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FAQs

These questions have been tailored to common queries we receive from the market. If you have a question that is not answered in the FAQs please contact us.

Any managing agent that is meeting their expected maturity rating under Principle 5, Customer Outcomes will be eligible for continuous contracts. Lloyd’s would expect that any managing agent wishing to enter into a continuous contract would be aware of their eligibility prior to starting this process with a broker.

Coverholder Appointment Agreements placed via Lloyd’s Europe are currently not eligible for continuous contracts. Lloyd’s Europe are currently working on this and are aiming to come on board in 2023.

Any users that wish to use Delegated Data Manager (DDM) for their continuous contract will need to manually renew the contract each year to ‘transfer’ them to the next Year of Account.

Initially, when the contract data of a continuous contract transfers from Delegated Contract and Oversight Manager (DCOM) the expiry date will automatically default to 31/12/2099. At each Year of Account transfer the expiry date will need to be changed to the next corresponding year. Currently, DDM does not permit a single UMR to apply to multiple Years of Account. As such, if managing agents have adopted a single UMR to be used throughout the continuous contact lifecycle, then they will need to add a ‘suffix’ at the end of the UMR. For example an ‘a’, ‘b’, ‘c’ for each subsequent year or ‘22’, ‘23’. Please note the combined UMR and suffix can be no longer than 17 characters.

Currently, continuous contracts are only in scope for singleton contracts, contract supported by a single managing agent. Lloyd’s will engage with the market to consider solutions for the additional operational and compliance issues that subscription agreements will bring.

The contract should include adequate intervention and termination provisions that allow either party to serve notice of the agreement, this should be agreed between the parties before entering into the contract.

Yes, these contracts will be in scope for Faster Claims Payments.

Endorsements will be handled in the same manner they are handled for standard binding authority agreements. Endorsements will be allocated in a Year of Account (YoA) basis which will coincide with the calendar year.

The contracts are continuous but will need to run on a Year of Account (YoA) basis for operational purposes. The annual transfer of the continuous binding authority to the following year of account will take place as at 1 January each year. Continuous binding authorities that commence mid-year will also transfer at 1 January and therefore the initial year of account period could be less than a full 12 months.

This means that the bordereaux should be split out on a YoA basis, which will correspond to the calendar year. Declarations will each attach to a YoA depending on when it incepts. Managing agents should ensure that operational processes are in place that continues to ensure premium and claims are allocated to the correct year of account. Any profit commission calculations should be calculated to correlate with each annual period.

A Mid-term Broker Change can be enacted on a Continuous Contract. Should this arise, the broker should contact Lloyd’s (Market Support) to ensure this is captured correctly on DCOM.

There will be no change to coverholder audits. The audit process will continue to link in with advancements made to this process.

Currently, continuous contracts are only in scope for singleton contracts. Lloyd’s will engage with the market to consider solutions for the additional operational and compliance complexities that subscription agreements will bring.

Continuous contracts are aimed at those coverholders that deliver consistent, profitable and compliant business and which provide good value to policyholders. It is down to the managing agent’s own discretion and assessment to decide which coverholders are suitable partners for a continuous contract.

Until further notice any managing agent who wishes to enter into a continuous contract should inform Lloyd’s coverholders@lloyds.com so we can support and monitor proper implementation as well as market adoption during the initial period.

There is no change required to the declarations. The continuous contract permits an improved process between the coverholder and managing agent, there is no impact on the declaration.

For any contracts you would like to consider please contact us (coverholders@lloyds.com) . At the moment we are considering all classes in scope but as we progress with this initiative there may be a few classes that become out of scope.

Continuous contracts allow managing agents greater autonomy to manage continued due diligence in alignment with their internal risk assessment. The oversight of the contract will be up to each managing agent to design and implement. Internal controls should improve the oversight of binding authority agreements as the performance and due diligence will be monitored on an ongoing basis, as opposed to at the annual review only. For more information please visit the Oversight & compliance page.

When a contract is registered as a continuous contract on DCOM, the contract will automatically transfer to the next Year of Account each year at 1/1. Based on the original Underwriting reference(s) that has been input, DCOM will automatically assign the next Year of Account as the next Underwriting reference. Please refer to this Knowledge Article for more information.

Continuous contracts facilitate long term relationships. In a similar way that managing agents maintain long standing relationships with their business partners throughout the year, committing to a continuous contract allows all parties to benefit from the advantages that come with this and remove the link from oversight and compliance to the annual renewal. Should there be any changes to capacity or appetite and the agreement needs to come to an end, the termination provisions in the contract should be triggered.

ATLAS will not have any additional functionality for continuous contracts, managing agents can use DCOM to monitor their live binders. For more information on oversight please refer to this guidance.

Claims will need to be allocated on a YoA basis, which will align with a calendar year. Within a single UMR there will be multiple YoA which will provide a clear parameter for all contracts for the administration of claims.