Risk placement
Submission and quote
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Broker builds out the risk contract details with the client
Broker creates the contract using the new Market Reform Contract (MRC) v3, which contains fundamental risk data that will be used in the Core Data Record (CDR) to enable digitalised downstream processing. This is then keyed into or extracted (if available by a third-party system) to an accredited platform.
Broker creates a contract using the Market Reform Contract (MRC) v3 template in their existing contract creation tool (e.g. a Word document).
How we’re delivering the MRC v3
Broker uses an accredited platform to assemble the Core Data Record (CDR), either through data extraction or keying in manually. The solutions will vary depending on chosen platform.
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Broker presents risk to the underwriters in the market
During negotiations with underwriters, the MRC v3 and the Core Data Record (CDR) will evolve in line with negotiations. Where a ‘document first’ approach is used, the broker will be responsible for manually keeping the CDR and MRC v3 aligned.
At any point during the contract creation, the 'soft call' service can be used to validate CDR data. The ‘soft call’ is a service provided by the Digital Gateway, which brokers and underwriters can use pre-bind to validate they have the right data in the CDR. For those who are document first, the data will need to be extracted from the document into the platform, in order to utilise the soft call service.
An accredited platform will be used to share draft versions of the Market Reform Contract (MRC) v3 and Core Data Record (CDR).
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Underwriter reviews the contract, negotiates the risk with the broker, and provides a quote
Underwriter reviews the contract, negotiates the risk with the broker, and where they are willing to provide capacity, provides a quote.
The lead underwriter agrees the Market Reform Contract (MRC) v3 and the subset of the Core Data Record (CDR) data required for downstream processing.
Broker discusses the risk with the underwriter using the Market Reform Contract (MRC) v3 and manually updates this with key data. After each update, the document will be uploaded into the accredited platform, and the Core Data Record (CDR) will need to be kept aligned either through data extraction or manual rekeying.
How we’re delivering the MRC v3
The CDR is built up with data collected through discussions using the MRC v3. A combination of data extraction and/or manual CDR updates will be required with each change to the MRC v3.
Broker and underwriter can validate the CDR data using the 'soft call’ service in the Digital Gateway using Application Programming Interfaces (APIs) from an accredited platform. Any errors or feedback will be sent back to the accredited platform for correction, and these must be manually addressed and re-keyed into both the MRC v3 and the CDR (where changes are required).
Risk placement
Firm order and bind (written lines)
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Underwriter conducts relevant compliance reviews of the contract pre-bind
Once the risk is agreed, the underwriter performs a compliance review of the contract to ensure it is complete with all the key information and clauses before binding the risk. This involves using various tools (e.g. Crystal) for Lloyd's lines that ensure compliance with Lloyd's licensing agreements.
Existing pre-bind checks will be required to be conducted on the contract, ensuring compliance with Lloyd’s practices. The ‘soft call’ will highlight any non-compliant Core Data Record (CDR) data or rules, while the compliance checks will identify a wider range of issues that cannot be automated.
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Broker confirms the quote is accepted by the client, and the underwriter confirms the offer and binds the risk
The lead underwriter reviews and agrees the final contract in the accredited platform before putting their stamp down.
By using the Market Reform Contract (MRC) v3, most Core Data Record (CDR) data will be captured by default. Any additional CDR data required that is not in the MRC v3 can be submitted via the accredited platform (if the platform allows). However, if the platform used does not cater for all CDR data, an alternative assembly route will need to be found to submit the additional CDR data to the Digital Gateway.
Underwriter reviews and agrees any new or updated data submitted by the broker by putting their stamp down. The broker then approves the underwriter’s line and submits the Core Data Record (CDR) to the Digital Gateway.
Risk placement
Signing down and contract complete
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Broker signs down the placement for risks that are oversubscribed, to ensure it adds up to 100%
Broker signs down lines and submits the Core Data Record (CDR) via an accredited platform to the Digital Gateway.
Core Data Record (CDR) data is checked and enriched by the Digital Gateway, supporting the completion of the CDR. Any errors are sent back to the submitting accredited platform to be corrected and resubmitted. Once errors have been remediated, the CDR is complete.
Once the CDR is complete, it will be available for retrieval by the broker and underwriters.
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If required, broker and underwriter provide tax and accounting data to complete the Core Data Record (CDR)
For more complex risks, additional tax and accounting data may be required from the broker and underwriter to complete the CDR. This should be provided at contract complete, when signed line confirmation must have occurred and all accounting and tax CDR data should be submitted.
Documents are used (e.g. statements of value (SOVs) and tax schedules) to assemble and submit the remaining data required to complete the CDR.
Premium processing and payment
Accounting and settlement
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Broker creates the accounting instructions
Broker creates the accounting instructions by sending an Electronic Back Office Transaction (EBOT) Technical Account (TA), which will replace the London Premium Advice Notes (LPANs). This will speed up premium payment, improve accuracy, and reduce manual effort and costs for the broker. These instructions will be at a fundamental level, split by insurer and currency.
Broker creates the accounting instructions by sending an Electronic Back Office Transaction (EBOT) Technical Account (TA) to the new Digital Processing Platform (IPOS). The EBOT TA will replace the London Premium Advice Notes (LPANs), improving premium payment speed, transparency, accuracy, and reducing manual effort and costs for the broker. These are delivered at a fundamental level, splitting by carrier and currency.
How we’re delivering the Digital Processing Platform
The EBOT is validated against the Core Data Record (CDR) to ensure that the accounting instructions match the risk record. Only EBOTs that match the CDR will be accepted.
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Broker provides relevant information for processing
The Technical Account (TA) created by the broker is automatically validated against the Core Data Record (CDR) which allows the Financial Account (FA) to be processed in the new Digital Processing Platform, allowing money movement to take place.
Underwriters will be advised of all Technical Accounts (TAs).
Broker can automatically create the Financial Account (FA), enabling money movement to take place with greater speed and transparency.
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Broker may receive queries for more information
Additional supporting information required to enable settlement will be provided and corrections made. This may be shown to the submitting platform at each step of the process.
Validation issues or queries are returned to the accredited platform, and any outstanding issues may require an update to the Market Reform Contract (MRC) v3 and Core Data Record (CDR). Errors will be highlighted by the Digital Gateway earlier in the process, which will significantly reduce errors.
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Once the premium is paid by the client, the broker triggers payment of the premium to underwriters
Brokers submits an Electronic Back Office Transaction (EBOT) Financial Account (FA) message when a client's money is received.
An Electronic Back Office Transaction (EBOT) Financial Account (FA) message is sent to the Digital Processing Platform and the FA is matched against the EBOT Technical Account (TA).
How we’re delivering the Digital Processing Platform
Underwriter will receive premium payments faster, with greater certainty that it is accurate and aligned to the risk record.
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Underwriter receives a notification when the funds have been settled
All market participants are automatically notified when funds are settled.
The Digital Processing Platform automatically notifies all market participants when funds are settled utilising an Electronic Back Office Transaction (EBOT).
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The Corporation receives the relevant tax and regulatory data
The Corporation receives the relevant part of the Core Data Record (CDR) to facilitate tax and regulatory reporting. Syndicate reporting to regulators and tax authorities is a much smoother and more accurate process.
The Corporation receives the relevant parts of Core Data Record (CDR) to facilitate tax and regulatory reporting.
