Line slip (delegated underwriting facility)

A line slip is a framework agreement negotiated between a broker and a group of insurers, typically at Lloyd's or in similar markets, which sets in advance the terms, rates and limits applicable to a homogeneous class of risks, for instance small marine policies or standardized property risks. Once the line slip is in place, the broker can directly place individual risks that fall within its scope, allocating each one among the signing insurers according to shares agreed in advance, without going through a full negotiation for every policy, which sharply cuts placement time for large volumes of similar small risks. The mechanism differs from full delegated underwriting authority granted to a managing agent in that the broker here acts on behalf of the placed insureds, within limits set by the insurers themselves, under their continuous oversight and with a right of withdrawal at any time; it remains a market-efficiency tool rather than a durable transfer of authority, unlike a managing general underwriter mandate, which delegates broader and longer-lasting autonomy.

A broker places dozens of similar small marine policies every month. Rather than renegotiate each one, it relies on a line slip agreed with a group of insurers, which has pre-set rates and limits for that class of risk.

line slip, facilité de placement, binding facility