QBE is asking brokers to prepare January 2020 renewal information in October or November using the mandatory MRC v1.5 template.
Line slips are an efficient mechanism for receiving and underwriting risks in the Lloyd’s market, but poorly constructed slips have a detrimental effect on data capture quality, underwriting controls and results. The provision of risk details [bordereaux] should be shown under the Line Slip Administration heading within the Subscription Agreement section of the contract.
Action to improve the quality of line slips is part of the ongoing drive to raise standards in the London market. The move also comes at a time of changing market conditions in London. Lloyd’s and individual insurers are steadfast in their drive to increase underwriting discipline and generally improve underwriting results.
Lloyd’s Thematic Review of line slips in September 2018 found the current MRC v1.5 standards and guidance are often not being adopted in practice, and that old versions of the MRC Template were still common place. The MRC Guide and Template has the support of The London Market Group, which includes the LMBC and the market’s underwriting bodies.
The Review identified a number of areas where action is required, in particular around the reporting of risk information, excessive delegation and the clarity of clauses (such as the territorial scope of cover). The Review also called on managing agents to develop and implement procedures for the oversight and management of line slip agreements, and to ensure that at renewal of existing business the new version of the MRC Template is adopted.
All Lloyd’s line slips should comply with MRC v1.5 guidance, with progress being reviewed at regular engagement meetings between Lloyd’s and Managing Agents. Where any line slip agreement does not conform to requirements, the Managing Agent will need to discuss this with Lloyd’s Customer Standards Oversight team in advance of writing the business in 2020.
As we approach the busiest time of the insurance calendar, brokers are more likely to gain the support of underwriters if they prepare for renewals early. We’re asking brokers to prepare January 2020 renewal information in October or November using the mandatory MRC v1.5 template. This should avoid a late rush in December, leaving plenty of time to sort out any potential issues. We are looking forward to working with our broker partners on this important drive to raise standards in the subscription market.
We’re pleased to announce that we have made a lot of progress when reflecting on the 1 January renewal season. Many thanks to brokers who have worked with us over recent months. All line slips that QBE Leads are now on the MRC v1.5 template. When we Lead, we have taken care to ensure that the interests of follow markets have been considered and protected. We have ensured that there are constraints around the extent of delegation and changes that can be agreed without the agreement of the Follow market.
There remains work to be done in respect of bordereau though. Under the Line Slip Administration section, the broker is to ensure that risk details are forwarded to all participating insurers promptly and on a regular basis. This remains the slowest area to improve with some brokers reluctant to produce bordereau. This has implications for insurers who need to record risk details on their systems for Solvency 2 return purposes. We’re almost there and this is the last barrier in a data driven world.