1. A managing agent shall not increase the syndicate allocated capacity of a syndicate for a succeeding year of account by more than 7 ½ per cent of the syndicate allocated capacity for the current year of account unless the managing agent has given notice in accordance with [2. below] of its intention to make such an increase and obtained the requisite level of approval of the members of the syndicate for the current year of account within 14 days after the date on which the managing agent gives such notice.
2. Any notice given by the managing agent in accordance with [1. above] shall be given in writing:
(a) in the case of a member (other than a member who participates in the syndicate through a MAPA) who participates in the syndicate under arrangements made by or through a members’ agent, to that members’ agent on his behalf;
(b) in the case of a member who participates in the syndicate through a MAPA, to that MAPA operator; and
(c) in any other case, direct to the member.
3. For the purposes of this paragraph the ‘‘requisite level of approval’’ means the approval of members (excluding those who by auction or by nomination of a successor under clause 11A.2 of a managing agent’s agreement have wholly surrendered their right to participate in the syndicate for the subsequent year of account) whose member’s syndicate premium limits in aggregate are not less than three quarters of the member’s syndicate premium limits in aggregate of those members whose approval or disapproval is notified to the managing agent.
4. A member’s agent which receives a notice under [2.(a) above] shall, forthwith after receipt of that notice, inform the member concerned of that notice and shall seek and give effect to the member’s instructions.
5. A member’s agent which receives a notice under [2.(b) above] may in its absolute discretion either approve or disapprove of the proposed increase notified to it without being obliged to consult or comply with the instructions of any member of the MAPA.
6. For the purposes of this paragraph an approval or disapproval may be given:
(a) in the case of a member who participates in the syndicate otherwise than under arrangements made by or through a members’ agent, by that member; or
(b) in the case of any member (other than a member who participates in the syndicate through a MAPA), through his members’ agent acting on his instructions on his behalf; or
(c) in the case of any member who participates in the syndicate through a MAPA, by the operator of the MAPA.
7. The managing agent shall keep copies of all replies received by it in response to a notice given under [2. above] and furnish them to the Council on request.