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FAQs – Lloyd’s Claims Lead Arrangements (CLA)

Operational Oversight

All claims, for which the CLA is applicable, will be in scope.

New claims notified after 1 June 2023 need to be handled in accordance with the revised rules.

Claims that are already notified as of 1 June 2023 must be reviewed at their next movement to assess the correct triage category and allocation of the new Watchlist Codes.

Claims that have been notified to the market prior to 1 June 2023 but not yet processed at the cut-over date via ECF must be reviewed under the revised rules.

The Lloyd’s Claims Lead Arrangements operation falls within the Lloyd’s “Principles for Doing Business” following the framework of the Claims principles and sub-principles. Interaction with managing agents on their performance and on their compliance to the Lloyd’s Claims Lead Arrangements are part of that oversight activity already undertaken by Lloyd’s.

Complex claims financial threshold - increase of Lead only agreement

The Lead CAP and Second Lead CAP, in the case of a Complex claim, should exercise their judgement in these instances and triage the claim accordingly.

If necessary, the Lead CAP should consult with the Second Lead CAP and agree which threshold appears to be appropriate, this should be noted in the private comments. The principles of dynamic triage will also apply here; involving the Second Lead CAP where they will add value.

Financial Thresholds

This is in line with the risk based approach adopted under Lloyd's Principles for doing Business. It is the Lloyd's share, rather than the whole claim, that the Lead has authority to determine and therefore it is logical that the limit of Lead's authority is determined by the value of this share. Functionality on ECF allows CAPs to easily view the Lloyd's share.

The CLA shall not apply where managing agents have agreed on an insurance to adopt the SCAP arrangements for any claims in accordance with the guidelines published by the London Market Group (LMG). This shall be the case as long as the claim continues to meet the conditions for and is handled in accordance with the SCAP arrangements. Where a claim is being handled under SCAP is reassigned out of SCAP then the CLA shall apply from that time.

Dynamic triage

What is it not?

Dynamic triage should not be considered as a commentary as to the complexity of a claim, it relates to the current stage of the claim or the complexity of the task(s) at hand.

Dynamic triage should not be used to assign a claim as complex when none of the financial or non-financial complex criteria apply, if the Lead CAP wishes to communicate or avail of guidance from the followers they can do so via other means (phone-call, face to face, email, MDC, market meeting etc).

What is it?

Dynamic triage is the name given to the ongoing requirement for all Claims Agreement Parties (“CAP”) on claims which meet the complex criteria (financial or non-financial) to consider whether the involvement of a Second CAP is necessary and adds value during each stage of the lifecycle of a claim file.

When a matter meets the Complex criteria (financial and/or non-financial) dynamic triage requires the Lead CAP and Second CAP to consider at each stage of the claim whether the Second CAP’s continued input is adding value and therefore whether they are required as a CAP at this stage of the claim.

If both CAPs agree that no issues exist at this stage that require having the Second CAP’s involvement the Private Comments should reflect this agreement and the Lead CAP will reassign the claim to Standard.

The Lead CAP has an ongoing responsilibity to consider whether this decision to assign the claim as standard remains appropriate or whether any new information or developments justify the involvement of a second CAP. If unsure, the lead CAP must retriage the current sequence to Complex to allow the Second CAP the opportunity to consider whether their decision to step down remains appropriate. The Lead Cap should use the Private Comments to articulate the rationale in order for the Second CAP to decide whether they believe that their input is required. The purpose of dynamic triage is to allow the Lead CAP the opportunity to avail of the knowledge and expertise of the Second CAP as the situation dictates and allows the Second CAP to stand down should their involvement not be required at that point in the claim. "

The 2006 & prior scheme references have been removed in the updated and renamed Lloyd's Claims Lead Arrangements because they are now redundant. However, as no changes will be made to the ECF agreement screen before the launch of ICOS at the end of 2024, you should continue to select in ECF "2010" for subscription claims that are within the scope of the Claims Lead Arrangements and "2006 & prior" for singleton claims and subscription claims that are not within the scope of the Claims Lead Arrangements (eg satellite and term life claims).

Yes it is, as long as the complex criteria continue to apply, and this agreement should be recorded on the file. If the Lead CAP believes that the Second CAPs involvement is not required, even though the complex criteria apply, and has made this suggestion to the Second CAP via ECF and the Second CAP has not responded in ECF (i.e. a request by the Lead CAP in the Private Comments that the Second CAP agrees to triage the claim as standard has been overlooked by the Second CAP) the Lead CAP should speak/email the Second CAP directly and the agreement noted on the file (email exchange on IMR or noted in Provate Comments at next sequence).

Lloyd's will use relevant data to monitor Managing Agents regularity of dynamic triage use.

The process to establish the Lead and, if applicable, Second CAP are set out within the training information provided.

Claims Scheme Changes

For claims after the 1 June, you should continue to reflect the selection of "2010" for subscription claims and "2006 & prior" for singleton claims.

Co-Lead Binder Authorities

From 1 January 2024 the new framework will apply to all claims notified to risks written under co-lead, or multiple binders, including those that are subject to an old version of the CLCA.

Between 1 June 2023 and 1 January 2024 claims notified to risks written under multiple binders that include any binders that incepted before 1 June 2023 will not be subject to the new framework unless and until all binder leads agree to the new version of the CLCA which is consistent with the new framework. Managing agents are encouraged to adopt this new version as soon as practicable after 1 June 2023 to expedite the streamlining of the agreement of claims.

The lead CAP has authority under the CLA to agree the whole of the Lloyd’s share of standard claims. Therefore any DCA appointed by the lead CAP will have the authority, delegated to it by the lead CAP, to agree the whole of the Lloyd’s share of the claim, subject to any limits of the authority in the lead CAP’s contract as amended by the CLCA. The limits of the authority of the DCA should be set out in a CLCA.

Binder leads that are not claims agreement parties should liaise with lead CAPs to try to avoid duplicating audits in conjunction with the Lloyd’s Delegated Audit Manager (AiMS) co-ordinated audit process.

Binder leads that are not claims agreement parties will receive bordereaux from brokers as they do today, via ECF. Denials and claims where syndicates have been sued should be flagged in the bordereaux.

Individual claim entries will continue to be broken out of the bordereaux by DXC for each binder if the claim incurred exceeds the financial threshold set by the DXC technical processing service. Brokers will only need to request agreement to claims above the DCA or coverholder’s authority from the lead CAP (and second lead CAP if it is a complex claim). The binder leads that are not claims agreement parties will therefore not see these broker requests.

Brokers will need to submit to all binders any settlement requests, whether within the bordereau process or outside (ie cash calls), with evidence of Lead CAP agreement. The only claims that will fall outside the lead CAP’s authority and that will therefore need to be both seen and agreed by all syndicates (not just binder leads) are ex gratia claims.

Brokers and binder leads are free to agree to use ECF for the purpose of obtaining the Lead CAP's agreement to above authority claims. If a claim becomes complex the Lead and Second Lead CAPs and brokers should discuss and agree whether ECF should continue to be used and if so how.

Leader Communication to following Lloyd's syndicates

Details of syndicates and years of account that are subject to RITCs are captured here:

If details of the individual adjuster are not known please refer to the LMAs contact airtable.