Plans to modernise Lloyd's and the Company Market have been delayed for the second time this year as policy documents await market approval.
The new slips used by underwriters to accept insurance risks were initially due to be used for the first time in July. But lawyers' concerns they could be invalid caused the launch to be put on hold for at least a month.
Now plans to introduce the London Market Principles (LMP2001) have been delayed again, for at least another two months.
Joint chairman of the LMP2001 steering group, Stewart McCulloch, said: “The legal review team, underwriters and brokers have finished their deliberation on the new format slip and we just have to take it through approval by the London Market Brokers' Committee (LMBC), International Underwriting Association (IUA) and Lloyd's Market Association (LMA).
“We have finished our swotting and are hoping they will say yes and it will be off to the races. If everyone is happy with what we have done, October does not sound outlandish.”
McCulloch said one of the reasons for the delay was the need to make the slips globally accepted.
“One larger issue was that we wanted to put an ‘aspiration time scale', like a service level agreement, to say the broker has to get the document to the bureau by a certain time,” he explained.
“But the legal advice was if you put something in a slip, even if it is indicative and not contractual, it can have a larger effect – especially in US courts. It was felt this could be misconstrued so it was best not to expose the market to those issues.”
McCulloch added there were a number of factors still to be clarified, including lead-only agreements and premium terms.
But he said: “We have agreed a slip structure that all brokers and underwriters are happy with it which is simpler and clearer.”
Commenting on the delay, he said: “I think the reaction is one of ‘you always hope to do things as fast as you think you can do it'.
“Some of the larger issues were quite complex and we moved as fast as anyone could have moved.
“We are not disappointed, but are trying to improve the market and that may take some time. I am just hoping people will embrace what we have done in a positive manner.”
