The LMA3333
should not be used on MRC(BA); the several
liability language in the model agreement
should be used. However, it is vital that
the correct several liability clause is
included on the declarations or certificates
(for details of which see Lloyd's Bulletin
Y4133 of 11 March). Where a risk is written
partly off a binding authority & partly
with open-market lines then see Question
2..
In this case
it is important that separate evidence of
cover is issued to the policyholder for
the proportion placed under the binding
authority and the proportion placed on an
open market basis. A certificate may be
issued by the coverholder but only in respect
of that part of the risk placed via the
binder (whether or not on a prior submit
basis). That certificate should include
the appropriate several liability clause
(i.e. either LMA 5096 or LSW 1001 as appropriate).
The proportion placed on an open market
basis may be evidenced by the relevant MRC
or another acceptable form of evidence of
cover, either of which should contain LMA
3333, If the proportion being placed under
the binding authority is being placed with
underwriters on a prior submit basis, the
broker should ensure that the declaration
clearly shows which part is being insured
on an open market basis and which under
the binding authority. Brokers may find
it easier to use separate submissions and/or
separate security pages in order to achieve
this.
The separate
page numbering of sections within a Binder
has been a requirement for some time and
has not been newly introduced within MRC
(BA). It was introduced so that brokers
could remove some sections from the portion
of the contract sent to the Coverholder
(e.g. Subscription Agreement).
