Risk Transfer and Non Risk Transfer Terms of Business Agreements:
GDPR and Criminal Finances Act 2017 - amended model agreements and endorsements
The LMA, in conjunction with LIIBA, has amended the model Non Risk Transfer Terms of Business Agreement (NRT TOBA) and Risk Transfer Terms of Business Agreement (RT TOBA) to reflect the General Data Protection Regulation (which comes into effect on 25 May 2018) and the Criminal Finances Act 2017 (already in effect). These are model agreements for use by Lloyd’s managing agents and Lloyd’s brokers (the IUA has made similar amendments in respect of the equivalent company market agreements).
The updated TOBAs and endorsements can be found here. That webpage also contains the updated model Binding Authority, Consortium and TPA agreements and endorsements published on 5 March 2018.
The updated TOBAs and endorsements comprise the following:
Non risk transfer agreements:
- NRT TOBA 2018;
- Separate GDPR and CFA Endorsements for use with the NRT TOBA 2011 (amended May 2013);
- Marked-up NRT TOBA (pdf) showing changes between the NRT TOBA 2018 and the NRT TOBA 2011 (amended May 2013).
Risk transfer agreement:
- RT TOBA 2018;
- Marked-up RT TOBA (pdf) showing changes between the RT TOBA 2018 and RT TOBA 2017.
- The NRT TOBA endorsements have been produced for use with the NRT TOBA 2011 (as amended in May 2013), so that form of agreement can be updated by endorsement as an alternative to entering into a new TOBA. Please note that if you are updating an agreement which varies from the model 2011 agreement, then the endorsements may need to be appropriately tailored (e.g. as to clause numbering).
- We have not produced model endorsements for use with existing RT TOBAs. This is because we understand that some firms with risk transfer arrangements have TOBAs dating from 2005, which may or may not have been endorsed subsequently. There is a risk that new model GDPR and CFA endorsements would not tie in with the actual underlying arrangements. However, for firms which wish to amend older TOBAs, the CFA and GDPR amendments are all contained in Sections 8 and 9 of the new 2018 TOBAs. Therefore, subject to appropriate tailoring, Section 8 and Section 9 of the 2018 TOBAs may be used in their entirety as addenda to existing TOBAs. (The RT TOBA 2017 mentioned above is the amalgam of the RT TOBA 2005 and pre-2017 endorsements.)
- We have made some further changes to the RT TOBA 2018 so that, apart from the operative risk transfer provisions in Section 6, the remainder of this agreement aligns to the NRT TOBA 2018 (these changes can be seen in the RT TOBA mark-up listed above).
- Please also note that we intend to give the new model NRT TOBA 2018, RT TOBA 2018, and endorsements, LMA reference numbers and will add these documents to Lloyd’s Wordings Repository when the numbers are allocated.
- As with all model agreements, these are published to assist the market, and firms may tailor them according to their own particular arrangements.
We are grateful to Clyde & Co who have advised us in relation to these new model agreements.
Any queries regarding this bulletin should be addressed to Kees van der Klugt (firstname.lastname@example.org or 0207 327 8407), Manreet Sher (email@example.com or 020 7327 4872), Tom Hamill (firstname.lastname@example.org or 020 7327 8377) or Alison Colver (email@example.com or 020 7327 8370).
Kees van der Klugt
Director of Legal & Compliance