Reinsurance slip

A reinsurance slip, or placing slip, is the document on which a reinsurance placement is concluded. It summarizes the risk, the structure, the period, the premium and the principal clauses; each reinsurer writes on it the share it accepts, then authenticates it with its stamp and initials. It runs to a few pages where the wording runs to dozens, and that is what makes it the instrument of the subscription market: a broker walks one document round the underwriters, and each sees what the previous ones have taken. The leader sets the terms and the followers align. The written line can be signed down when the placement is oversubscribed, and the signed line is then what binds. In London, in both insurance and reinsurance, the slip has taken the standard form of the Market Reform Contract (MRC), a product of the contract certainty reforms: fixed sections for risk details, information, security details, the subscription agreement and broker remuneration, which electronic placing platforms carry over unchanged. It solves the problem of assembling a panel quickly. Gathering twenty reinsurers on a complete contract would take months, while a slip lets a placement close in days. It is often confused with a cover note, which confirms that cover is in place without settling every term, and with the wording, which is the full contract. Its brevity is also its weakness, since it leaves out everything that will decide a dispute. Hence the contract certainty requirement: the full wording must be agreed before inception, not months after the slip is signed.