Market Reform Forum

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Market Reform Forum
Update 24 February 2005
Andy Brookes
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Objective up to speed in half an hour

• Overall approach, end vision
• Contract Certainty
• LMP slips
• Documentation, early implementations
• Kinnect
• Electronic infrastructure
• Accounting and Settlement
• Electronic Claims Files todays special topic

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Vision for market processes

• Exchange of data and progress of transaction is
  captured in a collaborative electronic system
• Placing process built into electronic system
• Placing data to international standards
• Standard slip generated by electronic system.
  Ditto, the policy. slip/policy distinction blurs
  
• Policy based on standard wordings changes
  tracked and audited electronically. Or auditable
  bespoke wording created.
• Checking in real time
• Placing systems retain the data and audit trail
• Claims international standard messages for data
  and claims management. Repositories for
  simultaneous access
• Accounting and settlement ditto

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Approach

• To support each stage in the life cycle of a
  contract
• simplified, harmonised business process
• standardised data
• structured electronic messages
• community infrastructure platforms - minimise
  interfacing costs and enforce discipline
• Why?
• Drive changes including behaviour - within
  firms. Hence
• - reduce risk
• - reduce cost
• - make process transparent to market users so
  that they can

measure and manage
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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 (old) rejection rates top
  five reasons
• Contract Certainty Implementation Group
• Get wordings agreed during bind
• Get checking done during bind
• Kinnect
• Consistent with all this but reduces compliance
  cost
• Other Market Wordings Database attributes of CC
  - measurement

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Contract certainty LMP Slips

• January BSA headline (another sneak preview) 93
• Continue to check 25 of Lloyds slips in 2005
  IUA?
• LMP slip a year on publish once agreed, March?
  (not Feb)
• Implementation guide brokers signing-off to be
  published
• Thematic work
• Claims guidance after 2005 Lloyds claims scheme
• FSA headings
• LMP slips for binders
• Checked 75 in January BSA 94 compliance
• Still high XIS rejection rate
• ACORD GPD published
• Marine and reinsurance sub group formed

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Contract certainty documentation

• 300 risks in Q2
• Xchanging check earlier
• Policies produced earlier
• Documentation available
• Brokers lined up underwriters being briefed
• FI or DO first?
• Producing timetable of firms participation
• Legacy information collection priorities (Q2)

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How Kinnect fits into reform

• Reform is about
• Harmonised process
• Structured data (ACORD international standards)
• Embedded in electronic messaging
• Community infrastructure platforms
• Kinnect provides the front office layer - and
  offers high quality data to subsequent processes
  AS, policy production, claims
• LMP slip enforces a structured output of
  placing
• Do it properly through Kinnect
• Checking enforces Lloyds standards (contract
  certainty, regulatory, tax but post placing)
• Do it during placing through Kinnect

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Kinnect

• Continuous use by Marsh and Willis over renewal
  season, passing risks to markets
• Slip sponsored by Marsh and Willis to increase
  carrier use
• Hiscox live and Liberty Syndicates in
  implementation (8 MAs)
• 1 June 2005 move to next stage of use full
  submission process with brokers recording
  underwriter responses
• Release in April (demo then properly live in
  May)
• Includes terrorism
• Customers developing adoption plans ( usage for
  real)
• Sep 2005 endorsement functionality roll out
• New risk classes
• Terrorism available 1 June
• International property available 1 November
• Further roll out sequence decided Q2 (earlier)

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Accounting Settlement

• Detailed business design published in December
• Live issues
• Xchanging costs (10.4mn) being reviewed
• Technical and data information
• Accounting splits
• Migration (legacy and crossover) complete for
  premium
• 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