To: The Authority
Dear Sirs
Agreement dated [ ] entered into between [ ] Limited ("Sub-hubco") and [ ] (the "Authority") (the "Agreement")
1 We refer to the Agreement. Unless the context otherwise requires, terms defined in the Agreement shall have the same meaning in this letter.
2 We act as insurance broker to Sub-hubco in respect of the Insurances and in that capacity we confirm that the Insurances which are required to be procured pursuant to Clause 53 and Schedule Part 15 of the Agreement:
2.1 where appropriate name you and such other persons as are required to be named pursuant to the Agreement for their respective interests;
2.2 are, in our reasonable opinion as insurance brokers, as at today's date, in full force and effect in respect of all the matters specified in the Agreement; and
2.3 that all premiums due to date in respect of the Insurances are paid and the Insurances are, to the best of our knowledge and belief, placed with insurers which, as at the time of placement, are reputable and financially sound. We do not, however, make any representations regarding such insurers' current or future solvency or ability to pay claims; and that
2.4 the endorsements set out in Section 3 (Endorsements) of Schedule Part 15 (Insurance Requirements) of the Agreement are as at today's date in full force and effect in respect of the Insurances.
3 We further confirm that the attached cover notes confirm this position.
4 Pursuant to instructions received from Sub-hubco and in consideration of your approving our appointment [or continuing appointment] as brokers in connection with the Insurances, we hereby undertake in respect of the interests of the Authority in relation to the Insurances:
4.1 Notification Obligations
4.1.1 to notify you at least 30 (thirty) days prior to the expiry of any of the Insurances if we have not received instructions from Sub-hubco to negotiate renewal and in the event of our receiving instructions to renew, to advise you promptly of the details thereof;
4.1.2 to notify you at least 30 (thirty) days prior to ceasing to act as brokers to Sub-hubco unless, due to circumstances beyond our control, we are unable to do so in which case we shall notify you as soon as practicable; and
4.1.3 to pay into the Insurance Proceeds Account without set off or deduction of any kind for any reason all payments in respect of claims received by us from insurers in relation to the Insurances specified in Clauses 30.1 to 30.3 of the Agreement.
4.2 Advisory Obligations
4.2.1 to notify you promptly of any default in the payment of any premium for any of the Insurances;
4.2.2 to notify you if any insurer cancels or gives notification of cancellation of any of the Insurances, at least 30 (thirty) days before such cancellation is to take effect or as soon as reasonably practicable in the event that notification of cancellation takes place less than 30 (thirty) days before it is to take effect;
4.2.3 to notify you of any act or omission, breach or default of which we have knowledge which in our reasonable opinion may either invalidate or render unenforceable in whole or in part any of the Insurances or which may otherwise materially impact on the extent of cover provided under the Insurances; and
4.2.4 to advise Sub-hubco of its duties of disclosure to insurers and to specifically advise upon:
(a) the facts, circumstances and beliefs that should generally be disclosed to insurers; and
(b) the obligation not to misrepresent any facts, matters or beliefs to insurers.
4.3 Disclosure Obligations
4.3.1 to disclose to insurers all information made available to us from any source and any fact, change of circumstances or occurrence made known to us from any source which in our reasonable opinion is material to the risks insured against under the Insurances and which properly should be disclosed to insurers as soon as practicable after we become aware of such information, fact, change of circumstance or occurrence whether prior to inception or renewal or otherwise; and
4.3.2 to treat as confidential all information so marked or otherwise stated to be confidential and supplied to us by or on behalf of Sub-hubco or the Authority and not to disclose such information, without the prior written consent of the supplier, to any third party other than those persons who, in our reasonable opinion have a need to have access to such information from time to time, and for the purpose of disclosure to the insurers or their agents in respect of the Insurances in discharge of our obligation set out at Clause 4.3.1 of this letter. Our obligations of confidentiality shall not conflict with our duties owed to Sub-hubco and shall not apply to disclosure required by an order of a court of competent jurisdiction, or pursuant to any applicable law, governmental or regulatory authority having the force of law or to information which is in the public domain.
4.4 Administrative Obligations
4.4.1 to hold copies of all documents relating to or evidencing the Insurances, including but without prejudice to the generality of the foregoing, insurance slips, contracts, policies, endorsements and copies of all documents evidencing renewal of the Insurances, payment of premiums and presentation and receipt of claims;
4.4.2 to supply to the Authority and/or its insurance advisers (or the Authority's or its insurance advisers' authorised representatives) promptly on written request copies of the documents set out in Clause 4.4.1 of this letter, and to the extent available, to make available to such persons promptly upon the Authority's request the originals of such documents;
4.4.3 to administer the payment of premiums due pursuant to the Insurances such that, in so far as we hold appropriate funds, all such premiums shall be paid to insurers in accordance with the terms of the Insurances;
4.4.4 to administer the payment of claims from insurers in respect of the Insurances (the "Insurance Claims") including:
(a) negotiating settlement of Insurance Claims presented in respect of the Insurances;
(b) collating and presenting all information required by insurers in relation to Insurance Claims presented in respect of the Insurances, and
(c) insofar as it is relevant and practicable, liaising with and reporting to each Authority throughout the settlement, payment and administration of such Insurance Claims.
4.4.5 to advise the Authority promptly upon receipt of notice of any material changes which we are instructed to make in the terms of the Insurances and which, if effected, in our opinion as Insurance Brokers would result in any material reduction in limits or coverage or in any increase in deductibles, exclusions or exceptions;
4.4.6 to advise the Authority in advance of any change to the terms of, or any lapse, non-renewal and/or cancellation of any policy maintained in respect of the Insurances;
4.4.7 to use our reasonable endeavours to have endorsed on each and every policy evidencing the Insurances (when the same is issued) endorsements substantially in the form set out in Section 3 (Endorsements) to Schedule Part 15 (Required Insurances) of the Agreement; and
4.4.8 to provide, prior to the Commencement of the Operational Insurances and prior to each renewal of any of them, a statement containing
a. the information required to satisfy the requirement of Section 4 of Schedule Part 15 (Insurance Requirements) to the Project Agreement; and
b. our opinion, supported by appropriate evidence, of the generally prevailing market for the relevant Insurance and of any other circumstances relevant to the application of paragraph 3.2 of Section 6 (Pass Through Costs) of Schedule Part 14 (Payment Mechanism) to the Project Agreement to the premiums for the relevant Insurance specifying the impact of each factor on the premium quotations obtained.
5 NOTIFICATION DETAILS
Our obligations at Clause 4 of this letter to notify or inform you shall be discharged by providing the requisite information in hard copy to: [Authority]
6 We shall supply further letters substantially in this form on renewal of each of the Insurances and shall supply copies of such letters to those parties identified to us by the Authority for such purposes.