2.1 This procedure shall be used to determine whether the Board shall bear any increase or benefit from any decrease in Relevant Insurance costs.
2.2 Project Co's insurance broker shall prepare a report on behalf of both Project Co and the Board (the Joint Insurance Cost Report). The Report is to be prepared at Project Co's expense, and should, as a minimum, contain the following information for the relevant Insurance Review Period:
2.2.1 A full breakdown of the Actual Relevant Insurance Cost;
2.2.2 A full breakdown of the Base Relevant Insurance Cost;
2.2.3 A spreadsheet (the Insurance Summary Sheet) detailing separately:-
2.2.3.1 the sum(s) insured / limit of indemnity (ie rateable factor) for each of the Relevant Insurances;
2.2.3.2 the premium rate for each of the Relevant Insurances;
2.2.3.3 the net premium paid (or to be paid) for each of the Relevant Insurances (ie excluding both insurance premium tax and brokers fees and commissions);
2.2.3.4 the deductible(s) for each Relevant Insurance;
2.2.3.5 details of any claims (paid or reserved) (including incident date, type and quantum) in excess of £[ ], being the amount stated in Clause 36.17;
2.2.4 An assessment and quantification of each Project Insurance Change together with the reasons therefore;
2.2.5 Full details of any Portfolio Cost Saving;
2.2.6 Any other reasons that Project Co believes may have caused a change (by way of increase or decrease relative to the Base Relevant Insurance Costs) in the Actual Relevant Insurance Cost;
2.2.7 The opinion of Project Co's insurance broker as to the reasons why the Actual Relevant Insurance Cost has varied from the Base Relevant Insurance Cost, specifying the impact of each of the factors and quantifying the amount attributable to each factor specified above;
2.2.8 The calculation of the Insurance Cost Differential and any Exceptional Cost or Exceptional Saving arising from this calculation; and
2.2.9 Evidence satisfactory to the Board (acting reasonably) of any changes to circumstances generally prevailing in the Relevant Insurance Market that are claimed to account for the Insurance Cost Differential
2.2.10 Details of movements in the CBS Private Capital non marine index plus, if available from other appropriate sources, details of changes in insurance cost across the PFI market as a whole.
2.3 Project Co shall procure that the Broker, no later than the date which is ten (10) Business Days after the Insurance Review Date, delivers to the Board, at the same time as it delivers to Project Co, at least two copies of the Joint Insurance Cost Report. At the same time Project Co should send a copy of the Insurance Summary Sheet to HM Treasury private finance unit or its nominee. Following receipt of the Joint Insurance Cost Report, the Board shall notify Project Co in writing within fifteen (15) Business Days whether or not it accepts the Joint Insurance Cost Report including full details of any disagreement161. If the Board does not provide such notification and/or details of any disagreement to Project Co within fifteen (15) Business Days, the Board shall be deemed to have accepted the Joint Insurance Cost Report. If the Board disagrees with any item in the Joint Insurance Cost Report, the Parties shall use their respective reasonable endeavours acting in good faith to agree the contents of the Joint Insurance Cost Report162. If the Parties fail to agree the contents of the Joint Insurance Cost Report within thirty five (35) Business Days from the date it was delivered to the Board, the matter shall be resolved pursuant to Part 26 of the Schedule (Dispute Resolution Procedure), provided always that references in Part 26 of the Schedule to an expert shall be construed as references to an independent insurance expert agreed by the Parties or, in the absence of agreement, appointed by the President for the time being of the Chartered Institute of Arbitrators.
2.4 The Board may make the Joint Insurance Cost Report available to any of its or HM Treasury's agents or advisers or other body or bodies nominated by HM Treasury for insurance cost verification, benchmarking or similar purpose.
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161 The Board should consider employing the services of a fully 'independent' insurance advisor to confirm the accuracy of the information in the Joint Insurance Cost Report.
162 This may involve observing how insurance costs have changed during the same period across a representative sample of PFI projects from all of the PFI sectors. Such information is likely to be available from a number of sources. The collation of Insurance summary Sheets centrally should facilitate this exercise.