Members of the scheme participate in the underwriting of large commercial fire risks (with a minimum premium of £50,000 or more) which are co-insured amongst a number of insurers. Usually the insurer at the top of the schedule – the lead insurer – will do all the administration for a particular risk. In recognition of this, the remaining co-insurers – the follow offices – agree to pay a proportion (usually around 5%) of the premium they receive in respect of the risk to the lead insurer to cover the work undertaken on their behalf.

FPA act as clearing house for the payments by providing a private and confidential administrative service. FPA receive the appropriate overriding commission payments from follow insurers and forward the relevant payments to the lead office. This is undertaken on a net basis. Those insurers that are net payers will be invoiced by FPA for the net amount of commission due from them, while the remaining insurers, who are net receivers, would receive a settlement from FPA for the net value of commission due, less commission payable.

An annual charge is levied on scheme members for the work undertaken by FPA. The service charge is agreed by the scheme members who comprise the Steering Group that oversees the management of the scheme. The charge is shared by all scheme members on the basis of the number of times their name appears as both a lead and follow office on their finally agreed statement.

Membership is open to any authorised insurer that undertakes to adhere to the scheme procedures.

                            
A major innovation is the move to electronic data submission through a newly-developed web based reporting system. The move to electronic reporting allows an insurer's risk information to be directly entered onto the database from a member’s office. The system allows online agreement of risk details and any queries that arise to be settled quickly between respective members. Scheme members' statements will be agreed on a quarterly basis rather than yearly, as has been past practice. This has an important benefit in that it speeds up agreement of individual member end of year statements allowing invoices to be issued more quickly than in the past. The end result is that member accounts are settled much more rapidly. 

                    
                            

                              

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