The LMP Lineslip

June 2005
 The LMP Lineslip

Table of Contents

1. Introduction 3
2. When are Lineslips used? 3
3. The Franchise Board Mandate 3
4. Enforcing & Monitoring Mandate 4
5. Variation to the LMP Lineslip 4
6. Structure of the LMP Lineslip 4
7. Declarations 6
Appendix A: LMP Lineslip Structure and Example 7
Appendix B: FSA Client Classification definitions 21
Appendix C: Expert Fee Collection 22
Appendix D: Hold Cover Provisions 23

Page 2 of 23
 The LMP Lineslip

1. Introduction
The LMP slip was introduced in October 2001 and was mandated by the Lloyd’s
Franchise Board for open-market business incepting from the 2nd January 2004 (for
reference see the LMP Slip (April 2005) at www.lmp-reforms.com/Publications). At
this time Lineslips were exempt from the mandate as a consistent format did not
exist upon which to apply the London Market Principles. The work to develop a
standard format for Lineslips has now been completed with the production of the
LMP Lineslip. These guidelines contain details of the structure of the LMP Lineslip,
details of the Lloyd’s mandate and provide an example of what a compliant Lineslip
might look like. The LMP Lineslip has been agreed for use with Bulking and Non-
Bulking Lineslips. This document has been agreed and is supported by Lloyd’s,
LMA, IUA and the LMBC.

2. When are Lineslips used?

Lineslips are used by brokers to access a group of insurers who wish to delegate their
authority to enter into contracts of insurance to another insurer in respect of business
introduced by a broker named in the agreement1.

3. The Franchise Board Mandate

The following part of the Franchise Board Mandate applies to Open Market Slips
including Declarations and Offslips:

The Franchise Board has prescribed the following standards and arrangements for
the conduct and administration of insurance business at Lloyd’s, the authority to
enforce compliance being exclusively vested in the Franchise Board –

(a) as from 28 October 2004, a managing agent shall not permit the
syndicate stamp of a syndicate managed by it to be affixed to any slip
which relates to a contract or contracts of insurance unless –

(i) the slip is in the format of an LMP slip from time to time issued by
the LMP Programme Office and the information contained in the
slip has been properly completed in accordance with the relevant
LMP standards;

(ii) the slip is marked “LMP Exempt – Client Requirement”, or

(iii) the slip relates to motor business, personal lines business or term
life insurance business and the slip will not be processed by
LPSO Limited;

The following part of the Franchise Board Mandate applies to Lineslips and Binding
Authorities:

(b) as from 28 October 2004, a managing agent shall not permit the syndicate
stamp of a syndicate managed by it to be affixed to any slip which relates to a
binding authority2 in respect of the 2005 or later year of account unless the

1
Where a Lloyd’s syndicate participates on the lineslip, the business must be introduced by a named
Lloyd’s broker.
2
Separate guidelines exist for Binding Authority slip completion, please see
www.lmp-reforms.com/Publications

Page 3 of 23
 The LMP Lineslip

slip has been completed in accordance with the relevant LMP slip guidelines
from time to time issued by the LMP Programme Office.

(c) as from 1st October 2005, a managing agent shall not permit the syndicate
stamp of a syndicate managed by it to be affixed to any slip which relates to a
Lineslip unless the slip has been completed in accordance with the relevant
LMP Lineslip guidelines from time to time issued by the LMP Programme
Office.

N.B. As a clarification of the above this means that:

a) Binding Authorities and Lineslips cannot be marked as “Client

Exempt”; and
b) Declarations and Offslips can only be marked as “Client Exempt” if
required by the client.

4. Enforcing & monitoring the mandate

The LMP Programme Office, in co-operation with the LMBC, the IUA and the LMA,
is in continuous dialogue with firms about improving quality, with the aim of providing
education and guidance to improve market standards.

Individual feedback sessions are being held between the Lloyd’s slip audit team and
managing agents and brokers. Reports specific to the managing agent or broker are
prepared for each feedback session, highlighting the common errors on open
market slips, binding authority slips and Lineslips with details given on how to
improve slip quality and appropriate remedial actions. To arrange an individual
feedback session for your organisation please contact
James.willison@lmpoffice.com.

On-site slip checking at the respective managing agents is also being carried out by
the audit team to provide quality feedback and on-site training sessions.

5. Variation to the LMP Lineslip

The following are valid variations to the LMP Lineslip as incorporated into this
document.

• The order of slip headings in the CONTRACT DETAILS is not fixed although it is
likely that future standardisation will seek to do so.
• There will be contract specific slip headings that will need to be incorporated into
the LMP Lineslip to allow for any unusual or additional CONTRACT DETAILS as
deemed necessary.

6. Structure of the LMP Lineslip

All LMP Lineslips are required to apply the following rules:

• A UMR (Unique Market Reference) in the correct format:

(i) All UMRs must start “B” which must be followed by the Lloyd’s broker
number. If the broker number is three digits long it should be prefixed by a
zero. If the broker number is “123” your UMR would therefore start
“B0123”. If the broker has a four digit broker number such as “4567” it
would be “B4567”.
(ii) After the broker number up to 12 alphanumeric characters must be
provided. There is no prescribed standard for this, although most brokers
tend to use their policy number.

Page 4 of 23
 The LMP Lineslip

(iii) The UMR as a whole must be unique. This means that when a contract is
renewed it cannot keep the same UMR.
(iv) The UMR must not contain any spaces, hyphens, slashes or other
punctuation. Only numbers 0-9 and letters A-Z may be used.
(v) The UMR is not case sensitive. Whether it is provided as upper case or
lower case, many of the systems and current EDI messages used in the
market will convert it to upper case.
(vi) In respect of mid term market changes, where the handling broker
changes, the new broker must keep and use the old broker’s UMR. When
the contract renews the handling broker can amend the UMR.
• Four separate sections called Contract Details, Subscription Agreement,
Information and Fiscal and Regulatory. The inclusion of the Contract Details
heading in the Lineslip is optional but the other three must be included.
• Standard headings for the Contract Details, Subscription Agreement, Fiscal and
Regulatory and Information sections. The Subscription Agreement section
headings must not be changed, deleted, reordered or added to in any way.
Furthermore the Subscription agreement section must not include any additional
headings.
• All monetary amounts shown as three letter ISO Currency codes rather than
symbols e.g. USD rather than “$”. However where policy forms include such
symbols the slip must reflect the policy.
• A LMP Lineslip must not include any terms which are unspecific or create
ambiguities, for example Broker small print and any TBA’s (To Be Agreed /
Advised) that do not indicate the appropriate action to be taken by whom and by
a specific date. However if declarations are likely to differ greatly from each
other and therefore terms cannot easily be specified on the Lineslip it is
permissible to put words similar to “to be agreed each and every insurance
bound”.
• Any stamp conditions applied by underwriters must not use acronyms or
abbreviations but rather state the condition in full, for example “SNKORL” should
be stated “Subject to No Known or Reported Losses at …….”.
• Underwriters who incorporate stamp conditions as standard must ensure they
are relevant to each risk they write. If the condition is not relevant it must be
removed. For example stamp conditions relating to Letters of Credit must be
removed if the contract in question does not incorporate any Letters of Credit.
• Standard slip provisions must be relevant to the risk or the administration of that
risk.
• Underwriters must not delete the Subscription Agreement section of the slip or
write stamp conditions that specify “No Subscription Agreement” or “Ex
Subscription Agreement” or similar. If there are particular provisions
underwriters do not wish to apply to them, these can be explicitly stated against
the relevant Subscription Agreement heading or specified as stamp conditions.
• The General Underwriters Agreement (GUA) must not be used on lineslips.
• Where a non-registered/ non-standard wording is agreed in the lineslip a copy of
the agreed wording must be submitted to Xchanging Ins-sure Services with
each insurance bound.

Page 5 of 23
 The LMP Lineslip

7. Declarations
Declarations placed using “off-slips” must follow the LMP Slip guidelines for open
market (refer to www.lmp-reforms.com/Publications). In addition:
• The General Underwriters Agreement does not apply to declarations.
Endorsements should be agreed by the same agreement parties that agreed
the declaration. Where an endorsement makes a change that, in the opinion of
the agreement parties, may impact all insurers the agreement parties should
refer the endorsement to all insurers. For example an endorsement may add an
additional class of business which some underwriters may not be able to or
wish to underwrite.
• The UMR and Lloyd’s Signing number and date for the Lineslip must be shown
clearly on the Declarations.
• Each declaration must have a separate UMR.
• Where a declaration contains open market lines the additional subscribing
insurers should review the Subscription Agreement of the declaration to ensure
they are happy with the provisions contained therein and update as necessary.
• All declarations with one or more subscribing Lloyd’s underwriter(s) must be
submitted to XIS for stage 2 signing. Non bulking declarations with one or more
subscribing Lloyd’s underwriters must also be submitted to XIS for Stage 1
checking.

Page 6 of 23
 The LMP Lineslip
Appendix A: LMP Lineslip Structure and Example

CONTRACT DETAILS

SLIP STRUCTURE SLIP EXAMPLE

TYPE: The type of lineslip, either Bulking or Non- TYPE: Non-Bulking Lineslip/ Bulking Lineslip*
Bulking. (* Delete as applicable).

FORM FOR EACH The NMA reference or other identification FORM FOR EACH As agreed by the agreement parties for each
INSURANCE of the policy jacket. Where this is the same INSURANCE insurance bound.
BOUND: on each insurance bound it can be BOUND:
specified here. Where it is likely to vary by
declaration “As agreed by the agreement
parties for each insurance bound” should
be stated.

UMR: The Unique Market Reference allocated to UMR: B0123ABC1234

the lineslip by the broker.

LINESLIP The lineslip reference used by the broker LINESLIP DEF1

REFERENCE: to identify the lineslip. This can be a REFERENCE:
number or a name. If this is the same as
the UMR then this heading may be
omitted.

BROKER: The name and address of the broker BROKER: XYZ Broker Ltd
responsible for placing the lineslip and 123 Wickley Road
administering the lineslip. Where the London
lineslip may be used by other brokers this L20 1MP
should be specified.

Page 7 of 23
 The LMP Lineslip
SLIP STRUCTURE SLIP EXAMPLE

The authorised classes of business and Commercial Property

AUTHORISED AUTHORISED
coverages that may be covered under the
CLASSES OF CLASSES OF
lineslip.
BUSINESS AND BUSINESS AND
COVERAGES: COVERAGES:

Any exclusions that apply to the classes of Excluding terrorism perils.

EXCLUSIONS EXCLUSIONS
business and coverages specified in the
WITHIN THE WITHIN THE
previous heading.
AUTHORISED AUTHORISED
CLASSES OF CLASSES OF
BUSINESS AND BUSINESS AND
COVERAGES: COVERAGES:

PERIOD: The Period of the lineslip. This should be PERIOD: Risks attaching during the period:
specified on a “risks attaching basis” and From: 1st June 2005
must include the inception date and time To: 31st May 2006
of day, expiry date and time of day and Both days inclusive Greenwich Mean Time.
the time zone. As an alternative to
specifying the time of day it is acceptable
to specify both days inclusive, although
the time zone is still required.
Lineslips should be for no more than 12
months from inception. However, subject
to the agreement of the agreement parties
specified under “Basis of Agreement to
Lineslip changes”, it is possible to extend
the period of the lineslip, but in no event
should it exceed 18 months from
inception.
For lineslips where specific dates of
inception or expiry are not known, for
example voyages, constructions and
sporting events, the specific events
dictating the period must be stated.

Page 8 of 23
 The LMP Lineslip
SLIP STRUCTURE SLIP EXAMPLE

EXTENSIONS OF The extent and duration of any extensions EXTENSIONS OF This lineslip may be extended for a period of
PERIOD OF to the period of the lineslip that may be PERIOD OF up to XX months subject to the agreement of
LINESLIP: given and who needs to agree such LINESLIP: the agreement parties specified under Basis
extensions. The agreement parties for Of Agreement To Lineslip Changes.
such extensions in period are to be shown
under the “Basis Of Agreement To Lineslip
Changes” heading in the Subscription
Agreement section.

MAXIMUM PERIOD The maximum duration of any insurance MAXIMUM PERIOD

OF EACH bound under the lineslip including any
INSURANCE provisions for odd time and extensions.
BOUND: The agreement parties for such extensions
must be shown under the “Agreement
Parties for Each Insurance Bound” heading
in the Subscription Agreement section.
No insurance shall be bound for a period
OF EACH
greater than XX months plus odd time, not
INSURANCE
exceeding XX months in all plus any
BOUND:
extensions as may be agreed by the
agreement parties for each insurance bound.

MAXIMUM LIMITS The maximum limits of Liability/Sums MAXIMUM LIMITS Maximum GBP XX,XXX,XXX each and every
OF LIABILITY/ Insured for each insurance bound. OF LIABILITY/ loss any insurance bound.
SUMS INSURED SUMS INSURED
FOR EACH FOR EACH
INSURANCE INSURANCE
BOUND: BOUND:

MAXIMUM The maximum limits of Liability/Sums MAXIMUM Maximum GBP XX,XXX,XXX

AGGREGATE Insure for the Lineslip. AGGREGATE
LIMITS OF LIMITS OF
LIABILITY/SUMS LIABILITY/SUMS
INSURED FOR THE INSURED FOR THE
LINESLIP LINESLIP

TERRITORIES The country of domicile of the insureds that TERRITORIES Anywhere in the world.
FROM WHICH may be bound. FROM WHICH
EACH INSURANCE EACH INSURANCE
MAY BE BOUND: MAY BE BOUND:

Page 9 of 23
 The LMP Lineslip
SLIP STRUCTURE SLIP EXAMPLE

TERRITORIAL The territories and geographical limits of TERRITIORIAL Anywhere in the world.
LIMITS OF EACH each insurance bound. LIMITS OF EACH
INSURANCE INSURANCE
BOUND: BOUND:

CONDITIONS OF Identification, qualification or variation in CONDITIONS OF (Operative clauses to be specified here)

EACH INSURANCE perils including the wording, clauses, EACH INSURANCE And as may be agreed by the agreement
BOUND: conditions and amendments to any BOUND: parties for each insurance bound.
clauses in basic form including any
applicable territorial wordings. All standard
wordings and clauses must be clearly
identified by name and reference. Any non-
standard wording or clauses must be
referred to here and attached to the
lineslip.

EXPRESS Any express warranties that apply to each EXPRESS (To be inserted if any).
WARRANTIES OF insurance bound, over and above any that WARRANTIES OF
EACH INSURANCE may be incorporated in the Policy Form or EACH INSURANCE
BOUND: implied warranties from legislation such as BOUND:
the Marine Insurance Act 1906, including
the consequences of non-compliance. If
there are no express warranties this
heading would not be included.

CONDITIONS Any conditions precedent that apply to CONDITIONS (To be inserted if any).
PRECEDENT OF each insurance bound, over and above PRECEDENT OF
EACH INSURANCE any that may be incorporated in the Policy EACH INSURANCE
BOUND: Form or legislation, including the BOUND:
consequences of non-compliance. If there
is no conditions precedent this heading
would not be included.

Page 10 of 23
 The LMP Lineslip
SLIP STRUCTURE SLIP EXAMPLE

SEVERAL The several liability notice that applies to
LIABILITY: the lineslip. This should be either the
Insurance or Reinsurance version of
LSW1001, and should be included in full.
The example shown here is the Insurance
version of the notice.
SEVERAL The subscribing insurers’ obligations under
LIABILITY: contracts of insurance to which they subscribe
are several and not joint and are limited solely
to the extent of their individual subscriptions.
The subscribing insurers’ are not responsible
for the subscription of any co-subscribing
insurer who for any reason does not satisfy all
or parts of its obligations.

CHOICE OF LAW & The court that will have jurisdiction in the CHOICE OF LAW & This lineslip shall be governed by the laws of
JURISDICTION OF event of a dispute between the broker and JURISDICTION OF England and Wales and subject to the
THE LINESLIP: underwriters over the terms of the lineslip, THE LINESLIP: exclusive jurisdiction of the courts of England
and the law that will apply. and Wales.

CHOICE OF LAW & The court that will have jurisdiction in the CHOICE OF LAW & As agreed by the agreement parties for each
JURISDICTION OF event of a dispute between the Insured JURISDICTION OF insurance bound.
EACH INSURANCE and Underwriters over the terms of the EACH INSURANCE
BOUND: insurance bound, and the law that will BOUND:
apply.

PREMIUM: The basis of any premium calculations that PREMIUM: As agreed by the agreement parties for each
will be used on each insurance bound. insurance bound.

MAXIMUM The maximum aggregate premium income MAXIMUM GBP XX XXX XXX
AGGREGATE limit that the agreement parties may enter AGGREGATE
PREMIUM INCOME into under the lineslip. PREMIUM INCOME
LIMIT: LIMIT:

NOTIFIABLE The broker shall monitor the total gross NOTIFIABLE 75%
PERCENTAGE OF premium income bound and notify the PERCENTAGE OF
THE LIMIT NOT TO underwriters immediately if it becomes THE LIMIT NOT TO
EXCEED: apparent that the total gross premium EXCEED:
income is likely to exceed the percentage
of the limit stated.

Page 11 of 23
 The LMP Lineslip
SLIP STRUCTURE SLIP EXAMPLE

PAYMENT TERMS: Non-Bulking Lineslips Only PAYMENT TERMS: 60 day premium payment condition to be
The Premium Payment Terms applied to applied to each insurance bound– LSW3000.
each insurance bound. Should include OR
Premium Payment Clauses, Warranties and
Conditions. N.B. if there are no payment
terms then this can be left blank.
OR

PREMIUM Bulking Lineslips Only PREMIUM Premium bordereau(x) are to be paid monthly
BORDEREAU(X): This heading only applies to Bulking BORDEREAU(X): to Underwriters within XX days of the end of
Lineslips where bulk premium settlements the applicable bordereau month.
are to be made to Underwriters via a
premium bordereau. This shows the
applicable Payment Terms for settlement of
the premium bordereau(x) to Underwriters
including how often such payments are to
be made, e.g. monthly.

BROKERAGE: The brokerage allowance, or equivalent BROKERAGE: Up to a maximum of XX% of gross premium
details for each insurance bound. If this is for each insurance bound.
paid as a fee rather than a percentage of
the premium this is a private arrangement
between broker and client and the
brokerage must be specified as zero or not
applicable in the slip.

OTHER Any additional deductions from premium OTHER None.

DEDUCTIONS e.g. administration fees, sundry payments.. DEDUCTIONS
FROM PREMIUM: FROM PREMIUM:

Page 12 of 23
 The LMP Lineslip
SLIP STRUCTURE SLIP EXAMPLE

TAX PAYABLE BY Any premium taxes and charges payable TAX PAYABLE BY As agreed by the agreement parties for each
THE INSURED AND by the (re)insured in addition to the THE INSURED AND insurance bound.
ADMINISTERED BY premium stated above, which are collected ADMINISTERED BY
UNDERWRITERS and/or administered by underwriters for UNDERWRITERS
FOR EACH each insurance bound e.g. UK IPT. Any FOR EACH
INSURANCE premium taxes and charges payable by INSURANCE
BOUND: underwriters should be shown in the Fiscal BOUND:
& Regulatory section.

PROFIT Details of any contingent or profit PROFIT None.

COMMISSION: commission that may apply to the lineslip. COMMISSION:

CANCELLATION The number of days notice that CANCELLATION This lineslip is subject to XX days notice of
NOTICE OF THE broker/underwriter must give in order for NOTICE OF THE cancellation from either the Slip Leader or the
LINESLIP: the lineslip to be cancelled. LINESLIP: broker.

RECORDING, Details of procedures for storage of data, RECORDING, Where the broker maintains risk and claim
TRANSMITTING & documents and other information. This TRANSMITTING & data/information/documents the broker may
STORING heading is optional. STORING hold data/information/documents
INFORMATION: INFORMATION: electronically.

Page 13 of 23
 The LMP Lineslip

SUBSCRIPTION AGREEMENT

SLIP STRUCTURE SLIP EXAMPLE

SLIP LEADER OF State who is the Slip Leader for the SLIP LEADER OF ABC Syndicate
THE LINESLIP: lineslip. The Slip Leader for each THE LINESLIP:
insurance bound will be specified in
each declaration. If this is known when
the slip is produced it must be added
by the broker. If it is not known when
the slip is produced the Slip Leader
inserts their name here when they
write their line. It is only possible to
have one Slip Leader for London
(Bureau) Market business; however in
situations where a non-bureau lead
exists on the same slip it is possible to
annotate the right hand side of the slip
with the headings OVERALL SLIP
LEADER and LONDON MARKET
SLIP LEADER. In such cases
subsequent provisions will need to be
specific with regard to any Slip Leader
agreements.

AGREEMENT State those underwriters who will bind AGREEMENT Slip Leader
PARTIES FOR insurances and any alterations thereto PARTIES FOR GHI Company Ltd
EACH INSURANCE on behalf of the subscribing EACH INSURANCE
BOUND AND underwriters and the method by which BOUND AND
ALTERATIONS reporting to followers is undertaken, if ALTERATIONS
THERETO: any. THERETO:

Page 14 of 23
 The LMP Lineslip
SLIP STRUCTURE SLIP EXAMPLE

BASIS OF Specify which underwriters will agree BASIS OF All changes to this lineslip to be agreed by
AGREEMENT changes to the lineslip. N.B. The GUA AGREEMENT (specify Agreement Party(ies) here).
TO LINESLIP must not be used on lineslips. For TO LINESLIP
CHANGES: classes of business where it is market CHANGES:
practice to list a copy of endorsements
to the following market, the
method/media should be specified
here e.g. email, paper or repository.

RULES AND What authority, if any, the underwriters RULES AND (for further information please see appendix
EXTENT OF ANY have delegated to the broker in relation EXTENT OF ANY D)
AUTHORITY to the lineslip including any Hold Cover AUTHORITY
DELEGATED TO provisions. This should show the limit DELEGATED TO
THE BROKER: of the broker’s authority. THE BROKER:

LINESLIP The procedures and arrangements
ADMINISTRATION: agreed between the broker and
underwriters relevant to the ongoing
administration of the lineslip.
LINESLIP In the event of non-renewal or cancellation
ADMINISTRATION: of this lineslip, all declarations shall run to
their natural expiry date (including any
extension of individual Policy periods as
may be agreed by the agreement parties for
each insurance bound), unless cancelled in
accordance with the individual Policy terms
and conditions.

Premiums for all declarations shall be

allocated and paid in to the year of account
in which this lineslip incepts.

CLAIMS Identity of the claims agreement CLAIMS Slip Leader for each insurance bound plus
AGREEMENT parties for each insurance bound e.g. AGREEMENT Xchanging Claims Services.
PARTIES: Slip Leader, plus the first IUA company PARTIES:
and Xchanging Claims Services.

Page 15 of 23
 The LMP Lineslip
SLIP STRUCTURE SLIP EXAMPLE

BASIS OF CLAIMS Specify the basis of the claims BASIS OF CLAIMS Claims to be managed in accordance with
AGREEMENT: procedure(s) such as the Lloyd’s 1999 AGREEMENT: the Lloyd’s 1999 Claims Scheme3 and IUA
claims scheme, IUA claims agreement claims agreement practices.
practices or any other risk specific
arrangements.

CLAIMS All claims related information with the CLAIMS Broker to enter claim advices into CLASS.
ADMINISTRATION: exception of identification of ADMINISTRATION: All company market bureaux
agreement parties and the basis of underwriters(s) to use CLASS for claims
claims agreement should be included agreement.
here.

RULES AND If any of the claims agreement parties RULES AND ABC Syndicate delegates the management
EXTENT OF ANY specified above have delegated their EXTENT OF ANY of all claims under GBP XX,XXX to
OTHER claims processing and agreement to OTHER Xchanging Claims Services.
DELEGATED any other party this should be specified DELEGATED
CLAIMS here including any limits that may CLAIMS
AUTHORITY: apply, e.g. all claims less than GBP AUTHORITY:
XXXX or experts fees GBP XXXX.

It is unlikely that the broker will be

aware of any such arrangements that
underwriters may have, so the
underwriters who are the claims
agreement parties must amend this as
necessary.

3
Please note that the Lloyd’s 1999 Claims Scheme is due to be replaced by a revised scheme.
Page 16 of 23
 The LMP Lineslip
SLIP STRUCTURE SLIP EXAMPLE

EXPERT(S) FEES The party(ies) responsible for the EXPERT(S) FEES XIS ‘Experts Fees Scheme’ (EFS) to be
COLLECTION: collection of experts fees. Where this is COLLECTION: service provider for all lineslip security.
the same on each insurance bound it
can be specified here. Where it is likely
to vary by declaration “As agreed by
the agreement parties for each
insurance bound” should be stated
There are six options available under
the experts fees collection
arrangements. These options can be
found in Appendix C of this document.
N.B. this heading is optional on
Reinsurance business.

BUREAUX Any specific arrangements relating to the BUREAUX Delinked accounts for each insurance
ARRANGEMENTS: bureaux including administrative ARRANGEMENTS: bound to be presented by broker to XIS.
arrangements for premium settlement,
delinked accounting, and policy signing
or basis of policy agreement clauses.

NON BUREAUX Any specific arrangements relating to the NON BUREAUX All non-bureau underwriters agree to issue
ARRANGEMENTS: administrative arrangements for ARRANGEMENTS: a follow form policy following the leading
premium settlement, and policy signing bureau insurer.
or basis of policy agreement clauses that
apply to underwriters that are not Lloyd’s
or IUA underwriters and do not process
via XIS.

SPECIAL Any other arrangements affecting the SPECIAL (To be inserted if any).
ARRANGEMENTS: contract which cannot be more ARRANGEMENTS:
specifically accommodated in the
preceding headings.

Page 17 of 23
 The LMP Lineslip
SLIP STRUCTURE SLIP EXAMPLE

SIGNING Any signing arrangements relating SIGNING (To be inserted if any).

PROVISIONS: specifically to underwriters’ PROVISIONS:
participation. Only to be completed if
there is a requirement for
disproportional signing or a variation to
current market practice.

Page 18 of 23
 The LMP Lineslip

INFORMATION

Details of any information provided to underwriters to support Loss History as advised to broker at 1st May 2005:
the assessment of the risk at the time of placement. Where
the information is appropriate for inclusion in the lineslip it Year Net Absolute Premium Incurred Losses
should be shown here. Where the size or format of the 2000/01: GBP 6,000,000 GBP 4,000,000
information is not suitable for inclusion the location of the 2001/02: GBP 6,500,000 GBP 3,232,897
information should be clearly referenced from this section 2002/03: GBP 8,786,234 GBP 5,675,987
and should be made available to all underwriters during 2003/04: GBP 3,000,987 GBP 2,987,564
placing. 2004/05 GBP 5,000,000 GBP 3,200,000

Page 19 of 23
 The LMP Lineslip

FISCAL AND REGULATORY

SLIP STRUCTURE SLIP EXAMPLE

TAX PAYABLE BY Any premium taxes and charges payable by TAX PAYABLE BY None.
UNDERWRITER(S): underwriters from the premium paid to them UNDERWRITER(S):
e.g. Australian Income Tax. Any premium
taxes and charges payable by the Insured in
addition to the premium which are collected or
administered by underwriters should be
shown in the “Taxes Payable by (Re) Insured
and administered by underwriters” heading of
the Contract Details section.

US US Various as per each insurance bound.

CLASSIFICATION: To be entered as appropriate – e.g. if Risk is CLASSIFICATION:
in US Dollars.

NAIC CODES: To be included if the US classification states

US Reinsurance.

FSA CLIENT To be included on all business. There are 6 FSA CLIENT Various as per each insurance bound.
CLASSIFICATION possible options, please refer to the Appendix CLASSIFICATION
B of this document for further information.

IS BUSINESS This heading must be included if the FSA

SUBJECT TO Client Classification heading specifies "Retail"
DISTANCE or "Retail Exempt". If the FSA Client
MARKETING Classification heading specifies
DIRECTIVE RULES? "Commercial", "Large Risk", “Group Risks" or
"Reinsurance" it should be omitted. Where it
appears the only applicable answers are
"yes" or "no".

Page 20 of 23
 The LMP Lineslip

Appendix B – FSA Client Classification definitions

Classification FSA Classification description

Retail Dealing with a retail (private) customer acting outside of their
trade or profession. Includes sole trader/partnership, where
insurance includes elements of retail risk. [Includes private
large risks within EEA, see Large Risk].
Retail Exempt Exempt insurance warranty risks relating to breakdown, loss
of, or damage to non-motor goods supplied, or travel
insurance for damage to, or loss of, baggage and other risks
linked to travel booked with a travel agent.
Commercial Dealing with a commercial customer.
Large Risk Dealing with a commercial customer (Marine, Aviation, or
Transport (MAT), Credit and Suretyship, or Property &
Liability risks (based on meeting two of the following criteria:-
balance sheet size of 6.2m euro, net turnover of 12.8m euro
or have more than 250 employees)). Excludes any large risk
insured in name of a retail customer.
Group Risks A group policy sold to a customer (retail, commercial or large
risk) for the benefit of policyholders in relation to their
common employment occupation or activity where some or all
are capable of being a retail customer (with requirement to
provide a policy summary for policyholders, with policy
available on request).
Reinsurance Reinsurance worldwide.

Please note if the FSA Client Classification heading is completed “Retail” or “Retail
Exempt” the heading “Is Business subject to Distance Marketing Directive Rules?” must
be included and answered either “Yes” or “No”.

Page 21 of 23
 The LMP Lineslip

Appendix C – Expert Fee Collection

Context

As part of the market’s desire for flexibility in the way insurance contracts are processed, an experts’
fees collection scheme has been agreed as one of the LMP reforms. This scheme allows affected
parties to choose a collection process best suited to the particular circumstances of the individual
policy. The LMP Slip includes a slip heading of “Expert(s) Fees Collection” within the “Subscription
Agreement” section. This is where the particular option chosen from the list below must be recorded.

Options

The options must be selected from and agreed upon by brokers and Underwriters at the time of
placement along with any other qualifications or provisions deemed necessary by any of the
affected parties.

1. Named service provider to collect London market share only.

2. Named service provider to collect all slip security, including overseas.
3. Named service provider to collect only overseas percentages in conjunction with Option One
above.
4. Brokers to collect fees.
5. Broker to collect experts' fees, to be remunerated on a financial basis agreed between the
underwriters and broker at time of placement.
6. Any other agreement that can be determined between affected parties at time of slip placement.

N.B. The Slip Leader must ensure that any special fee bill collection arrangements with third party
service providers which the expert in question has in place are not prohibited or adversely affected
by the selection process above.

Scope

The options for fee collection recorded in this document may be used with all London market slips. If
an LMP slip is used then the slip heading will be available to record the necessary information. If the
slip is not produced to the LMP structure then it is recommended that a slip heading of “Expert(s)
Fees Collection” be inserted to record this information.

The “Expert(s) Fees Collection” heading is optional on reinsurance business but due consideration
should be given to facultative reinsurances where claims control or co-operation clauses may exist
with fees payable by London reinsurers.

Page 22 of 23
 The LMP Lineslip

Appendix D – Hold Cover Provisions

Where the lead underwriter has quoted a premium for a specific risk and has finalised all contractual
terms and conditions for that risk, OR where the lead underwriter has quoted a premium for a
specific risk and has finalised all contractual terms and conditions for that risk and has required the
Lloyd's broker to resolve a list of pre-conditions, the Lloyd's broker can confirm cover to the
policyholder upon confirmation that the pre-conditions have been met.

The Lloyd's broker in such arrangements cannot vary:

A) the premium or contractual terms and conditions quoted by the lead underwriter; and/or
B) the pre-conditions.

For the avoidance of doubt where one or more of the agreement parties for each insurance bound
have set a pre-condition for the supply of information pertaining to the contract within a defined time
period, then that agreement party may at the time of setting that pre-condition, permit the broker to
extend that defined time period by a reasonable amount of time. Any such permission extended to
the broker must be stated on the declaration slip and it is recommended that a maximum period of
extension is shown.

Lloyd’s will add new guidance to the Code of Practice explaining that such arrangements are not
delegated underwriting because the underwriters have not delegated underwriting, they have
delegated to the broker, the responsibility for clearing and resolving their pre-conditions.
All other arrangements DO delegate underwriting under the Delegated Underwriting Byelaw
therefore:
It is up to the lead underwriter to decide if such arrangements should continue. But if they do, the
easiest way to put them on a correct footing is to create a binding authority using a model wording
which sets out the underwriting authority delegated to the Lloyd's broker.

All such binding authorities should be treated exactly the same as any other binding authority at
Lloyd's and will therefore need to be registered and subject to XIS checking etc.

Page 23 of 23