The London Market utilized a Contract Certainty Code of Practice, which
was created by its Market Reform Group. Essentially, the idea
of contract certainty is that each party will know exactly what the product
is that is being sold at the time it is being sold, so it can be priced correctly
and so the purchaser knows exactly what it is buying without any later misunderstandings.
Now, under contract certainty, terms "to be agreed" have to be agreed by the
inception date of the reinsurance contract. In the United States, contract finality
or certainty has not yet been imposed to the level of the London Market Code
of Practice for Contract Certainty. The 9-month rule, which really comes out
of Part 23 of SSAP 62, requires that the reinsurance contract be finalized—reduced
to written form and signed within 9 months after commencement of the policy
period—but allows the contract to incept before the contract is finalized.