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Market Reform Contract Guidance
Market Reform Contract (Open Market) Guidance - new version 1.8
In accordance with previous practice, a cross-market group has carried out the annual review of the MRC Open Market guidance. This has resulted in a new version (v 1.8) of the MRC guidance containing relatively minor enhancements. In summary, the following amendments have been made to the MRC guidance:
- Added language within the MRC examples contained in the guidance, and within the guidance itself, to support the Single Claims Agreement Party (SCAP) Arrangement being launched on 01 February 2018, including:
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adding reference to the LMA9150, the Single Claims Agreement Party (SCAP) Arrangement, under Conditions within the MRC examples contained in the guidance; |
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added model language to support the SCAP Arrangement to the MRC examples under the appropriate claims headings;
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added reference to SCAP within the claims guidance at Sections D2.1, D2.2, D2.6, D2.7 and D2.8 (Slip Leader, Bureau Leader, Basis of Claims Agreement, Claims Agreement Parties and Claims Administration respectively);
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amended the Bureau Leader Heading from ‘Conditional’ to ‘Mandatory’ for SCAP under section D2.2; |
- Added further guidance around the use of appropriate alternative headings under Section 4.1.
- Provided additional clarity within Section 4.2 around the use of electronic trading platforms and use of headings within the MRC;
- Enhanced the language of the Insured heading and “Additional Insureds” under Section A2.3 to assist with contract certainty for sanctions and tax checking;
- Added language to support the “Paper Sunset” for ECF under Section D2.8 (Claims Administration).
Market Reform Contract (Line slip) Guidance – new version 1.5
In alignment with the above, a cross-market group has also carried out a review of MRC Line slip guidance, which had not been updated since 2011, and this has resulted in a new version (v1.5). In summary, the following amendments have been made to the MRC guidance:
- Changes made and headings added to provide for clarity and transparency around the operation of the Line Slip in the Subscription Agreement:
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Section Leaders |
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Basis of delegation from the followers to the leader
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Agreement parties for line slip changes
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- Reference to the MRC Lineslip Declarations Guidance removed as this is being withdrawn. The MRC Open Market Guidance should be used for Declarations on an ongoing basis – additional guidance on using the MRC Open Market added under Section 2.2.
- ‘Rules and extent of authority delegated to the broker’ amended to ‘Rules and extent of any hold covered provisions’.
- “Lineslip” amended to “Line slip” throughout the document, as these terms can be used interchangeably.
- Further guidance provided for minimum requirements for the Information section.
- ‘FSA Client Classification’ heading renamed to ‘Regulatory Client Classification’.
- Added Reference to SCAP in claims handling sections.
- General alignment with Open Market MRC 1.8 language.
- Various minor updates to the scope section.
- Various minor updates to the general guidance section.
In both cases, the revised guidance (Open Market v1.8 and Line slips v1.5) can be used immediately but may also be phased in over a four month period, hence becoming the required standard for new and renewal business from 01 June 2018.
Practitioners are asked to note that the previous Lineslips Declarations guidance (v1.4) has not been revised/re-published, it has instead been withdrawn. Where appropriate, guidance is provided within the Line slips guidance v1.5 and/or Declarations for insurances bound should follow the Open Market guidance (v1.8).
No update to the Market Reform Contract (Binding Authority) Guidance v1.5 is planned at the current time, as Binding Authorities remain out-of-scope for SCAP.
Download now:
All MRC publications (including marked-up versions highlighting significant changes from the previous versions) and the LMA9150, are available to access on the LMG website under Documentation & Infrastructure, where there is also a dedicated SCAP page. The LMA9150 has also been loaded to the Lloyd’s Wordings Repository LWR.
If you have any queries arising from these documents, please do not hesitate to contact Alison Colver (alison.colver@lmalloyds.com, 020 7327 8370) .
Alison Colver
Head of Wordings
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