Letter of Authority and Mandate of Lead security

Key definitions

A Letter of Authority (also known as a To Whom It May Concern – Confirmation of Capacity Letter) may be used to confirm that a contract of delegation has been provided to a coverholder, service company or digital platform provider.

Why guidance is needed

To drive consistency within the market and to avoid letters with inappropriate content, Lloyd’s have collaborated with the Lloyd’s Market Association (LMA) to produce model templates that can be used by the market where confirmation that a specific delegated authority arrangement is in place is required.

The templates can be found below.

Templates

Download Letter of Authority – Example

Download Letter of Authority – Lloyd’s Insurance Company (LIC) Example

Considerations for using the templates

These are model templates and it is appreciated that some managing agents may already have their own templates which can still be used.

The templates should be provided on the managing agent’s letter head and signed by the lead managing agent.

Managing agents should ensure that any Letter of Authority issued does not contain any additional or onerous requirements which may impose inappropriate obligations or covenants on the managing agent. For example, this could include confirmations of any future changes to an existing delegated authority agreement and / or providing confirmation of any contract changes or termination status to the coverholder’s introducing intermediaries.

In June 2024 Lloyd’s released a market bulletin communicating new requirements for policy documentation issued under delegated authority agreements. The bulletin details that we expect all delegated authority agreements incepting on or after 1 July 2025 must require that details of the Lloyd’s lead are specified in the policy documentation provided to the insured. To support these new requirements we have created some FAQs in collaboration with the market.

These FAQs will be updated accordingly if any additional questions or topics are raised from the market. Please contact us should you have any questions on this.