Continuous contracts

Overview Key definitions Key considerations Continuous Line slips and Consortia Further information

Overview

Continuous contracts are a recognised delegated contract structure within the Lloyd’s market, providing an alternative approach to the traditional annual format.

Lloyd’s supports continuous, alongside annual and multiyear binding authorities. The appropriate contract duration remains a commercial decision between the contracting parties.‑year binding authorities. The appropriate contract duration remains a commercial decision between the contracting parties

This guidance outlines the key considerations managing agents should take into account when entering into such agreements.

Key definitions

Continuous Binding AuthorityA continuous binding authority is a delegated authority agreement that remains in force indefinitely until terminated by one of the parties in accordance with the contractual termination provisions and without the need for annual renewal. The contract is drafted to provide for the annual transfer of the binding authority to the following year of account of the participating syndicate(s).
Multi‑Year Binding AuthorityA multi‑year binding authority is a binding authority agreement that operates for a fixed period, spanning over multiple years of account (YOA) and has a defined end date. These arrangements incorporate the automatic annual transfer mechanism that is found in the continuous contract to annually transfer the binding authority to the following year of account as found in the continuous contract.

Key considerations

Annual transfer 

Despite being ‘continuous’ in nature, these contracts must still allocate premiums and claims on a YOA basis. For this reason there needs to be an ‘annual transfer’, provided in the binding authority, whereby the binding authority is transferred to the following YOA.

There are two recognised methods for administering this:

1.    Calendar year transfer (1 January)

2.    Anniversary based transfer

Please note anniversary based transfers option is only viable when no Consortium and Coverholder (C&C) numbers are being used. More information can be found here.

DCOMWhen registering a continuous contract on DCOM, the continuous field must be selected to ensure the contract is automatically recognised by the system as transferring to each new YOA. DCOM is currently configured to retain a single UMR for the duration of the contract. Managing agents using a different UMR for each year may update the UMR during the contract lifecycle where required as they would for any other contract via the Market Support Centre.
Ongoing commitment Continuous contracts support long‑term partnership arrangements by decoupling oversight and compliance activities from the annual renewal cycle and allowing all parties to benefit from sustained operational continuity. Where capacity or appetite changes require the agreement to end, the contractual termination provisions must be applied.
Oversight

Managing agents must ensure that appropriate, risk based oversight and monitoring arrangements are in place, consistent with the requirements applicable to all binding authority agreements.

Continuous contracts allow managing agents to separate oversight, due diligence, and performance management from the annual renewal cycle, enabling an ongoing, risk based approach. Each managing agent may adopt its own continuous oversight methodology, aligned with internal risk appetite.

Managing agents should also maintain a clear process for notifying all relevant internal teams when entering into continuous contracts, whether as lead or follow, to ensure that the applicable controls, oversight mechanisms, and governance arrangements can be applied effectively.
WordingsLloyd’s has published mandatory and advisory contractual provisions for incorporation into any of the standard wording templates.
Lloyd’s Europe has also published LBS0090 for Continuous CAAs.

For twin binders, while no model templates exist, managing agents should incorporate the relevant provisions set out here and in LBS0090 to ensure the wording is appropriate for a twin binder structure. Similarly for Lloyd’s Europe multi-year binders LBS0090 and Corporation multi-year wordings may be used as a base, adjusting where necessary to meet European requirements.

Managing agents must ensure that binding authority wordings contain the mandatory contractual provisions, appropriate remediation and termination provisions, together with any additional clauses required to support the continuous or multi‑year structure.


Year of Account (YOA), UMR and consistent referencing		Contracts that span multiple YOAs must remain fully aligned with Lloyd’s annual venture requirements.

All bordereaux, policies and endorsements issued under the binding authority must clearly reference the applicable YOA.

A single UMR may be maintained for the duration of the contract, supported by distinct underwriter references to differentiate each YOA. Alternatively, managing agents may choose to update the UMR annually to correspond with each new YOA.

Managing agents must ensure complete transparency regarding YOA on all policyholder facing documents and maintain clear, traceable references to enable claims and complaints teams to identify the appropriate YOA without ambiguity.

Continuous Line slips and Consortia

The guidance and model wording provided here for continuous contracts is intended for binding authority arrangements only. Adoption of other continuous delegated arrangements, such as line slips or consortia, is a commercial decision and Lloyd’s has no objection to their use.

Managing agents are responsible for drafting and agreeing the wording for these arrangements. The wording must include provisions for the transfer of the agreement to following years of account. These clauses must be legally robust and contract‑certain, clearly stating how and when new years of account are bound in place of the outgoing year. The basis for allocating risks between years of account should also be specified - generally on an Inception Date Allocation basis in line with Lloyd’s market practice.

Continuous consortia must adopt a calendar year annual transfer.

Find out more about annual transfer

Further information

Wording

Managing agents must ensure the appropriate contractual provisions are included to allow for continuous contracts. Lloyd’s have created a checklist of mandatory and advisory points which should be considered.
Find out more

Annual transfer

It is critical the annual transfer guidance is followed to allow for the continuous nature of the contract.
Find out more