Insurance Advice in Connection with an IAE Claim

Ofgem require insurance expertise to provide urgent and crucial advice in respect of matters in connection with the offshore transmission insurance market to be determined in relation to any claim for a revenue adjustment claim (an "IAE claim") from an Offshore Transmission Owner ("OFTO"). To make a determination, Ofgem require expert advice on various questions relating to insurance issues pertinent to making this decision. The questions will focus on whether OFTO could have secured LEG3/06 or equivalent insurance protection (defined later in this section) in the worldwide insurance market. The OFTO Licence provides the OFTO with a revenue stream in respect of the offshore transmission system for up to 25 years. That revenue stream includes mechanisms which adjust the OFTO's revenue for certain 'pass-through' items, under Amended Standard Condition E12-J3: Restriction of Transmission Revenue: Allowed Pass-through Items (the Condition). The IAE is one such revenue adjustment mechanism for costs and expenses that have arisen during the revenue term, for example, due to fault or failure of the system (subject to defined pre-requisites), or at the Authority's discretion.