Lloyd’s Coordinated Audits
Lloyd's is dedicated to promoting both high standards and consistency in the audit of its Coverholders and DCAs. To ensure consistency of approach, Lloyd’s has worked with the Market and the LMA to produce a common LMA Coverholder and DCA Audit Scope. Furthermore, Lloyd’s facilitates the coordination of audits on behalf of Managing Agents when there are two or more Managing Agents with a lead binding authority agreement, this minimises the regulatory burden of multiple annual audits for those Coverholders and DCAs with multiple Lloyd's leads. Since 2018, the Lloyd’s coordinated process has been automated via an online platform called Delegated Audit Manager (DAM). The Lloyd’s Audit team oversees on average 800 Coverholder and DCA coordinated audits annually.
Why is a Coverholder / DCA audited and what does it involve?
A risk based approach to auditing helps the Managing Agent ensure that the Coverholder is entering into contracts of insurance in accordance with the binding authority agreement and that the DCA is adjusting claims on behalf of the Managing Agent in accordance with their Service Agreement. An onsite visit by an audit specialist will help to ensure that company policies and procedures provided by the Coverholder / DCA are being adhered to and that the terms of the binding authority agreement are being complied with. Audits will also identify areas where the Coverholder / DCA can reduce risk or improve efficiency.