Annual Report 2008

Policy on service agreements and their termination

The Group does not offer service agreements with notice periods in excess of six months, except in the case of executive directors of the Company and the most senior level of management when up to a 12 month notice period may apply. The Company is mindful of the need to balance the potential contractual advantages of longer notice periods against the potential cost in the event of termination at the Group’s initiative.

In cases of early termination by the Group, the Company seeks to observe the guidance on best practice issued in December 2002 by the Association of British Insurers and the National Association of Pension Funds. In such circumstances, the Group seeks to reduce, where practicable, the compensation payable by taking account of the duty of the employee to mitigate his or her loss. In particular, consideration is given to structuring a proportion of termination payments on a phased payment basis pending the executive finding new employment. The need to take a robust view in settling cases involving poor performance is also recognised.

Details of each executive director’s service contract applicable during the year are set out in the section entitled ‘Executive directors’ service contracts’.

Policy on outside appointments

The Company’s policy is to allow executive directors and other appropriate senior employees to accept one substantive non-Amlin related outside non-executive appointment, subject to permission being obtained in each case and to acceptable procedures for managing any potential conflicts of interest. Such appointments are in the public interest and can often provide useful experience for the executive concerned. Suitable outside appointments, including limited term secondments, relating to Amlin’s business, such as to Lloyd’s bodies, are encouraged on the additional ground that such appointments are often directly in the Company’s interest. Fees from outside appointments related to Amlin’s business are generally payable to the Group rather than retained by the employee concerned. In other cases, the Committee has a policy that the first £25,000 per annum of such fees earned are retained by the employee, with any balance above that level being shared equally between the director, or employee, and the Group.

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