The following has been agreed by the LMA, IUA and LIIBA to enable efficient payment of survey fees to third-party experts. 

This scheme will allow Velonetic to: 

• provide the required market share information to the authorised third-party fee collection agent(s)  for the purpose of facilitating the payment of surveyor and expert fees via the Market Share Data Form; 

• accept fee payment authorisation solely from the London market participant requesting the survey. 

Background 

The need for the scheme arises because many surveyors are experiencing lengthy delays in the settlement of their invoices for work which they have been instructed to carry out and have carried out. These delays in part result from fee collection agents being unable to access detailed information about individual underwriters’ shares on complex placements. In many cases, the information is not readily accessible or clear, causing extended payment timelines and creating financial pressures for surveyors. These financial pressures have now reached a tipping point where some surveyors may refuse to do further work for the London market. 

To address this, the LMA, IUA and LIIBA have enabled Velonetic to release the necessary underwriting information directly to authorised collection agents when the initial fee payment submission has incorrect or incomplete data. 

The aim is to: 

• expedite the payment of surveyor and expert fees and clear back-year invoices; 

• reduce administrative friction in obtaining underwriting share data;  

• support the continued viability of expert survey services.  

The scheme was successfully piloted with the LMA and IUA’s Joint Specie Committee and LIIBA’s Fine Art and Specie Committee. Participating collectors reported significant benefits, including one that achieved a 75% reduction in outstanding invoice value. The simplified fee payment authorisation helped across all submissions and there was an indicative improvement to the resolution rate of around 20%. The scheme also enables the resubmission of previously rejected submissions relating to aged invoices.

The scheme  

Under this scheme, the LMA and IUA caused a “contract change notice” (a “CCN”) to be effected, which amends the terms of the existing FERN agreement. The LMA and IUA have authority to agree such CCNs on behalf of the market. When the fee payment submission has incorrect or incomplete data, this CCN allows Velonetic to provide the required information to the authorised third-party fee collection agents listed below, which may include: 

• UMR(s) 

• Open Market / Non-Bulking Lineslip / Bulking Lineslip(s)    

• Original Signing Numbers & Dates  

• Market share % 

• Agreement Party  

All such information will be used solely for the purpose of facilitating the payment of surveyor and expert fees. The Market Share Data Form can be found at the end of this page.  

The information will be provided to fee collection agents acting on behalf of the surveyors. These fee collection agents will prepare the relevant documentation for Velonetic to process payment entries, but only where the collecting agent can evidence the request for the survey along with the agreement to the invoice/s. 

It is important to note that the CCN simply authorises Velonetic to correct information that the collection agent has already obtained from the broker. 

The CCN also provides that the Agreement Party, for the payment of fees in respect of surveys undertaken, will be the London market participant requesting the survey only, which is, in practice, the overall lead of the risk. 

Finally, the CCN authorises Velonetic to process these entries as presented where the collecting agent can evidence the request for the survey along with the agreement to the invoice/s. 

For the purposes of this scheme, only the following agents are currently recognised and authorised to request and receive underwriting data from Velonetic:  

• Recover-Re Limited 

• Senator Insurance Services Limited 

• Unique Insurance Solutions Ltd 

Additional collection agents may be added upon notice to Velonetic by the LMA and IUA jointly. 

The process 

1. When the surveyor is instructed to undertake a survey, as much of the Risk Details as is available at the time of instruction should be provided (see Market Share Data Form below) as well as confirmation of the Agreement Party (this is the London market participant who requested the survey) evidence of the survey request 

2. Once the survey has been completed, the fee collection agent can prepare the relevant documentation for Velonetic to process payment entries following the usual process, and in addition will submit with each package: 

• the completed Market Share Data Form 

• Agreement Party authorisation for invoice payment 

• evidence of the survey request. 

3. If the information is incorrect or incomplete, the Market Share Data Form allows Velonetic to share and correct information with third-party fee collectors for resubmission. Velonetic are required to provide an audit trail of any data shared. Where no form is included in a submission, data sharing will not be possible. 

4. Following successful (re)submission and when premium has been received, the payment may be processed. Please note, the scheme is not designed to correct cases of extreme late or non-payment of premium, however, the Specie pilot showed some success when FDOs were used in these cases, and it is advised that that fee collector contact the broker and/or the London market participant who commissioned the survey. 

If you have queries about the scheme, for the LMA, please contact Joe Brace (joe.brace@lmalloyds.com), for the IUA please contact Kim Darrington (kim.darrington@iua.co.uk) or for LIIBA please contact James Livett (james.livett@liiba.co.uk). 

LMA contacts