Single Claims Agreement Party - SCAP Simon Cooper

Single Claims Agreement Party Allows the London slip lead to agree claims for all slip participants subscribing to SCAP wherever they are Applicable to all classes but not Binders Proportional Reinsurance

Single Claims Agreement Party Inter-Underwriter agreement – LMA9150 Joint Initiative between Corporation of Lloyd’s, LMA, IUA and LIIBA Allows Claims to be agreed by a single London Market underwriter on behalf of participating underwriters contracting on the same slip and on the same terms. Participation is voluntary at the time of contracting Governing Law

SCAP Leader Lloyd’s or London Market Company underwriter: For the purposes of these Arrangements the SLIP LEADER must be: (a) an authorised person (as defined in Section 31 of the Financial Services and Markets Act 2000) with permission to effect and/or carry out contracts of insurance; or (b) a Member of Lloyd’s. Overseas companies may not be SCAP leader but can be SCAP followers

Claims Outside SCAP Claims in excess of £250,000 – the Threshold Amount Complex or Controversial claims Claims subject to Dispute Resolution Proceedings Other factors

The Threshold Amount When is value assessed? What is valued? Application of Exchange rates Reassignment

Example of Application JOPLIN SYNDICATE Lead £1m xs £1m HOLDING COMPANY (UK) 500k xs 500k BIG BROTHER (US) 250k xs 250k

Loss £1.2m £200k Loss SCAP applies £500k Loss SCAP does not apply Threshold exceeded £250k Loss Overseas lead Deductible £250k £1.2m

Circumstances which may give rise to a Claim Flexible approach Initial notification Subsequent reports

Complex Claims Allegations of fraud or breach of duty to make a fair presentation Allegations of criminal behaviour Allegations of regulatory breach Serious injuries, fatalities and periodic payments Clash cover Claims for punitive damages or under 13A IA15

Other Factors Multi section slips Multiple slip policies Lineslips Some verticalised placements

Verticalisation MRC Signing 2 Signing 1 SCAP lead Signing 7 o/s FDO Signing 6

Role of the Leader Decide if claim within SCAP Act in good faith and best interests of SCAP followers Comply with sanctions and other regulatory requirements Retain documents for 7 years May delegate No liability to non-SCAP parties

Excluded Settlements Excluded settlements Ex Gratia Commutation

Disputes Informal discussion Mediation Arbitration Limited liability - £500,000 in aggregate any one SCAP claim

Role of Broker Initial notification to Leader Advising SCAP followers during claims process Provide Lead with details of following SCAP market

Termination of SCAP Criteria no longer met Threshold Amount Dispute resolution Nature of the claim Broker decision Insolvency Authorisation for relevant class of business withdrawn Authorisation by Lloyd’s withdrawn

SIMON.COOPER@INCELAW.COM