Market Reform: 2006 progress 21 December 2006 Andy Brookes

Market Reform Dec 06 assessment Contract Certainty MRG Objectives

Market Reform Dec 06 assessment Contract Certainty Market achievement of monthly volume of certain contracts (30% by Q4 05, 60% by Q2, 85% by Q4) MRG Objectives Overall CC score 92% in September

Market Reform Dec 06 assessment Contract Certainty Market achievement of monthly volume of certain contracts (30% by Q4 05, 60% by Q2, 85% by Q4) Market slip compliance rated 99% (Q1); MRG Objectives % achieved Overall CC score 92% in September

Market Reform Dec 06 assessment Contract Certainty Market achievement of monthly volume of certain contracts (30% by Q4 05, 60% by Q2, 85% by Q4) Market slip compliance rated 99% (Q1); 85% of slips fully compliant (Q4) MRG Objectives % achieved Overall CC score 92% in September Superseded by CC measurement

Market Reform Dec 06 assessment Contract Certainty Market achievement of monthly volume of certain contracts (30% by Q4 05, 60% by Q2, 85% by Q4) Market slip compliance rated 99% (Q1); 85% of slips fully compliant (Q4) Resolve signed lines, late orders and other outstanding contract certainty issues (Q2) MRG Objectives % achieved Overall CC score 92% in September Superseded by CC measurement

Market Reform Dec 06 assessment Contract Certainty Market achievement of monthly volume of certain contracts (30% by Q4 05, 60% by Q2, 85% by Q4) Market slip compliance rated 99% (Q1); 85% of slips fully compliant (Q4) Resolve signed lines, late orders and other outstanding contract certainty issues (Q2) Clear plan for continued improvement of CC in (Q3) MRG Objectives % achieved Overall CC score 92% in September Shared with the FSA Superseded by CC measurement

Market Reform Dec 06 assessment Contract Certainty Market achievement of monthly volume of certain contracts (30% by Q4 05, 60% by Q2, 85% by Q4) Market slip compliance rated 99% (Q1); 85% of slips fully compliant (Q4) Resolve signed lines, late orders and other outstanding contract certainty issues (Q2) Clear plan for continued improvement of CC in (Q3) Avoid regulatory intervention MRG Objectives % achieved So far… Overall CC score 92% in September Shared with the FSA Superseded by CC measurement

Market Reform Dec 06 assessment Contract Certainty Market achievement of monthly volume of certain contracts (30% by Q4 05, 60% by Q2, 85% by Q4) Market slip compliance rated 99% (Q1); 85% of slips fully compliant (Q4) Resolve signed lines, late orders and other outstanding contract certainty issues (Q2) Clear plan for continued improvement of CC in (Q3) Avoid regulatory intervention Build user-friendly front-end for contract certainty checks (Q1) MRG Objectives % achieved So far… Overall CC score 92% in September Shared with the FSA QA tools also streamlined for Lloyds Contract Documentation Pilot and for Binding Authorities Superseded by CC measurement

Market Reform Dec 06 assessment Contract Certainty Market achievement of monthly volume of certain contracts (30% by Q4 05, 60% by Q2, 85% by Q4) Market slip compliance rated 99% (Q1); 85% of slips fully compliant (Q4) Resolve signed lines, late orders and other outstanding contract certainty issues (Q2) Clear plan for continued improvement of CC in (Q3) Avoid regulatory intervention Build user-friendly front-end for contract certainty checks (Q1) Market feasibility for next stage of development of QA tools (Q4) MRG Objectives % achieved So far… Overall CC score 92% in September Shared with the FSA QA tools also streamlined for Lloyds Contract Documentation Pilot and for Binding Authorities Further enhancements scheduled for Lloyds market next year Superseded by CC measurement

Market Reform Dec 06 assessment Contract Certainty What else is happening and what should be live issues for your firm? Industry Assessment of Success – 8 th and 25 th January with FSA MR Slip Guidance – Orders Hereon, Document Production, Fiscal & Regulatory, NCAD.… Stamp Conditions – guidance forthcoming Legacy

Market Reform Dec 06 assessment MRG Objectives Accounting & Settlement

Market Reform Dec 06 assessment MRG Objectives Accounting & Settlement Establish measurement regime (Q1); Some statistics available from end October

Market Reform Dec 06 assessment MRG Objectives Accounting & Settlement Establish measurement regime (Q1); publish accounting checks (Q1) Achieved, but late Some statistics available from end October

Market Reform Dec 06 assessment MRG Objectives Accounting & Settlement Establish measurement regime (Q1); publish accounting checks (Q1) For ACORD international standard A&S processes: Achieved, but late Some statistics available from end October

Market Reform Dec 06 assessment MRG Objectives Accounting & Settlement Establish measurement regime (Q1); publish accounting checks (Q1) For ACORD international standard A&S processes: –Agree and document outline processes (Q1) Achieved, but late Some statistics available from end October

Market Reform Dec 06 assessment MRG Objectives Accounting & Settlement Establish measurement regime (Q1); publish accounting checks (Q1) For ACORD international standard A&S processes: –Agree and document outline processes (Q1) –Publish detailed technical and business information (Q2) Consolidated and completed in October Achieved, but late Some statistics available from end October

Market Reform Dec 06 assessment MRG Objectives Accounting & Settlement Establish measurement regime (Q1); publish accounting checks (Q1) For ACORD international standard A&S processes: –Agree and document outline processes (Q1) –Publish detailed technical and business information (Q2) –Secure public commitment to implementation by brokers and carriers; with timetable for migration from old processes (Q4) Consolidated and completed in October Achieved, but late Some statistics available from end October MRG reprioritisation. Insufficient demand from market

Market Reform Dec 06 assessment MRG Objectives Accounting & Settlement Establish measurement regime (Q1); publish accounting checks (Q1) For ACORD international standard A&S processes: –Agree and document outline processes (Q1) –Publish detailed technical and business information (Q2) –Secure public commitment to implementation by brokers and carriers; with timetable for migration from old processes (Q4) Implement A&S repository (Q4) Consolidated and completed in October Achieved, but late Some statistics available from end October and Direct Load live Sept MRG reprioritisation. Insufficient demand from market DRI live December

Market Reform Dec 06 assessment Accounting & Settlement What else is happening and what should be live issues for your firm? Repository – Take up – Pricing – Further phases in 2007 Measurement and right first time Strategy – Speak to Rob Campbell (MRPO)

Market Reform Dec 06 assessment Claims Infrastructure MRG Objectives

Market Reform Dec 06 assessment Claims Infrastructure Publish processes and procedures for electronic claims – Lloyds first (Q1); MRG Objectives

Market Reform Dec 06 assessment Claims Infrastructure Publish processes and procedures for electronic claims – Lloyds first (Q1); IUA next (Q4) MRG Objectives Rescheduled for Q1, 2007

Market Reform Dec 06 assessment Claims Infrastructure Publish processes and procedures for electronic claims – Lloyds first (Q1); IUA next (Q4) Publish implementation manual for electronic transfer of documents using (ACORD DRI) international standards (Q1) MRG Objectives Rescheduled for Q1, 2007

Market Reform Dec 06 assessment Claims Infrastructure Publish processes and procedures for electronic claims – Lloyds first (Q1); IUA next (Q4) Publish implementation manual for electronic transfer of documents using (ACORD DRI) international standards (Q1) Plan for common claims procedure in London (Q1) MRG Objectives Reviewed in A&S strategy work, no plans to progress Rescheduled for Q1, 2007

Market Reform Dec 06 assessment Claims Infrastructure Publish processes and procedures for electronic claims – Lloyds first (Q1); IUA next (Q4) Publish implementation manual for electronic transfer of documents using (ACORD DRI) international standards (Q1) Plan for common claims procedure in London (Q1) Complete IUA repository pilot and agree next steps (Q2) MRG Objectives Reviewed in A&S strategy work, no plans to progress Started June, extended into 2007 Rescheduled for Q1, 2007

Market Reform Dec 06 assessment Claims Infrastructure Publish processes and procedures for electronic claims – Lloyds first (Q1); IUA next (Q4) Publish implementation manual for electronic transfer of documents using (ACORD DRI) international standards (Q1) Plan for common claims procedure in London (Q1) Complete IUA repository pilot and agree next steps (Q2) Deliver Lloyd's electronic infrastructure into market testing (Q2) MRG Objectives Reviewed in A&S strategy work, no plans to progress Started June, extended into 2007 Live Now Rescheduled for Q1, 2007

Market Reform Dec 06 assessment Claims Infrastructure Publish processes and procedures for electronic claims – Lloyds first (Q1); IUA next (Q4) Publish implementation manual for electronic transfer of documents using (ACORD DRI) international standards (Q1) Plan for common claims procedure in London (Q1) Complete IUA repository pilot and agree next steps (Q2) Deliver Lloyd's electronic infrastructure into market testing (Q2) (At least 4) brokers and (9) Lloyds Managing Agents processing 100% of new claims electronically, supported by XCS (Q4) MRG Objectives Reviewed in A&S strategy work, no plans to progress Started June, extended into 2007 Live Now Small but increasing numbers of wholly electronic claims processed: 31 MAs, 24 brokers & XCS committed to use Rescheduled for Q1, 2007

Market Reform Dec 06 assessment Claims Infrastructure Publish processes and procedures for electronic claims – Lloyds first (Q1); IUA next (Q4) Publish implementation manual for electronic transfer of documents using (ACORD DRI) international standards (Q1) Plan for common claims procedure in London (Q1) Complete IUA repository pilot and agree next steps (Q2) Deliver Lloyd's electronic infrastructure into market testing (Q2) (At least 4) brokers and (9) Lloyds Managing Agents processing 100% of new claims electronically, supported by XCS (Q4) Set strategy for claims infrastructure beyond ECF (Q4) MRG Objectives Reviewed in A&S strategy work, no plans to progress Started June, extended into 2007 Live Now Small but increasing numbers of wholly electronic claims processed: 31 MAs, 24 brokers & XCS committed to use Reviewed in A&S strategy work, ECF upgrades in MRG plans for 2007 Rescheduled for Q1, 2007

Market Reform Dec 06 assessment Claims Infrastructure What else is happening and what should be live issues for your firm? Repository – Take up – Pricing – Further phases in 2007

Market Reform Dec 06 assessment Other MRG Objectives

Market Reform Dec 06 assessment Other Publish legacy Code of Practice (Q1); MRG Objectives

Market Reform Dec 06 assessment Other Publish legacy Code of Practice (Q1); measured progress against code (Q4) MRG Objectives Need to demonstrate significant legacy reduction in 2007

Market Reform Dec 06 assessment Other Publish legacy Code of Practice (Q1); measured progress against code (Q4) Measure use of new infrastructure and business benefits (on-going) MRG Objectives Need to demonstrate significant legacy reduction in 2007

Market Reform Dec 06 assessment Other Publish legacy Code of Practice (Q1); measured progress against code (Q4) Measure use of new infrastructure and business benefits (on-going) Training: approved courses for contract certainty (Q1); MRG Objectives Need to demonstrate significant legacy reduction in 2007

Market Reform Dec 06 assessment Other Publish legacy Code of Practice (Q1); measured progress against code (Q4) Measure use of new infrastructure and business benefits (on-going) Training: approved courses for contract certainty (Q1); framework for claims training (Q2); MRG Objectives Need to demonstrate significant legacy reduction in 2007

Market Reform Dec 06 assessment Other Publish legacy Code of Practice (Q1); measured progress against code (Q4) Measure use of new infrastructure and business benefits (on-going) Training: approved courses for contract certainty (Q1); framework for claims training (Q2); participation targets (Q4) MRG Objectives None set, training as required by firms Need to demonstrate significant legacy reduction in 2007

Market Reform Dec 06 assessment Other In Addition Publish legacy Code of Practice (Q1); measured progress against code (Q4) Measure use of new infrastructure and business benefits (on-going) Training: approved courses for contract certainty (Q1); framework for claims training (Q2); participation targets (Q4) MRG Objectives None set, training as required by firms Need to demonstrate significant legacy reduction in 2007

Market Reform Dec 06 assessment Other In Addition Publish legacy Code of Practice (Q1); measured progress against code (Q4) Measure use of new infrastructure and business benefits (on-going) Training: approved courses for contract certainty (Q1); framework for claims training (Q2); participation targets (Q4) Schematron MRG Objectives None set, training as required by firms Tool to ensure right ACORD are messages sent Need to demonstrate significant legacy reduction in 2007

Market Reform Dec 06 assessment Communications Questions