Principle
The managing agent has effective systems and controls wherever underwriting authority has been delegated to another entity.
Minimum standards
Effective systems and controls have the following features:
- The managing agent has a clear strategy for writing and managing delegated underwriting business as part of its overall business plan.
View guidance on clear strategy for delegated underwriting.
- The managing agent carries out thorough due diligence of coverholders to which it proposes to delegate authority.
View guidance on Lloyd's approved coverholders.
- The managing agent ensures that it has binding authorities in place with each coverholder to which it delegates authority clearly defining the conditions, scope and limits of that authority and which comply with Contract Certainty requirements, including the requirement to demonstrate regularly that insurance documents have been issued within required timescales.
View guidance on clearly defined authority.
- The managing agent proactively manages delegated underwriting contracts once incepted to ensure compliance with contract conditions.
View guidance on proactive management.
