2 Insurance Review Procedure

2.1 This procedure shall be used to determine whether the Authority shall bear any increase or benefit from any decrease in Relevant Insurance costs.

2.2 The Service Provider's insurance broker shall prepare a report on behalf of both the Service Provider and the Authority (the Joint Insurance Cost Report). The Joint Insurance Cost Report is to be prepared at the Service Provider's expense, and should, as a minimum, contain the following information for the relevant Insurance Review Period:

(a) a full breakdown of the Actual Relevant Insurance Cost;

(b) a full breakdown of the Base Relevant Insurance Cost;

(i) the sum(s) insured/limit of indemnity (i.e. rateable factor) for each of the Relevant Insurances;

(ii) the premium rate for each of the Relevant Required Insurances;

(iii) the net premium paid (or to be paid) for each of the Relevant Insurances (i.e. excluding both insurance premium tax and brokers fees and commissions);

(iv) the deductible(s) for each Relevant Insurance;

(d) an assessment and quantification of each Project Insurance Change together with the reasons therefore;

(e) full details of any Portfolio Cost Saving;

(f) any other reasons that the Service Provider 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;

(g) the opinion of the Service Provider'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;

(h) the calculation of the Insurance Cost Differential and any Exceptional Cost or Exceptional Saving arising from this calculation;

(i) evidence satisfactory to the Authority (acting reasonably) of any changes to circumstances generally prevailing in the Relevant Insurance Market that are claimed to account for the Insurance Cost Differential; and

(j) 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 The Service Provider shall procure that the Service Provider's insurance broker, no later than the date which is ten (10) Business Days after the Insurance Review Date, delivers to the Authority, at the same time as it delivers to the Service Provider, at least two (2) copies of the Joint Insurance Cost Report. At the same time the Service Provider 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 Authority shall notify the Service Provider, in writing, within fifteen (15) Business Days whether or not it accepts the Joint Insurance Cost Report including full details of any disagreement. If the Authority does not provide such notification and/or details of any disagreement to the Service Provider within fifteen (15) Business Days, the Authority shall be deemed to have accepted the Joint Insurance Cost Report. If the Authority 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 Report. 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 Authority, the matter shall be resolved pursuant to the Dispute Resolution Procedure.

2.4 The Authority 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.