1. Subject to the following provisions of this [Syndicate Pre-Emption part of the Consolidated Requirements], if a managing agent proposes to increase the syndicate allocated capacity of a syndicate managed by it for the succeeding year of account it shall offer to each qualifying member (as defined in [2. below]) the opportunity to increase his member’s syndicate premium limit for that year of account by an amount equal to A x X , where
Y
A = the amount of the proposed increase in the syndicate allocated capacity
X = his member’s syndicate premium limit for the current year of account
Y = the syndicate allocated capacity for the current year of account
rounded to the nearest integral multiple of £1 (such amount being referred to as his ‘‘pre-emptive entitlement’’).
2. For the purposes of this paragraph a ‘‘qualifying member’’ is:
(a) a person who is a member of the syndicate for the current year of account, other than:
(i) a person who has ceased, other than by reason of death, to be a member before the date on which any offer is made under this paragraph;
(ii) subject to [3. below], a person who participates in the syndicate through a MAPA, unless before the date on which any offer is made under this paragraph that person has given notice under clause 3.6 of the agreement between him and the operator of the MAPA in the terms of the standard members’ agent’s agreement electing to terminate his participation in the MAPA with effect from the end of the current year of account and to continue to participate in the relevant syndicate for the succeeding year of account otherwise than through the MAPA;
(b) a person in whose favour a nomination has been made in respect of the relevant syndicate; and
(c) a person who by auction has become entitled to participate in the syndicate for the succeeding year of account.
3. Where a person participates in a syndicate both through a MAPA and otherwise, this paragraph applies to him only in respect of his participation otherwise than through the MAPA.
4. Where a person has ceased to be a member of the syndicate for the current year of account before the date on which any offer is made under this paragraph by reason of his death, the rights conferred by this byelaw may be exercised by or on behalf of the member’s estate by his personal representative or such other person as may be duly authorised by law to act on behalf of the member’s estate.
5. Subject to [6. below], no managing agent shall increase the syndicate allocated capacity of a syndicate managed by it for the succeeding year of account without complying with the requirements of this byelaw.
6. The Council may permit a managing agent to increase the syndicate allocated capacity of a syndicate without complying with any or all of the requirements of this byelaw, subject to such conditions as the Council may impose.
7. A managing agent which does not propose to increase the syndicate allocated capacity of a syndicate managed by it for the succeeding year of account shall not later than the prescribed date give notice of that fact to every members’ agent under arrangements made by or through the agency of which any underwriting member participates in the syndicate for the current year of account, to every member in relation to which no members’ agent acts as such in relation to that syndicate for that year of account and to the Society.
8. Where there are two syndicates being operated concurrently and one of the syndicates includes individual members (referred to for the purposes of this [‘Obligation to make pre-emption offer’ section] and paragraph [6. in Consolidated Requirements Part 2 > General Operational Matters > Syndicate Pre-emption > Reductions in syndicate capacity made by the managing agent] as an ‘‘ongoing natural syndicate’’) and the other syndicate consists of a single corporate member (referred to for the purposes of this [‘Obligation to make pre-emption offer’ section] and paragraph [6. in Consolidated Requirements Part 2 > General Operational Matters > Syndicate Pre-emption > Reductions in syndicate capacity made by the managing agent] as a ‘‘parallel syndicate’’) then in the case of the ongoing natural syndicate the amount of the pre-emptive entitlement shall be calculated on the footing that:
(a) item Y in the formula set out in [1. above] is equal to the aggregate of the syndicate allocated capacity of the ongoing natural syndicate and the parallel syndicate for the current year of account; and
(b) item A in that formula is the amount by which the aggregate of the proposed syndicate allocated capacity of the ongoing natural syndicate and the parallel syndicate for the succeeding year of account exceeds item Y.