Presentation on theme: "Market Reform Forum Andy Brookes, MRPO 31 May 2007."— Presentation transcript:
Market Reform Forum Andy Brookes, MRPO 31 May 2007
Market Reform Page 2 Contract certainty - Headlines Performance continues to exceed 90% target – March brokers achievement rate – 94% …..in line with managing agent and company data We will update the FSA; but firm visits matter more Repeat of market survey August / September Disband governance groups September or earlier CC Guidance consolidation
Market Reform Page 4 Managing Agent and Company Market data Managing agents April score 94%, same as March MA open market 93% MA binders 96% Company market March score 96%
Market Reform Page 5 Summary of the guidance re write Modifies the definition –Emphasis on formation, not inception –So late placement included (but keep monitoring it) Timeless principles –Targets in guidance, not principles Requires firms to demonstrate performance –Verification against a checklist –Sample or File audits –System or Process controls One code applicable to the whole UK general insurance industry Defines the scope of contract certainty Consistent structure
Market Reform Page 6 The structure of CC 1. All terms clear and unambiguous including basis of participation 2. Contract Documentation provided to the insured promptly 3. Contract changes need to be certain 4. And documented promptly 5. Final participation provided promptly 5 key elements to contract certainty……. …. but demonstration of performance on 1 and 2
Market Reform Page 7 Plan for publication MRG signed off CCSC (non subscription market) signed off FSA acknowledge and support AIRMIC signed off CII supportive Publish June 13 –Code of Practice –before and after comparison –quick reference guide Limited public sessions –You front it
Market Reform Page 8 But dont relax on CC Demonstrate that contract certainty is embedded, no going back. Continue to monitor instances where contract formation post dates inception. Remember that contract certainty is still a regulatory priority and that the FSA has all the powers it needs.
Market Reform Page 10 Legacy Measured by index number – volume as recorded in July 2006 is used as the base Target is to reduce the index to 60% by end June and 40% by end 2007 Lloyds index currently 59% (ahead of target) IUA data soon to be available
Market Reform Page 11 Other placing related activity Contract quality: checking documentation, end of Stage 2 –Martin Roberts, LMA –XIS communication forthcoming New release of the Market Reform Slip July –reflect the approach to be taken to contract documentation/end of Stage 2 for Lloyds –to tidy other aspects of the standard –With Associations for comment by 8 June –Dont use draft yet! Testing certification facility –ACORD standards are key to reform –TCF now available as a means of insuring that you ACORD messages are consistent
Market Reform Page 13 Other projects: delinking Carrier are more likely to get paid on time if transaction de linked Reviewing broker reports with LMBC Prepared by JMD Specialist Insurance Services from information provided by XIS Lloyds - Delinked Values and Percentages (2005-2007 Signings)
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