Solutions

Market Reform Contract (MRC) v3

A data-driven, structured contract that enables extraction of key placement processing data

Implement – In progress

What is the MRC v3?

The MRC v3 is a revised version of the MRC which will enable accurate, ACORD standardised data, including most of the Core Data Record (CDR) data, to flow through the entire insurance transaction lifecycle with minimal human intervention. 

Data is captured in the MRC v3 during risk placement and can be easily extracted to complete the CDR. This will be used to drive digital processing, consistent with the MRC v3. 

MRC

Benefits

Strengthens data quality

Supports data completeness, increases accuracy and consistency by using controlled data standards.

Reduces re-keying

Saves time and reduces effort as data can be easily extracted.

Drives consistency

Ensures data is consistent across the MRC v3 and CDR reducing errors.

User journey

The MRC v3 is used in the open market placement journey.

Open market placement

Risk placement

Submission and quote

  • Two women working together at a desk
    Broker builds out the risk contract details with the client

    ‘Right first time' data is captured through a data-driven, structured contract

  • Two people in the Lloyd's underwriting office with the bell
    Broker presents the risk to the underwriters in the market

    Risk data is shared in a Market Reform Contract v3 and is loaded onto an accredited placing platform, and the Core Data Record is extracted

  • Two people sat at a desk talking about quotes
    Underwriter reviews the contract, negotiates the risk with the broker, and provides a quote

    Contract data is kept in alignment with the Core Data Record standards, powering downstream premium processing and payment

Risk placement

Firm order and bind (written lines)

  • A man sat at a desk on a computer with a checklist
    Underwriter conducts relevant compliance reviews of the contract pre-bind
    MRC not applicable to this step
  • Two people shaking hands
    Broker confirms the quote is accepted by the client, and the underwriter confirms the offer and binds the risk

    Better communication between contracting parties due to set standards and data points on the contract structure

Risk placement

Signing down and contract complete

  • Group of men and women discussing risk
    Broker signs down the placement for risks that are oversubscribed, to ensure it adds up to 100%

    Structured data in the contract provides a single source of truth and unified view of who is on the risk

  • Tax and accounting data
    If required, broker and underwriter provide tax and accounting data to complete the Core Data Record (CDR)
    MRC not applicable to this step

Premium processing and payment 

Accounting and settlement 

  • A woman at a desk on a computer with finance icons above her
    Broker creates the accounting instructions
    MRC not applicable to this step
  • A woman holding a loading sign with a cloud above it
    Broker provides relevant information for processing

    All participants on the contract have access to the data applicable to them in a standardised format

  • A woman sat at a desk with a question mark above the computer
    Broker may receive queries for more information
    MRC not applicable to this step
  • A woman on a laptop sending money
    Once the premium is paid by the client, the broker triggers payment of the premium to underwriters
    MRC not applicable to this step
  • A man receiving a notification on an iPad
    Underwriter receives a notification when the funds have been settled
    MRC not applicable to this step
  • The industrial Lloyd's building
    The Corporation receives the relevant tax and regulatory data

    Structured data in the contract enables custom reporting and analysis

Progress update

What’s been delivered

  • The MRC v3 has been published following market consultation and is now ready to be used 

What we’re working on right now

  • The MRC v3 has been published and is ready to use 

  • Many brokers are using the creation of the ACORD compliant CDR and the MRC v3 as a platform to enable digital strategies within their firms; this is welcomed progress as we look to collectively drive the digitalisation of our market

  • Digital strategies vary by firm, with some brokers choosing the data-first option and others adopting a more iterative approach

  • With this in mind, there will be two routes to digital adoption that will both enable a common end state:  

    1. Brokers can continue with MRC v3 implementation for open market contracts incepting from 1 January 2024 as originally outlined by the LMG Data Council 

    2. Brokers can evidence robust plans to the Blueprint Two adoption team by 31 December 2023 that demonstrate their capability to produce digital messages (CRP / EBOT / ECOT) by the end of 2024 for onwards submission to Velonetic 

  • Through appropriate governance, the LMG Data Council intends to determine a point in the future where Velonetic will no longer accept LPANs as a direct feed into the Gateway and digital messaging will become a requirement for all market participants.

  • Next steps for those market participants implementing the MRC v3:

    • Familiarise themselves with the MRC v3 template, which can be accessed through the LIMOSS Market Business Glossary (MBG) or LMG website. Other resources including anonymised, populated MRC v3 examples are also available to support

    • Brokers should produce all* new contracts and contract renewals using the MRC v3

    • Carriers should be prepared to receive and understand the changes introduced within MRC v3 and supply their data in the new template

*There is a small minority of instances where specific clients may require a different MRC format, which is catered for in the Lloyd's byelaw.

Further information

Discover more information on the MRC v3 on the London Market Group (LMG) website.

Find out more

An interactive version of the MRC v3 is now available on the LIMOSS Market Business Glossary (MBG). To access the MRC v3, you will be asked to first register on the MBG. 

Access the MRC v3

Get adoption ready

Blueprint Two will be delivered in two phases. The target launch date for phase one is October 2024, and all firms must adopt phase one of the new digital services.