CAP A DE CONTROL:

The following applies to existing paper files or notifications that HAVE previously been entered by XCS (i.e. there is an associated Xchanging CLASS record).

In May 2008 as part of the ECF Release 7A, the ECF system was amended to include a new value in the ECF indicator field to allow brokers to flag new ECF claims that related to existing paper files (see Xchanging bulletin dated 20 May 2008 reference 2008/065). It was not possible to implement the use of this indicator for the Lloyd's market until guidelines had been agreed for the introduction of legacy claims onto ECF and changes had been made to the XCS internal workflow system.

Prior to the implementation of this new process, brokers will seek agreement from willing agreement party insurers to set up a legacy partnership and should agree what in-scope claims, by class of business and/or specific accounts will be migrated to ECF. Additionally, brokers and Lloyd’s insurers will agree which syndicates within a particular managing agency have agreed to deal with legacy claims, along with the agreed method of back scanning the legacy documentation. These partnerships must be registered with the Chair of the ECF User Group using the Legacy Partnership spreadsheet which is available on the Market Reform website. A list of the partnerships and the recommendation paper by the MRSG Legacy Sub-Group will also be made available on the London Market Group website (www.londonmarketgroup.co.uk).

NB. Any legacy claims being handled under a delegated agreement between XCS and a Managing Agent will be treated as CAF (Claims Agreement for Followers) and require a full file.

It is essential that where brokers wish to submit Legacy claims for conversion, they ensure the ECF indicator is set to ‘T’. If a claim is submitted into ECF without the indicator set to ‘T’, there is a high risk that duplicate records could be created in the XCS CLASS system, which will cause over-reserving and, in the worst case, possible duplication of payments.

4.30.1 Overview of the Business Process

The new business process involves the following key steps, which should be followed in conjunction with the procedures described in SP&P.

4.30.1.1 Broker process

The broker will create a new CLASS@Lloyd’s TR and set the ECF Indicator to ’T’. (This will only be possible on the first sequence for Lloyd’s).

• Ensure that any previously paid amounts are accurate and included in the previously paid information of the new ECF UCR TR.

• Indicate on the paper file that the file is ECF Legacy and include details of the ECF UCR that corresponds to the paper file, to enable the ECF UCR to be located in ECF.

• Brokers should continue to use the existing paper pro forma when submitting legacy claims (see appendix D, Pro Forma word doc). This should be placed in the file as the top piece of correspondence.

• A complete copy of the paper file should be loaded to the IMR unless the minimum file requirements are applicable (see appendix E, Minimum Requirements for XCS TP Legacy Claims)

• Release the ECF UCR TR into ECF

• Promptly present the paper file to the lead agreement party for review.

4.30.1.2 Insurer process

Insurers may become aware of file(s) in transition from paper to ECF in a number of ways. In each case, the broker must present the paper file to the agreement party before the ECF transaction is adjusted or responded to.

Scenarios include but not limited to:

• Insurers may search via the Awaiting Action screen with the ECF Indicator set to ‘T’ • Insurers may receive notification via the .csv file with the ECF Indicator set to ‘T’

• The broker’s claims narrative on the ECF UCR TR will alert insurers to the fact that this is an ECF Legacy claim

Once the paper file has been presented to the Lead agreement party, the leader will:

• Confirm that they have agreed a legacy partnership with this particular broker for this class of business/ accounts,

• Confirm that there are no fundamental issues with the ECF UCR TR including completeness of documentation in ECF, or raise the appropriate query with the broker (see section 4.30.3), • Respond to the ECF TR, scratch the paper file and the transition pro forma,

• Pass the paper file back to the broker.

NB. It should be noted that the ‘T’ indicator is not visible from within an ECF claim. It is only possible to identify claims with the indicator by searching on the Awaiting Action view or .csv file.

(NB. The paper file will be considered to be the trigger for the legacy conversion presentation. Similarly, the XCS SLA will not begin until the paper file is received by XCS.)

4.30.1.3 Broker process continued

Once the broker has confirmed that the leader has agreed to convert this claim to ECF and has received the paper file back, they should present the paper file to the next agreement party.

• The second agreement party should review the ECF TR and the paper file, and respond appropriately in ECF.

• When the next agreement party is XCS, the paper file should be presented in a timely manner to the XCS Legacy co-ordinator of the relevant XCS department. Full details of the Legacy coordinators are attached (see appendix F, XCS Legacy Coordinators).

• The file should not be deposited with the XCS front desk (barrier), nor should it be broked on the XCS queue.

• Similarly, the broker should not attempt to use the XCS Urgents e-mail mechanism for Legacy files. Urgent Legacy claims should be discussed with the relevant XCS department manager and/or Legacy coordinator, who will advise how to present the file.

4.30.1.4 XCS process

The “Broker Additional Narrative” shown on the transaction summary screen should alert XCS to the fact that this is an ECF Legacy claim and that they should expect the broker to present the paper file, prior to beginning to adjust the ECF transaction and/or respond in ECF. (In addition, the ‘T’ indicator will route claims within the XCS workflow to a Legacy “in-basket”). Once the paper file reaches the XCS Legacy coordinator, the file will be passed to the relevant adjuster, in line with current service rules. The XCS adjuster will conduct the following tasks:

• Compare the paper file with the XCS CLASS record and the ECF UCR TR, to ensure that they are consistent. Where they are not, the XCS adjuster will look to see if there is a valid reason for any such discrepancy. e.g. in some instances, the XCS CLASS paid to date may be greater than that shown on ECF, where XCS have processed fees directly, without the involvement of the broker.

• Link the existing XCS class record with the ECF UCR.

• Confirm that they can reconcile the paper file with the ECF transaction and respond in ECF (see appendix E, Minimum Requirements for XCS TP Legacy Claims).

• Mark the paper file to show that it has been converted to ECF.

• Trigger the XCS workflow records for the ECF transaction and the paper file to be merged into a single record and show that the claim has been successfully converted to ECF. • Return the paper file to the broker.

(NB The paper file should not be required again, but in the event that it is required by insurers or XCS, the XCS workflow system will be able to recognise that the file has been converted to ECF.

4.30.2 Subsequent transactions

All future transactions on an ECF claim that has been successfully reconciled and converted from paper, will be treated as pure ECF transactions and all future documentation should be loaded to the IMR (Insurers Market Repository) under the relevant UMR/UCR.

It is recommended that no subsequent ECF transactions on this UCR are submitted until the initial transitional transaction is successfully converted.

The paper file will not be required to be seen by the agreement parties, unless requested or unless there is some query with the converted documents.

In the XCS workflow system, in the exceptional circumstance where the broker has submitted subsequent transactions on the ECF UCR prior to the reconciliation of the first sequence, these will be routed to the XCS ECF Legacy workbasket. These will be handled by the same adjuster that is converting the paper file to ECF.

4.30.3 Reconciliation failures and other exceptions 4.30.3.1 Reconciliation failures:

A claim submitted for conversion to ECF may not always be able to be reconciled. Scenarios include but are not limited to:

• Paper file does not arrive in a timely manner • Legacy claims submitted with a ‘Y’ indicator • Non-legacy claims submitted with a ‘T’ indicator • Reconciliation failed due to incorrect financial data • Reconciliation failed due to missing documents

• Reconciliation failed due to incorrect, critical, non-financial data

The scenarios will follow the process described below, depending upon the type of issue found.

4.30.3.1.1 Paper file does not arrive in a timely manner

Where a Legacy ECF UCR TR containing a ‘T’ indicator is submitted, but the paper file is not presented in a timely manner, the Leading agreement party, second agreement party and/or XCS may chase the broker for the paper file.

XCS will monitor the XCS workflow Legacy “in-basket” and will contact brokers if the corresponding paper file has not been presented within 5 service days of receipt of the ECF TR. XCS will diary the ECF TR for a further 5 service days. If after that time, the paper file still hasn’t arrived, and the broker cannot give a satisfactory reason for the delay, XCS will Query/Return the ECF transaction back to the broker.

4.30.3.1.2 Legacy claims submitted with a ‘Y’ indicator

If a broker accidentally submits a Legacy claim in ECF, with a ‘Y’ ECF indicator, there is a high risk that duplicate records could be created in the XCS CLASS system, which will cause over-reserving and in the worst case possible duplication of payments. These situations should ideally be spotted by the leader. However, if they get as far as XCS, and XCS detect a file in ECF is actually a Legacy claim, they will re-allocate the claim to the XCS Legacy workflow in basket. The ECF transaction will then await the paper file and XCS will alert the leader and agree the course of action to be taken. Brokers should however make every effort to avoid this situation arising.

4.30.3.1.3 Non Legacy claims with a ‘T’ indicator

Where a new ECF UCR TR is submitted by a broker containing a ‘T’ indicator, by mistake, the claim will be treated as a Legacy claim and will be routed into the XCS Legacy in basket. Such claims would not be reviewed by XCS until after 5 service days, but the onus is on the broker to implement controls in their own process to ensure that such instances are avoided wherever possible. It is not necessary to query/return the transaction for this reason, but either the leader or XCS should alert the broker to this error.

4.30.3.1.4 Reconciliation failed due to incorrect, financial data

Where the financial data in the ECF UCR TR is incorrect, e.g. previously paid is incorrect and this is not detected by the Lead agreement party, XCS will Query/Return the ECF transaction and will contact the broker to see whether it is possible to, preferably, amend the transaction or correct the information and re-submit the transaction in a reasonable timescale (to be agreed between the XCS adjuster and the broker). If the broker feels that they cannot resolve the issue either in a timely manner, or they require the paper file to enable this, then the paper file will be returned to the broker. The XCS adjuster will decide at the time whether they feel they are able to continue to adjust the claim as a paper file even though ECF Legacy reconciliation has failed. Where the reconciliation does fail, the broker will have the opportunity to resubmit the file for reconciliation at a later date.

4.30.3.1.5 Reconciliation failed due to missing documents

Where a claim either requires XCS to perform the CAF role (Claims Agreement for Followers) or is a delegated lead claim, the ECF file must contain a complete copy of the paper file.

Where XCS are providing a TP (Technical processing) role, a reduced file content is acceptable, subject to certain key documents being present in the ECF file (see appendix E, Minimum Requirements for XCS TP Legacy Claims).

Where the Leader detects that the ECF file is missing required documents, the Leader will contact the broker and request the documents be added to the transaction. If the broker is unable to provide the required documents in a timely manner, the leader may choose to add the documents to the ECF file themselves, (if they are present in the paper file). Alternatively, the Leader may choose to Query/Return the ECF TR and paper file to the broker.

Where a second agreement party or XCS detect that there are missing documents (see note above for XCS role in this respect), they will raise this with the broker and may request that the documents be added to the ECF file. Where the broker adds documents in this way, they should resubmit the ECF TR, so that the leader is alerted to the presence of the new documents and may respond in ECF accordingly.

4.30.3.1.6 Reconciliation failed due to incorrect, critical, non-financial data

Where reconciliation has failed because certain critical non financial data is incorrect this is likely to cause the UCR to have to be cancelled and replaced. The broker should not attempt to re-use the UCR, as this will cause a duplication in the ECF database.

4.30.3.1.7 Paper files with incorrect or missing UCRs

Where a Legacy paper file is presented to leader or XCS with either an incorrect or missing ECF UCR, the leaders/XCS adjuster will contact the broker and will request confirmation of the correct UCR information. If the info can be delivered in a timely manner, leaders/XCS will continue with the reconciliation process. However, if the broker cannot provide a valid ECF UCR, the leaders/XCS claims adjuster and the broker will discuss whether the transaction should be handled as paper. Depending upon the outcome of these discussions, it may be necessary for either the broker, leaders, or XCS to alert agreement parties to the amended UCR.

4.30.3.2 Other exceptions 4.30.3.2.1 Delegated lead claims

Claims may be delegated to XCS either on a claim by claim basis by a Leading underwriter, or via the Risk Record Update process. In the case of the former, the broker should submit the ECF UCR TR as normal and should present the Legacy paper file to the Leader. If the leader decides to delegate the claim to XCS, the ECF transaction will move to XCS and will be sent to the XCS workflow Legacy in- basket to await the arrival of the paper file. The broker should then present the paper file to the relevant XCS department Legacy coordinator. The coordinator will allocate the paper file to the relevant XCS claims adjuster, who will review the claim and respond in ECF. They will pass the paper file to the relevant CAF or TP team, who will carry the CAF or TP role and will also conduct the Legacy reconciliation. After reconciliation the paper file will be returned to the broker. Where reconciliation is successful, all subsequent advices should be submitted as pure ECF transactions. In

XCS workflow bar code will used to identify that the paper file has been converted to ECF, so as to avoid any risk of duplication of XCS CLASS records.

4.30.3.2.2 Files without XCS barcodes

Where a paper file pre-dates the XCS Workflow system and does not have an active XCS workflow barcode, XCS will initially create a paper workflow record to record receipt of the file. This is to ensure that XCS can track the paper file within XCS if there is any delay in getting the file to an adjuster. Thereafter, the file will be reviewed for reconciliation.

NB. The process described above is subject to change, as appropriate, as the volume of legacy claims increases.