View source for Definition:Reinsurance slip

📋 '''Reinsurance slip''' is the core market document used to negotiate and confirm the principal terms of a [[Definition:Reinsurance contract | reinsurance contract]] before a formal policy wording is executed. Originating in the [[Definition:Lloyd's of London | Lloyd's of London]] market and still central to London-market practice, the slip serves as a concise summary of the risk, the proposed terms, and the [[Definition:Reinsurer | reinsurers']] agreement to participate — traditionally evidenced by each reinsurer's stamp and written line indicating the percentage of the risk they accept. While the concept has evolved alongside electronic placement platforms, the slip remains the authoritative record of what was agreed at the point of binding.

⚙️ A typical slip sets out the [[Definition:Ceding company | cedent's]] identity, the class and territory of business, the type of cover ([[Definition:Treaty reinsurance | treaty]] or [[Definition:Facultative reinsurance | facultative]]), the [[Definition:Reinsurance layer | layer]] structure including [[Definition:Attachment point | attachment points]] and [[Definition:Reinsurance limit | limits]], the [[Definition:Reinsurance premium | premium]] or [[Definition:Rate on line (ROL) | rate on line]], [[Definition:Reinstatement | reinstatement]] terms, [[Definition:Loss settlement | claims-handling]] provisions, and any special conditions or [[Definition:Exclusion | exclusions]]. In the London market, the [[Definition:Reinsurance intermediary | broker]] carries the slip from underwriter to underwriter — or, increasingly, processes it through platforms like PPL (Placing Platform Limited) — until the required capacity is subscribed. The lead underwriter, who typically sets the terms and price, signs first, and following markets then decide whether to add their lines at the same conditions.

💡 Although it is not always the final contract wording, the slip carries significant legal weight. Courts in major insurance jurisdictions have upheld slips as binding agreements when the essential terms are sufficiently clear, even in the absence of a later formal policy document. For this reason, precision in drafting is critical; ambiguous language on a slip can lead to costly [[Definition:Coverage dispute | coverage disputes]]. Modern market-reform initiatives — including standardized slip templates promoted by the [[Definition:Lloyd's Market Association (LMA) | Lloyd's Market Association]] and the [[Definition:International Underwriting Association (IUA) | International Underwriting Association]] — aim to improve consistency, reduce processing delays, and facilitate straight-through electronic processing, supporting the broader digitization of the [[Definition:Reinsurance | reinsurance]] placement workflow.

'''Related concepts:'''
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* [[Definition:Reinsurance submission]]
* [[Definition:Binding authority agreement]]
* [[Definition:Lloyd's of London]]
* [[Definition:Reinsurance intermediary]]
* [[Definition:Treaty reinsurance]]
* [[Definition:Facultative reinsurance]]
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