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Delegated Authorities - Coggle Diagram

- - - - Roles/Responsibilities
        
        Contracting on behalf of the members of Lloyd’s when binding risks and issuing contractual documents.
        
        Collecting premiums and handling claims.
        
        Lloyd's Brokers sometimes are coverholder, which could cause conflict of interest.
      - Coverholder Approval Process (limited to their own territory
        
        Application
        
        made via Atlas online system, accessible by Managing Agents, Lloyd’s Brokers, Coverholders and Lloyd’s. Supported by relative Broker or MA in DDMA relation
        
        Atlas: Atlas is an online market system for the storage of information about coverholders. (CH's records and files). Manage the approval of authority for coverholder applications
        
        Atlas allows
        
         Annual compliance questionnaire; and
        
         Changes to company information and permissions.
        
         New Coverholder applications;
        
        Supportive Docs
        
        Full Coverholder Application Decision Paper
        .....P15
        
        The decision paper covers the following areas:
        
        Overview of application (including Managing Agent Rationale);
        
        Company information including legal name and structure;
        
        Underwriting and claims authority levels;
        
        Business strategy and distribution channel;
        
        Ownership;
        
        Principal staff and reputation;
        
        Professional Indemnity (“PI”) coverage;
        
        Financials;
        
        Bank accounts;
        
        Systems and controls;
        
        Licences;
        
        Class of business; Regions.
        
        Review
        
        Lloyd’s DAT will assess the information
        
        Ongoing Compliance Oversight
        
        Lloyd’s DAT will centrally collate and perform a limited review of the Coverholder’s core entity level compliance information, including financial statements, PI details and certain entity level procedure documentation.
        
        CH 有Branch/子公司/姐妹公司/员工在其他辖区的情况
      - Discretion Level
        
        Full coverholder (or full authority coverholder) – granted full authority to set rates (subject to certain minimum rates,) and gives the coverholder underwriting discretion and the ability to increase rates without the need to refer to the underwriter.
        
        Pre-determined rates – here the coverholder may only be given underwriting authority via a rating guide or range from which rates can be taken; the coverholder only has the authority to exercise limited underwriting discretion
        
        No discretion – the coverholder may have to follow a fixed rating table or guide; coverholders do not have any underwriting discretion, save for amending certain terms or conditions
        
        Prior submit – this is the most restrictive of all authorities, since each and every risk must be seen by the coverholder and must be referred to the lead underwriter; this includes renewals as well. Therefore, a risk may only be bound once it has been seen by the lead underwriter.
- - - - Line Slip - MA to MA or insurance cm (named slip leader)
        
        MA把自己下面辛迪加的业务授权给其它MA或者保险公司
        
        A line slip is an agreement by which a Managing Agent delegates its authority to another Managing Agent or authorised insurance company in respect of business introduced by a Lloyd’s Broker named in the agreement 2.
        
        Under a line slip, authority is sometimes given to the Lloyd’s Broker to ‘hold cover’ on behalf of Underwriters.
        
        a line slip will apply to a specific type of business, e.g. a marine cargo line slip.
        
        Under bulking line slips the individual risks are grouped and processed via Xchanging as bulk transactions using a Market Reform Contract line slip with a Unique Market Reference (UMR). The broker prepares bordereaux in accordance with the line slip terms and conditions, which, amongst other things will specify the premium bordereaux intervals.
        
        Under non-bulking line slips the individual risks are processed separately by the broker, as if they were being dealt with on an ‘open market’ basis. The Market Reform Contract line slip is used; declarations off the line slips follow the Market Reform Contract Open Market guidelines, although bordereaux are not normally created. Premium payment terms will be specified for each declaration.
      - Consortium Arrangements
        MAs to one MA
        
        A consortium is a contractual arrangement under which one or more Managing Agents delegate(s) authority to another Lloyd’s Managing Agent (“the Consortium Leader”)
      - Binding authority agreement
    - - Delegated Authority Minimum Standards (MS1.3)
        
        part of the Minimum Standards for Underwriting Management
        
        Principle applied in the Minimum Standards for Delegated Authority is that Managing Agents will have “effective systems and controls wherever underwriting authority has been delegated to another entity”.
        
        Effective system & Controls
        
        Clearly documented strategy and procedures for writing and managing delegated authority business;
        
        Minimum Standard UW 1.3.1 - Strategy and Procedures for Delegated Authority Business
        
        Lloyd’s expects Managing Agents to have a clearly defined strategy and documented procedures, agreed at Board level, for managing all of its delegated authority arrangements, including binding authorities, line slips and consortium arrangements.
        
        MA needs to provide a written strategy and procedural document
        
        Executive Summary
        
        An overview of the Managing Agent’s current position on writing binding authorities, line slips and consortium arrangements, together with an outline of the objectives for the year ahead.
        
        Business rationale
        
        An explanation as to why the Managing Agent wishes to delegate its authority.
        
        Roadmap
        
        Underwriting Plan
        
        Thorough due diligence of Coverholders to which a Managing Agent proposes to delegate authority;
        
        Minimum Standard UW 1.3.2 – Due Diligence of Coverholders (renewal, ongoing due diligence)
        
        Internal Assessment Process
        
        Suitability Criteria
        
        3 more items...
        
        Coverholder’s Business/Underwriting Plan
        
        Covered in MA's Decision Paper
        
        The Coverholder’s Reputation and Standing
        
        The Coverholder’s Financial Standing
        
        Financial Crime
        
        The Coverholder’s Regulatory or Licensed Status
        
        Adequacy of the Coverholder’s PI Coverage
        
        Coverholder should have "adequate professional indemnity insurance
        
        Contracts for delegated authority in place with each third party to which a Managing Agent delegates authority; and
        
        Minimum Standard UW 1.3.3
        
        Delegated Authority Contracts
        
        Managing Agents should ensure that there is a contract certain delegated authority contract in place with each party to which it delegates authority, prior to inception of the arrangement.
        
        All Contracts of Delegated Authority
        
        Limits on Premium Incomes
        
        1 more item...
        
        Financial Crime
        
        1 more item...
        
        Termination Provisions
        
        1 more item...
        
        Jurisdiction and Choice of Law
        
        1 more item...
        
        Contracts with Multiple Sections with Different Leads
        
        Preparation
        
        LMG (London Market Group) template and guidance. The LMG has issued a set of placing standards known as MRCs. Lloyd’s has mandated that these standards must be followed when drafting binding authority and line slip agreements.
        
        LMA (Lloyd's Market Association)
        
        Processing DA Contract
        
        Binding Authority
        
        Premium Settlement
        
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        Insurance Monies
        
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        Internet Selling
        
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        Using Lloyd’s Name
        
        Hold Harmless Clauses
        
        Line Slips and Consortium Arrangements
        
        Proactive management of delegated authority contracts once incepted.
        
        Monitoring
        
        Minimum Standard UW 1.3.4 – Management and Monitoring of Delegated Authorities
        
        Managing Agents, lead or follow, should monitor the performance of all Coverholders to whom they have delegated authority as well as monitoring the delegation of authority to another Managing Agent or insurance company under either a line slip or a consortium arrangement.
        
        Internal Resources
        
        A Managing Agent must retain the necessary expertise to supervise delegated authority contracts effectively and manage the risks associated with these.
        Have skills, procedures and reporting structure in place
        
        Management Oversight and Key Performance Indicators
        
        Managing Agents are expected to be able to demonstrate their oversight of delegated authority arrangements including reporting to the Managing Agent’s Board on a regular basis.
        
        KPIs allow them to monitor their controls and processes for delegated authority
        
        Efficient Record Keeping
        
        Managing Agents are expected to keep adequate records of all delegated authority contracts they lead.
      - DA 有claim的义务
        
        Lloyd’s Claims Management Principles and Minimum Standards
        
        require disciplined procurement and proactive management procedures in the selection and use of third parties to whom claims handling authority is delegated.