1 Hull Claims Protocol 2007 Update

2 Objective To establish a set of guidelines to promote the efficient handling of hull claims

3 Challenges  Establish a ‘code of practice’  ‘No one has to follow the guidelines but everybody does’  Acceptance of claims leader concept

4 Hull Claims Protocol – IMCC 2006  Authority of Claims Leader  Responsibilities of Claims Leader  Provision of claims information  Establishing and maintaining reserves for claims and claims expenses  Agreeing settlements  Pursuing recoveries  Financials ?

5 Issues  Agreement to adopt  Leaders’ expertise, experience and resources  Integration with existing market practices / systems  Impact of regulations

6 The Next Step - Consultation  France  Germany  Italy  London  Scandinavia  USA

7 Areas canvassed  General reaction to concept  Potential problems implementing Protocol due to local regulations  Potential for irreconcilable conflict with local claims handling procedures  Conflict with local laws  Comments on wording  Support for implementation

8 France  Leading Companies in favour of concept – “…a good practical way to improve the international co- insurance claims processes which would benefit assureds.”  Provisions requiring broker involvement in relation to liaison with co-insurers should be included  Should be a separate agreement not in policy  No foreseeable problems with implementation ?

9 Germany  Positive reaction to Protocol  No conflict foreseen with local regulation or laws but general practice is for followers to be bound by Leader’s decisions  Timeframes for reporting may be idealistic

10 Italy  Generally positive reaction  Concerns re lack of information re followers and role of brokers in communicating with followers  Concerns re tight reporting timeframes

11 London  Supportive of concept but in current form not workable in London Market context  Identified problems of compliance with London Market claims schemes, FSA & Sarbanes-Oxley requirements  Consider that greater burden placed on brokers  Need to define role of Leader in London context  Should include provisions relating to involvement of Surveyors and Average Adjusters

12 Scandinavia  Norway & Sweden – Positive reaction, no particular concerns re implementation  Denmark – Reasonably positive without being enthusiastic, some concerns re prior approval of EU Law Commission

13 USA  Mixed response  Concern - broker co-operation  Concern - moving broker responsibilities to Leader  Concern - resources of Leaders

14 Comments on wording  Revise introduction to set out objectives along lines of Lillehammer Protocol  Include provision for counter-security where Leader issues 100% LOU to third parties  London Market – closely define role of Leader  Other comments clause specific ?

15 Lillehammer Protocol – Introduction This Claims Protocol has been established to assist in the efficient handling of claims or potential claims which arise under insurance policies issued by Insurers underwriting the class of business often referred to as offshore energy risks. It has been formulated after consultation with Insureds and Insurers of such risks and is intended to be for their mutual benefit. The parties to such policies may choose to adopt this Claims Protocol but in no case shall the provisions of this document form part of any policy. This Claims Protocol does not apply to stand alone liability/casualty insurance policies. While this document includes certain target times it is recognised by the parties that as claims are various in type and complexity these timings represent reasonable expectations applicable to a majority of cases. While actions may be undertaken within lesser or greater periods than the stated target times, the parties will always endeavour to work efficiently and in the spirit of cooperation that underlies this Claims Protocol. Further it is recognised that in certain national, federal or local jurisdictions specific requirements concerning response times or other action times may be imposed on Insurers and, where applicable, Insurers will comply with any such legal obligations, irrespective of any of the provisions of this Claims Protocol. This Claims Protocol shall not relieve any party of any legal obligations existing in the absence of this document and nothing contained in this Claims Protocol shall take precedence over any provisions of any policy issued by a party who has chosen to adopt this Claims Protocol. In no case shall this Claims Protocol operate to increase the liability of Insurers beyond that provided for in the policy. ?

16 Clause 2(b) All claims shall be notified to the Claims Leader by the Assured or their Broker. The Claims Leader shall be responsible for: (b) Ensuring that the Following Underwriters are advised of all claims notified under the insurance within 10 days of notification to them. ?

17 Clause 2(d) All claims shall be notified to the Claims Leader by the Assured or their Broker. The Claims Leader shall be responsible for: (b) Ensuring that the Following Underwriters are provided with updated information regarding the claim, including revised reserves for the claim and claim expenses: (i) within 30 days of the initial notification to the Following Underwriters, (ii) whenever there is a significant development, but (iii) at least every six months. ?

18 Clause 2(e) All claims shall be notified to the Claims Leader by the Assured or their Broker. The Claims Leader shall be responsible for: (e) Agreeing interim and final claim settlements within the conditions of the insurance and advising such settlements to the Following Underwriters. However, in no event will the Claims Leader be responsible for the settlement of any claim on behalf of the Following Underwriters. Substitution: “recommending” ?

19 Clause 2(f) All claims shall be notified to the Claims Leader by the Assured or their Broker. The Claims Leader shall be responsible for: DELETE? (f) Negotiating and recommending compromised or commercial settlements and submitting same for the consideration of the Following Underwriters. However, for the avoidance of doubt, in no event shall any agreement to compromise any claim be binding on Following Underwriters. OR AMEND? (f) Negotiating and recommending ex-gratia settlements and submitting same for the consideration of the Following Underwriters. However, for the avoidance of doubt, in no event shall any agreement to compromise any claim be binding on Following Underwriters. ?

20 Clause 4 The Claims Leader shall exercise discretion in the circulation of the reports of surveyors or other experts. In particular, the Claims Leader shall be under no obligation to provide reports of surveyors to Following Underwriters unless the 100% gross claim is expected to exceed €500,000. Or: €1,000,000 or €2,000,000? ?

21 So – what is the next step? ?

22 Hull Claims Protocol 2007 Update