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Our aim is to keep you up to date with the topics currently under discussion in the world of binding authority management. If you want clarification on any subject, please contact us.
What is delegation/sub-delegation?
An agreement between a syndicate(s) and a coverholder is a legally binding agreement and permits a coverholder, as an agent of the syndicate, to underwrite business that the syndicate would otherwise handle directly under a prescribed set of terms and conditions. This empowerment cannot be delegated to any other party by the approved coverholder.
Can I trade online?
Coverholders are increasingly looking to electronic trading solutions to sell products underwritten by syndicates. This is perfectly acceptable, but internet trading can be fraught with problems. As managing agents, we are responsible for the actions of coverholders selling Lloyd’s secured products, and as such we have to ensure that all coverholders are trading both legally and ethically. The Coverholders' Internet Trading pdf <insert link when ready> provides guidance about what managing agents look for in an internet trading solution.
How do I manage the insurance monies?
Insurance premiums received by a coverholder must be held in a segregated trust account, since funds other than pre-agreed commissions are the property of the syndicate. In other words, the coverholder is only entitled to retain the commissions, and all net balances must be passed to the subscribing syndicate(s) within a set timescale. We ask new coverholders to have their bank acknowledge this arrangement formally on bank headed paper, using a document similar to the Coverholders' Insurance Monies pdf template <insert link when ready>.
What are the guidelines on anti-money-laundering/international sanctions and financial crime?
These issues bring very real exposure. Coverholders who fail to adhere to the Lloyd's guidelines expose applicable staff within Tokio Marine Kiln and subscribing markets to criminal action and conviction in the event that, as agents of Tokio Marine Kiln, they fail to uphold internal controls and processes that coverholders must have in place.
What is Solvency II?
Solvency II is a European directive that establishes an EU-wide set of capital requirements and risk-management standards. It comes into effect from 1 January 2013.
Coverholders will find more information available on the Lloyd’s website.
What is the Bribery Act?
The Bribery Act is a piece of UK legislation that is expected to come into effect from April 2011 and has wide-ranging implications for coverholders and managing agents.
You can find more information about the Bribery Act on the Lloyd’s website.
What is Atlas?
Atlas is a Lloyd’s online market coverholder management system. It is accessible to coverholders, who are encouraged to upload key compliance documents to the system for viewing by brokers and managing agents.
Access to Atlas is provided by Lloyd’s.