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📋 '''Markup (contract markup)''' refers to the annotated revision of a contract draft in which one party proposes changes—additions, deletions, and alternative language—to terms initially drafted by the other side. In insurance transactions and commercial arrangements, markups are a routine stage of negotiating documents such as [[Definition:Binding authority agreement | binding authority agreements]], [[Definition:Reinsurance | reinsurance]] treaties, [[Definition:Share purchase agreement (SPA) | share purchase agreements]] for carrier acquisitions, [[Definition:Program administrator agreement | program administrator agreements]], and [[Definition:Excess of loss reinsurance | excess of loss]] contracts. The markup functions as both a negotiating tool and a record of each party's position on contested provisions.

⚙️ A typical contract markup in the insurance context uses tracked changes or redline formatting—showing inserted text, struck-through deletions, and margin comments explaining the rationale behind each proposed amendment. When, for example, a [[Definition:Managing general agent (MGA) | MGA]] receives a draft [[Definition:Delegated underwriting authority (DUA) | delegated authority]] agreement from a [[Definition:Lloyd's syndicate | Lloyd's syndicate]], the MGA's legal counsel will mark up provisions relating to [[Definition:Underwriting | underwriting]] guidelines, [[Definition:Claims authority | claims-handling authority]], [[Definition:Bordereaux | bordereaux]] reporting obligations, termination triggers, and [[Definition:Commission | commission]] structures. In [[Definition:Reinsurance | reinsurance]] placements, the [[Definition:Reinsurance broker | broker]] often prepares the initial slip or contract wording, and the [[Definition:Reinsurer | reinsurer]] returns a markup adjusting [[Definition:Exclusion | exclusions]], [[Definition:Retention | retention]] thresholds, or [[Definition:Loss corridor | loss corridor]] mechanics. Multiple rounds of markups are common in complex transactions, with each iteration narrowing the gap between the parties until agreed language is settled.

💡 The quality and precision of a contract markup can materially affect the outcome of an insurance arrangement. Ambiguous wording left unaddressed during the markup process has been at the root of costly [[Definition:Coverage dispute | coverage disputes]] and [[Definition:Arbitration | arbitration]] proceedings—particularly in [[Definition:Reinsurance | reinsurance]], where the interpretation of a single clause can determine liability for tens of millions of dollars in [[Definition:Claims | claims]]. Experienced insurance lawyers and [[Definition:Underwriting | underwriters]] treat the markup phase as an opportunity not only to protect their client's commercial position but also to improve clarity, eliminate inconsistencies, and ensure alignment with applicable regulatory requirements in the relevant jurisdiction, whether that involves [[Definition:Solvency II | Solvency II]] outsourcing rules, [[Definition:National Association of Insurance Commissioners (NAIC) | NAIC]] model law provisions, or [[Definition:Monetary Authority of Singapore (MAS) | MAS]] conduct standards. In an era of increasing contract digitization, some [[Definition:Insurtech | insurtech]] platforms now offer automated markup comparison and clause libraries, accelerating a process that has historically been time-intensive and manual.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Binding authority agreement]]
* [[Definition:Slip]]
* [[Definition:Contract certainty]]
* [[Definition:Coverage dispute]]
* [[Definition:Delegated underwriting authority (DUA)]]
* [[Definition:Reinsurance treaty]]
{{Div col end}}

Definition:Markup (contract markup) - Revision history

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