm(LMP)Secretary Roy Laker(LMP) Jo Langley(JLT) Malcolm Massie(Amlin) Dave Matcham(IUA) Edward Moss(Catlin)MPC member Rob Myers(XIS) Mike Reidie (Marsh)DOC + LMSC member Iain Saville(Lloyds)Head of BPR Phillip Sexton(Hiscox) Peter Spires(Lloyds)

3. CCSG Has … Developed the process in detail (4 options): 1.Contract certainty end-vision. Slip leader confirms policy (may use service provider). Broker/Slip Leader finalise policy. 2.XIS technical check. Broker/Slip Leader finalise policy. 3.XIS technical check (early) + signing 4.XIS technical check (after placing) + signing Prepared an Implementation Guide Developed an Implementation Strategy & Plans Gained Lloyds feedback on proposals: Tax & regulatory checking performed by XIS. Value XIS checks to safeguard licenses Will review checking performed Options 3 & 4 can proceed with Lloyds markets Engaged with broker group (DOC) to implement + now engaging with companies & LMA

4. Key Features (for all options) Fully-claused placing document Use of model wordings and clauses, wherever possible Leader-only agreement, wherever possible Early agreement and checking of the wording Early finalisation of the policy Monitor performance – to demonstrate achievement Early delivery of an evidence of coverage for the client

5. DRAFT: Documentation – Process Overview. Process objectives: Achieve contract certainty Evidence to the client Macro process steps: Quote Firm order placement Provide closing information Technical & regulatory policy check Finalise policy & evidence to client Process inputs: Risk information Client requirements Relevant wordings & clauses Process outputs: Contract agreed and documented Contract evidenced to the client Process measures: Wording certainty date versus inception date Firm order date versus inception date Contract certainty date versus inception date Date evidenced to the client versus inception date Start: Client Requests Quotation End: Contract evidenced to client

6. DRAFT: Documentation – Options 1 & 2. Option 1 Broker prepares draft LMP policy & agrees with slip-leader Slip Leader confirms policy up-front Service provider may conduct Technical / Regulatory check where required by Slip Leader Broker/Slip Leader finalise policy after signing-down Contract certainty can be achieved and evidenced to client by inception date Option 2 Broker prepares draft LMP policy & agrees with slip-leader Slip Leader confirms policy up-front XLMS conduct Technical/Regulatory check and confirm to Slip Leader & broker Broker/Slip Leader finalise policy after signing down Contract certainty can be achieved and evidenced to client by inception date

7. Quote Request quote Draft policy Present & agree policy Quote Review quote(s) Confirm policy Firm Order Placement Firm order Seek & write lines Placing complete Identify changes Provide closing information Signing down Prepare closings Submit / issue closings Submit policy Check closings Technical (& for Lloyds Regulatory) policy check - if changes Finalise Policy Confirm technical & regulatory check performed Add jacket / attestation clause and security schedule Sign policy Prepare copies Issue evidence to client Technical (& for Lloyds Regulatory) policy check Options 1: Conducted by Slip Leader – or service provider. Option 2: Conducted by XLMS. Proceed to Finalise Policy if no change from original draft policy DRAFT: Documentation – Options 1 & 2. Options 1 & 2: Conducted by broker/slip leader Options 1: Conducted by Slip Leader – or service provider. Option 2: Conducted by XLMS.

8. DRAFT: Documentation – Options 3 & 4. Option 3 Broker prepares draft LMP policy & agrees with slip-leader Slip leader invokes XLMS check up- front XLMS conduct Technical / Regulatory check and confirm to slip-leader & broker XLMS finalise Policy after signing-down Contract certainty can be achieved and evidenced to client by inception date Option 4 Broker prepares draft LMP policy & agrees with slip-leader Broker invokes XLMS check after signing down XLMS conduct Technical / Regulatory check and confirm to slip-leader & broker XLMS finalise Policy after signing-down Contract certainty can be achieved and evidenced to client by inception date

9. Quote Request quote Draft policy Present & agree policy Quote Review quote(s) Confirm policy Firm Order Placement Firm order Seek & write lines Placing complete Identify changes Provide closing information Signing down Prepare closings Submit / issue closings Submit policy Check closings Technical (& for Lloyds Regulatory) policy check Finalise Policy Confirm technical & regulatory check performed Add jacket / attestation clause and security schedule Sign policy Prepare copies Issue evidence to client Technical (& for Lloyds Regulatory) policy check Option 3: Review draft policy prior to, or at, Firm order placement Option 3: Proceed to Finalise Policy if no change from original draft policy DRAFT: Documentation – Options 3 & 4. Option 4: Proceed to Firm order placement from quote Option 4: Conduct Technical & Regulatory review after signing down

10. DRAFT: Process Charts - Key. Key: Process flow (data transfer): Prime process flow Alternative process flow Decision point System or Database Process Step Document 1.1 Request Quote Policy ? Wording Certainty (amber provisional) Firm Order Contract Certainty (amber provisional) Date Evidenced to Client W F C D

11. DRAFT: Interim approach for Lloyds and Companies pending Lloyds review of XLMS activities - Option 3. Client Placing Broker Slip Leader(s) Following Underwriters 1.1 Request Quote Inception TIME 1.2 Draft, Present & Agree Policy 1.4 Select Quote 2.1 Firm Order 2.3 Placing Complete 3.1 Sign Down 2.2 Request & Write Line(s) 3.2 Prepare Closings 5.3 Receive Evidence 3.5 Check Closings 5.2 Issue Evidence Bureau/Service Provider D 4.1 Technical (& Regulatory) Check Inception C C 5.1 Finalise Client Policy 3.3 Submit Closings W 4.2 Technical (& Regulatory) Check W If changes applied 3.4 Submit Policy FDOS&A Stage 2 ? W ? ? ?? ? F 2.4 Identify Changes ? 1.5 Confirm Policy ?? Policy 1.3 Quotes/ Support Quotes XLMS

12. DRAFT: Interim approach for Lloyds and Companies pending Lloyds review of XLMS activities - Option 4. 1.1 Request Quote Inception TIME 1.2 Draft, Present & Agree Policy 2.1 Firm Order 2.3 Placing Complete 3.1 Sign Down 3.2 Prepare Closings 5.3 Receive Evidence 3.5 Check Closings 5.2 Issue Evidence D Inception C C 5.1 Finalise Client Policy 3.3 Submit Closings W 4.2 Technical (& Regulatory) Check W If changes applied 3.4 Submit Policy FDOS&A Stage 2 ? ? ?? ? F 2.4 Identify Changes ? 1.5 Confirm Policy Policy 1.4 Select Quote 1.3 Quotes/ Support Quotes XLMS 2.2 Request & Write Line(s) Client Placing Broker Slip Leader(s) Following Underwriters Bureau/Service Provider

13. DRAFT: Documentation – Summary. Key Differences: Both options 3 & 4 can meet our objectives: Contract Certainty by inception Evidence of Coverage by inception After the Lloyds Review: Options 1 & 2 could offer potential for streamlining the process Option 3 Broker prepares fully-claused draft LMP policy & agrees with slip-leader Slip leader invokes XLMS check up- front XLMS conduct Technical / Regulatory check and confirm to slip-leader & broker XLMS finalise Policy after signing-down Contract certainty can be achieved and evidenced to client by inception date Option 4 Broker prepares fully-claused draft LMP policy & agrees with slip-leader Broker invokes XLMS check after signing down XLMS conduct Technical / Regulatory check and confirm to slip-leader & broker XLMS finalise Policy after signing-down Contract certainty can be achieved and evidenced to client by inception date

14. Process Failures – what can go wrong ? Significant risk factors: 1.Changes are applied during placing AND either: It is not reflected in all documentation It is wrongly applied Insufficient agreement is gained 2.XLMS technical check not satisfactorily completed due to either: Rejections/queries not being resolved Unable to complete in a timely fashion due to e.g. Submitted too late File queried/rejected Seasonal peaks Lack of resource File lost

15. CCSG Implementation Planning Initial Implementations Q1-Q2 2005. 200-300 risks across all classes. Process options 3 & 4 for Managing Agents. 1 & 2 possible for companies ? Classes identified: Aviation (Hull, War, Aviation General); PI; D&O; NA Property Fac R/I; Treaty; Binders; Marine Performance Monitoring in parallel (broker spreadsheet returns) to monitor key dates achieved. Brokers identifying possible risks to be processed within initial implementations: Aon, Benfield, Heath Lambert, JLT, Marsh, Miller, Willis Now engaging with markets (via IUA, LMA & non-IUA companies)

16. Implementation Timetable Publish implementation guide (options 3&4)Dec 2004CCSG Confirm participants Dec 2004CCSG Initial implementationsQ1–Q2 2005CCSG Initial performance monitoringQ1–Q2 2005LMSC Lloyds review of checking Q1-Q2 2005Lloyds/XIS Amend Lloyds underwriting reqtsTBCLloyds Review LMP Policy GuidelinesQ1 2005LMP Determine impact of Lloyds findingsQ2 2005CCSG/MRGE Publish initial performance resultsQ1-Q2 2005MRGE Evaluate initial implementationsQ1-Q2 2005CCSG/MRGE/XIS Define strategic technology solution(s)end Q2 2005CCSG/MRGE Review service change requestsQ3 2005 TBCIUA/LMA/XIS Publish implementation guide (other options) Q3 2005 TBCCCSG/MRGE Plan & prepare further implementationsQ3 2005 TBCCCSG/MRGE Commence further implementationsQ3-Q4 2005 TBCCCSG