The Lloyd’s Market Association (LMA), working in conjunction with Lloyd’s and broker trade body LIIBA, is setting out to rationalise the market’s model binding authority agreements, thereby making it easier for managing agents to ensure their contracts remain compliant with regulatory requirements.
The review, which began in March, aims to reduce the number of model agreements used by the market to ensure consistency in having the most up to date provisions and to assist in incorporating future regulatory changes.
Neil Smith, the LMA’s head of underwriting, said: “Following the previous review, the market’s model binding authority agreements are generally very similar with different sections relating to the specific territory and market sector. What we’re aiming to do now is consolidate and reduce the number of model wordings further. One of the key benefits of this is that if regulations change, or amendments are needed, it will be considerably easier to make the necessary changes.”
With 30% of Lloyd’s market business being conducted through binding authorities, changes to these underwriting contracts can have a significant impact on the Lloyd’s community.
Model binding authority agreements in Lloyd’s were last reviewed over six years ago.
The review is being led by the LMA’s binding authority wordings committee including representatives from LIIBA and Lloyd’s. Draft agreements will be circulated in late summer–early autumn with the intention of completing the review in time for the year-end binder renewal season.
