Delegated Claims Administrators

Under the amended Intermediaries Byelaw third party firms that have authority to determine claims need to be approved. Determining claims means to (i) accept or deny a claim in whole or in part; (ii) agree any amount payable; or (iii) resolve finally any open matter by agreement or, if necessary, dispute resolution.

The definition includes firms that have authority to make the decision to provide assistance to the policyholder, for example under travel or health insurance.

The definition applies regardless of the class of business or how the risk was written. It therefore includes, for example, DCAs appointed under line slips, group policies and any open market business. It also includes firms appointed in a delegated lead role.

The activities carried out by firms appointed only to receive first notification of loss, or to advise on coverage or quantum, are not included in the definition and these firms do not require Lloyd’s approval to be appointed. Managing agents should nonetheless carry out appropriate due diligence on any firm with a role to play that impacts the claims service.

Law firms do not need to be approved even if they undertake the role of a DCA and have authority to determine claims. They are excluded from the DCA approval requirements under the Intermediaries Byelaw. Law firms acting in the capacity of a DCA (ie they have authority to determine a claim) should, however, be registered with Lloyd’s by sending the name and address of the firm to delegatedauthorities@lloyds.com. Law firms that wish to can apply to be approved as DCAs and will receive the benefit of being a DCA, including ongoing compliance oversight checks from Lloyd’s.

An approved DCA can only sub-delegate its authority to determine claims if the managing agent agrees to this and Lloyd’s gives its prior approval. Requests to Lloyd’s for permission to sub-delegate will be considered on a case by case basis. In most cases, DCAs will only be permitted by Lloyd’s to sub-delegate to another approved DCA or to a law firm. If the sub-delegation is agreed, a written Delegated Claims Administration Agreement must be in place between the DCAs.

Coverholders that are to be given claims authority in respect of risks that they write under a binding authority are excluded from the DCA approval requirements. Any approval for claims handling authority will be dealt with as part of the coverholder approval process. However, once the Delegated Compliance Oversight Manager is operational, the coverholder due diligence and approval processes supported by that system will include the same claims due diligence questions as the DCA due diligence questionnaire, where the coverholder is to have claims handling authority. This will not be before the second half of 2021.

If a coverholder is to be appointed to determine claims notified to policies not written by that coverholder, they will be subject to the DCA framework from 30 September 2020.

Managing agents should always carry out their own assessment as to the capabilities of a DCA to service a managing agent’s book of claims before appointing them, in accordance with Lloyd’ Minimum Standards.

If the DCA that the managing agent wishes to appoint has already been approved by Lloyd’s and the DCA has provided to Lloyd’s the standardised due diligence information as part of the approval process, the managing agent should request this due diligence information from Lloyd’s and base its decision on this information. Managing agents should avoid supplementing the due diligence obtained as part of the Lloyd’s approval process with their own additional requirements. The information available from Lloyd’s will include an indication of the answers provided by the DCA which indicate increased risk.

If a managing agent wishes to appoint a DCA that has been grandfathered and Lloyd’s does not hold the standardised due diligence information for that DCA, the managing agent should request appropriate due diligence information from the DCA,

Once the managing agent has assessed the claims due diligence information and decided that it does wish to appoint a previously approved DCA, the managing agent should inform Lloyd’s by emailing delegatedauthorities@lloyds.com so that this relationship can be recorded by Lloyd’s.

For every DCA that is captured in the DCA Register, there is a record of which managing agents have a relationship with that DCA. When a managing agent is no longer using the services of a DCA, the ending of that relationship is recorded. If, as at 30 September 2020, no managing agents are using the services of a DCA that had been previously notified to us, that DCA will not be grandfathered.

The Insights Hub is available via Lloyds.com to managing agents that have signed up to it, which most managing agents have. If you as an individual do not yet have access, please ask your organisation’s user administrator to provide you with this access. Please email InsightsHub@Lloyds.com if you don’t know who your user administrator is.

The DCA Directory, in the Reference Data section within Data Feeds, provides a list of all approved DCAs.

Also available in the Data Feeds section in the Insights Hub are DCA binder details which provide, for each managing agent a list of the DCAs that that managing agent has appointed under binding authorities. This information is provided at binding authority level.

You may use the Lloyd’s Delegated Claims Administrator logo for promotional material: for instance on your website homepage, corporate letterheads, and publications. It may also be used when promoting claims services provided to Lloyd’s policyholders. Detailed guidelines for use of the logo and including guidance for how DCAs can refer to their relationship with Lloyd’s are available via https://www.lloyds.com/conducting-business/requirements-and-standards/lloyds-brand/brand-guidelines and master artwork files of the logo can be requested via marketing@loyds.com.