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Update on Market Reform Andy Brookes, Ben Sayles, Paul Tuvey Market Reform Forum 29 June 2006.

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Presentation on theme: "Update on Market Reform Andy Brookes, Ben Sayles, Paul Tuvey Market Reform Forum 29 June 2006."— Presentation transcript:

1 Update on Market Reform Andy Brookes, Ben Sayles, Paul Tuvey Market Reform Forum 29 June 2006

2 Market Reform Page 1 Market Reform Update Contract Certainty Contract Documentation Processes Back office electronic infrastructure –Accounting and Settlement – design work –Repository for claims and A&S – todays special topic www.marketreform.co.uk

3 Market Reform Page 2 Contract Certainty – The headlines Market on target to achieve 2006 milestones. Currently ahead of schedule Guidance mostly complete. Just subjectivities to come in 2006 FSA mid year review complete –See FSA website for write-up –FSA issues: Quality of data; exceptions; legacy policies; 2007 –Expect a CEO letter from Dane Douetil

4 Market Reform Page 3 Key observations on the data The overall score for Contract certainty includes, on time and complete before inception, incomplete placements and late placements. The overall score continues to improve. Summary Brokers score for open market April returns, reported in June was 81% certain, up from 78% for March. Brokers score for certificates of insurance April returns, reported in June was 89% certain, up from 82% for March. Overall, the volume of contracts that were certain in April increased to 84%, from 80% in March. The volume increase for broker contracts between March and April was 15%, from 28,471 in March to 32,858 in April. Broker Contract certainty Returns for April 2006

5 Market Reform Page 4 Open market: 81% certain, up from 78% for March Certificates of insurance: 89% certain, up from 82% Overall: 84%, from 80% in March Broker Contract Certainty Returns for April 2006

6 Market Reform Page 5 Broker Contract certainty Returns for April 2006 The overall score continues to improve

7 Market Reform Page 6 Broker Contract certainty Returns for April 2006 Evidence of Cover

8 Market Reform Page 7 Status update - Publications Contract Certainty Page 7 Subjectivities –Guidance currently in preparation, to include a poor subjectivity example with explanatory guidance to work through it, and a good subjectivity –Should be published this week Model Signing Provisions –Published, 27 April Exceptions –Published, 3 May Market Reform Slip – Published, 8 June Slip audit consultation –Published, 8 May

9 Market Reform Page 8 Legacy Guidance –Code of Practice: should be Board endorsed –Published, 15/05/06 –Requirement: Each firm to advise MRPO of primary contact (e-mail to: legacy@marketreform.co.uk) –Market Awareness session(s) and FAQs to follow What you should do? –Establish your baseline position –Broker contact clients, as appropriate –Lead/broker agreement of yes/no for each risk –Produce legacy policies only where necessary –Keep records, and hit your own targets www.marketreform.co.uk

10 Market Reform Page 9 Richard Ward letter on 22 May - contract documentation Publish a simple set of checks to be completed before the contract is entered into. These will be a rationalised set of checks based on those in the existing QA tool Allow each managing agent to perform the checks themselves or to place reliance on a leader or a suitable service provider Facilitate immediate use of the contract; at minimum to produce and issue a client copy within 30 days Allow managing agents and brokers to agree on branding of the client copy, provided it includes agreed Lloyds branding. Validation by Franchisor – all pilot risks submitted

11 Market Reform Page 10 Accounting and Settlement Measurement and checks –Benchmark data – late but pressing on –Accounting procedure checks published April on MRPO website –Tax checks: should have been end May 06; now July Strategy –Detailed documentation in progress – mid-August publication –Franchisor reporting – end-September www.marketreform.co.uk

12 Market Reform Page 11 Claims Infrastructure On track for software delivery to allow electronic claims processing in the Lloyds market using ACORD DRI standards. Live in mid-Sept To support this: –Substantial Market Acceptance Testing and implementation in May - Sept –MAT started, 15/05/06 - 5 brokers and 14 Managing Agents involved –Draft Systems Processes and Procedures Manual published, see website –Contractual framework – late but coming soon –Early implementation partnerships: 64 and rising rapidly www.marketreform.co.uk

13 Market Reform Page 12 ECF MAT Phase 5 - Update MAT of ECF started at 9am 15th May on schedule Run by MRPO on behalf of the Market with support from Xchanging 3 month duration with full DRI functionality being tested from 19th June Integrated with A&S repository testing System due live week ending 15th September 2006

14 Market Reform Page 13 ECF MAT Phase 5 - Update Participants –Brokers: Benfield, Guy Carpenter, Marsh, Miller and Willis –Managing Agents: Ace, Advent, Amlin, Beazley, Danish Re, Faraday, Heritage, Hiscox, Limit, Markel, Marlborough, St Paul Travelers, SVB and Wellington. –XCS, XIS (support of development / testing) Regular progress reports and live issue updates available on the MRPO website throughout MAT (www.marketreform.co.uk)www.marketreform.co.uk To date progressing well and to schedule

15 Market Reform Page 14 Claims Infrastructure – other issues Claims infrastructure strategy: Planning for proposal in August/September Pricing of repository services IUA companies now actively participating in pilots –Expected start date, 01/06/06 www.marketreform.co.uk

16 Market Reform Page 15 Your actions Your business sponsor and project manager Regular meetings of sponsors and PMs Early partnerships If not in MAT, when will you use it? Training of claims staff –CII planning to advertise in August for September courses

17 Market Reform Page 16 Lloyds Schematron (1) Developed by Tri-Systems InfoBahn Ltd, for Lloyds –Press release, 15/05/06 Requirement –Provide intra-message, standardised validation for ACORD-standard XML messaging –Firms plug in to their respective systems for outward and inward message validation Availability –Beta version available for download from MRPO website, end of May 06 –DRI to start with; poised to do other ACORD messages when specified www.marketreform.co.uk

18 Market Reform Page 17 Lloyds Schematron (2) Benefits: –Consistent validation –Save market firms writing their own individual validation –Speed implementation and ease future change –Common approach will provide consistent system quality –Easier for external firms to communicate with London –Free to market participants www.marketreform.co.uk

19 Andy Brookes, Ben Sayles, Paul Tuvey Market Reform Forum 29 June 2006


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