All Lloyd’s Coverholders have permissions to conduct business on behalf of Lloyd’s underwriters in their own domicile. A Coverholder proposing to transact insurance business in any country beyond its domicile must first obtain permission to do this.
When extending a Coverholder’s permissions, we consider the country required as part of a region which, once approved, will permit the relevant Managing Agent to grant the coverholder authority to enter into contracts of insurance for all countries in that region.
The binding authority agreement specifies the countries in which the Coverholder is authorised to do business on behalf of the managing agent. Regional approval does not amend the binding authority agreement. Only the Managing Agent can grant authority to a Coverholder (via the binding authority) for a country or countries in which it may do business.
Section 9.1 should specify clearly where the risks will be located (such as property), and 9.2 should state where the insured's will be domiciled. Section 9.3 should be used for where the risks are transient, such as ships, and the relevant areas they can navigate between. Lloyd’s is not authorised to write insurance on a worldwide basis, and even where Lloyd’s is licensed in certain territories there may well be further restrictions on how the business can be accessed by the Coverholder or by Lloyd’s and also what classes of business can be written there as well. The binding authority should not state worldwide for either 9.1 or 9.2, including the use of terms such as “Worldwide ex USVI, Canada, Switzerland”. The only permitted exception to this is where the business being written is Marine Cargo or Space.
Where the business written will be reinsurance, this should be clearly specified within the binding authority and separately identified from any insurance business to be written. For reinsurance business the binding authority may specify worldwide under section 9.1 and 9.2 however the binding authority should not give the Coverholder any authority to write regions which are contrary to the guidance on Crystal. The coverholder will need approval for the specific class of business extension for Reinsurance (World-Wide) on ATLAS.
For Coverholders writing insurance business outside of their own domicile the Coverholder will require permissions on Atlas. These permissions should not be confused with Lloyd’s ability to write business in that country and Crystal should be consulted for any specific guidance on this.