Mutually Protected International Limited - Rules
General
Mutually Protected International Ltd (the “Mutual”) is a company limited by guarantee.
The Mutual is governed by its directors (the “Directors”) and is comprised of its members (the “Member” or “Members”), which members pool resources through regular subscriptions to the Mutual so that the Mutual may provide discretionary risk protection cover to the Members.
These rules (the “Rules”) set forth the bases on which membership is offered and risk protection cover is provided to the Members.
The Mutual is not an insurance company and the types of risk protection cover provided by the Mutual are not contracts of insurance. There is no obligation on the Mutual to pay any given claim in respect of any given loss suffered by a Member; as set out further below, the Mutual has an absolute discretion whether or not to pay a Claim and if so in what amount.
Types of Cover
The Mutual provides risk protection cover for its Members in order to off-set or reduce specific business risks faced by the Members. The types of cover provided may include the following: (a) credit risk cover; (b) key person protection cover; (c) cyber risk cover; (d) media liability protection cover; (e) business interruption cover; (f) fraud risk cover; (g) terrorist activities cover; (h) supplier failure cover; and (i) employer’s liability cover.
The types of cover provided by the Mutual are subject always to available resources. The Mutual shall not be obliged to provide any type of cover, and shall be entitled to modify, withdraw or alter any type of cover from time to time as it sees fit, in its sole and absolute discretion, upon notice to the Members.
Membership
Membership in the Mutual is open to any body corporate (identified as such on a public register) which, in the normal course of its business, has a genuine commercial need for the types of risk protection cover offered by the Mutual.
Membership is by way of application to the Mutual (in the prescribed form). The Mutual reserves the right to require a risk assessment undertaken by the Mutual as a condition to becoming a Member (or remaining a Member).
Approval for membership is a matter for the sole and absolute discretion of the Directors of the Mutual.
In the event that the application is successful and the applicant becomes a Member, the Directors, in their sole and absolute discretion, shall set the level of subscription to be paid by the Member. Such subscription shall not exceed 40% of the annual gross sales revenue of the Member’s business and is to be paid annually or, if agreed by the Mutual, in periodic instalments.
The annual subscriptions to be made by the Member and the particular cover provided to the Member and a general description of such cover will be set forth in a “Schedule of Cover”, a copy of which shall be issued to the Member.
Cover will be provided to the Member in accordance with the Schedule of Cover and in accordance with the terms set forth in these Rules.
The Fund
The Mutual shall establish and maintain a fund, or separate funds (the “Fund”). The Fund shall comprise Member subscriptions and investment returns on those subscriptions.
The Fund shall be managed by the Directors. The Directors shall hold, manage, lend and invest all or part of the Fund for profit as they see fit (the “Investment Services”). Such Investment Services shall aim to earn a reasonable return on monies in the Fund from time to time for the benefit of the Members, but no particular investment return is guaranteed.
At their discretion, the Directors may retain a management company (the “Managers”) to perform the Investment Services, to manage the Fund, and to administer and pay claims (as to which see below). The Directors shall pay the Managers reasonable fees and expenses, as determined by the Directors, on terms agreed between the Directors and the Managers (the “Management Fees”). The Mutual will also incur from time to time necessary and reasonable expenses in order to provide the types of cover, Investment Services, administer the Fund and manage Claims, as determined by the Directors (the “Expenses”). The Management Fees shall be paid from the Fund and the Expenses shall be reimbursed from the Fund, upon demand.
Claims
In the event of a loss covered by any cover to which the Member has subscribed, the Member may submit a claim to the Mutual (in the prescribed form) (a “Claim”) and such Claim will be considered by the Directors (or the Managers) provided always that:
- the Member has no outstanding subscriptions, including from previous years; and
- the Claim is adequately supported by documents and evidence and that any specific information and/or documents requested by the Directors (or the Managers) when assessing the Claim have been provided.
The Mutual has an absolute discretion whether or not to pay a Claim and if so in what amount. Whether or not to pay a Claim, and whether or not to pay a Claim in whole or in part, shall be subject, at all times, to the absolute discretion of the Mutual (and the Directors and the Managers acting for the Mutual).
In the consideration of any Claim, the Directors and/or the Managers shall ensure that a Member is treated fairly but they will also take account of the interests of all of the Members and of the Mutual generally and they shall be entitled to make payment to a Member, or not, as they see fit. The usual approach of the Directors (and the Managers) will be, in any event, not to pay more than the Member’s total available accumulated annual subscriptions paid by the Member during the current year, net of a reasonable proportion of the Management Fees and Expenses.
The Mutual may require the Member to subrogate to it any claim or rights it has against a third party as a condition of payment of a Claim.
Return of Subscriptions
The Directors may, but are not required to, return to a Member all or part of its paid subscriptions and may, but shall not be required to, pay to a Member a pro rata share of any Investment Return or proportion thereof. In the case of subscriptions, where a Member has made no Claim for five (5) consecutive years, the Member may request repayment to it of all or part of its paid subscriptions, net of a reasonable proportion of the Management Fees and Expenses (such to be assessed by the Directors and/or the Managers in their sole and absolute discretion).
Cessation of Membership
A Member shall cease to be a Member:
- forthwith upon written notice from the Mutual if, in the determination of the Mutual, a Claim is made by the Member fraudulently;
- forthwith upon written notice from the Mutual if the Member acts in a manner contrary to the interests of the Members and/or the Mutual;
- if, in the sole discretion of the Directors, the Member has or will bring the reputation of the Mutual and/or the membership into disrepute, forthwith upon written notice from the Mutual;
- if the Member’s risk assessment as determined by the Directors materially changes, forthwith upon written notice from the Mutual; or
- 30 days after receipt by the Mutual of written notification from the Member that it wishes to cease being a Member, such notice deemed to have been received three (3) days after the date upon which it was sent by post or by email to the Mutual.
Miscellaneous
The Mutual shall be entitled to take out and maintain adequate professional indemnity insurance in respect of itself, its Directors and its other personnel, the costs of which shall be included in Expenses.
These Rules may be modified from time to time by the Mutual. Members will be notified of any changes.
These Rules are subject to English law and any dispute hereunder or in connection herewith shall be referred to arbitration in London pursuant to the Arbitration Act 1996 to a sole arbitrator who shall be a King’s Counsel. Where a sole arbitrator cannot be agreed within 14 days of a first written request to so agree, a sole arbitrator shall be appointed by the Chair of the Bar Council UK.
