Lloyd’s believes that it is appropriate for managing agents who can demonstrate that they are capable of effectively managing their delegated authority arrangements to grant continuous binding authority contracts where they think appropriate. 
For this reason, Lloyd’s agreement to managing agents granting continuous contracts is dependent on the managing agent meeting the Customer Outcomes Principle. By meeting that principle the managing agent will have demonstrated that it has suitable processes to manage its delegated authority arrangements. The effective management of continuous contracts should therefore support better ongoing oversight and management.
Where managing agents choose to enter into continuous binding authorities, they should:
- Only make them available for coverholders who can demonstrate consistent sustainable performance, meet the standards expected and demonstrate they provide value in the distribution chain
- Ensure that the coverholder’s commission and fee arrangements under the binding authority will actively promote commercial alignment between the coverholder and the managing agent
- Ensure premium and claims are allocated to the correct year of account; and
- Ensure that oversight and management of the facility is continuous and not linked to the annual transfer/re-signing process
 Managing agents may wish to retain annual or the existing multi-year contracts.
For these reasons the following important guidelines must be applied –