1 Market Reform Forum Update on business reform 31 March 2005 James Willison LMP
Mar 28, 2015
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Market Reform Forum
Update on business reform
31 March 2005
James Willison
LMP
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Objective: up to speed in half an hour……
Aims and Principles
Electronic infrastructure
Accounting and Settlement
Electronic Claims Files
Contract Certainty
LMP slips
Documentation, early implementations
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The aims of market reform
Contract Certainty Clarity of contract, leading to certainty of coverage, fewer disputes, less time wasted, a reduction in legal bills and improvements in downstream processing.
Service to the client
Process Efficiency Efficient capturing, storing and reuse of data, reduced error rates, and quicker premium payment processes. Lower costs.
To adopt processes that speed up the agreement of the contracts, the issuance of documentation and the subsequent agreement of claims.
Global standards To facilitate adherence to (or creation of) accepted internationally standards for accounting, message/business flows, and technology.
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Principles underpinning reform
Reduce ‘Londonisms’: international firms must buy-in – governance role
Change requires authority and a degree of neutrality: individual firms cannot do it alone; Lloyd’s and the Associations will lead
Commitment to co-operate essential, on design and implementation
Network effects: a convoy for implementation
Cost / benefit case is rarely convincing on its own.
FSA
Transparency
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Accounting & Settlement
Detailed business design published in December Live issues
Xchanging costs (£10.4mn) being reviewed Technical and data information: Nearing Completion Accounting splits: Nearing Resolution Migration (legacy and crossover): complete for premium,
claims Testing – first convoy on behalf of market; subsequent convoys MRIB and Project Board working on implementation timetable
- Had aimed to publish in Q1, will be Q2 - greater certainty required on costs
- Sequence and timetable for deliveries
- Convoy one membership
Commercial framework
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Electronic Claims File
XIS development work Phase 1 - Operational in February Phase 2 - Delivered, MAT till 08/04/05 Overall business process requirements - Agreed Overall business process spec being reviewed (target 22/04/05) DRI design underway
Implementation 4 Partnerships operational 25 potential partnerships identified
Governance Claims project board
- Target of 10% of new Lloyd’s claims by end 2005
- Named brokers commit to deliver100% new claims from Q3 2006
- Named Managing Agents commit to use ECF for new claims from Q3 2006 Programme office
Supporting control structures – risk and issue logs Monitoring implementation partnerships
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Contract certainty: overview
Governance Market Reform Group (MRG) with new members Market Reform Group executive (= Project Board) BPR/LMP drive – plan to MRG by April
LMP slips – compliance and development Policy checking by Xchanging - publish checks, drive
compliance Binders – model wordings
Slip “fully claused” XIS checks and data – top five reasons
Contract Certainty Implementation Group Get wordings agreed during bind Get checking done during bind
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Contract certainty: LMP Slips
February BSA headline 91%
Continue to check 25% of Lloyd’s slips in 2005; and IUA company slips
LMP slip a year on – publish once agreed, April
League tables will be published from April
LMP slips for binders (Lineslips to follow)
- Checked 30 in February; BSA 93% compliance
- Still high XIS rejection rate – although premiums and claims can now flow
ACORD GPD published
- Marine and reinsurance sub group formed and meetings held
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Contract certainty: Documentation
Contract Certainty initial implementation underway
These will initially involve 8 brokers, approximately 15 insurers of 300 risks in Q1-Q2 2005 across 8 classes
Financial Institutions, Directors and Officer Liability, Treaty Reinsurance (Marine and Non-Marine), Marine, Professional Indemnity, Aviation, Property Facultative Reinsurance
Associated Implementation guide and Policy guidelines published on LMP Website
Performance monitoring (of timelines and quality) is to be done at the same time
The intention is to learn lessons and to rapidly move to wider rollouts
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Contract Certainty: Documentation
A draft rollout plan, showing how it is intended to increase volumes during 2005-6, is shortly to be reviewed by the MRG
This will then be developed to agree targets with individual organisations.
Work continues between Lloyd’s/XIS to review and codify the policy checks performed
Paper regarding approach t o be taken to legacy policies shortly to be reviewed by MRG
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Communication
Newsletter
FAQ
Market Reform Forum
Monthly update
Specialist sessions
Websites
LMP, market associations
Press
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Market Reform Forum
Update on business reform
31 March 2005
James Willison
LMP