Delegated Claims programme of work

In collaboration with the LMACC & Lloyd’s claims team, the LMA has put together a delegated claims model, encompassing a long term delegated claims strategy addressing both business process and underlying systems to support that change. A program of work has been designed to help to address both of these and in response to the Lloyd’s delegated authority (DA) claims thematic review undertaken in 2017.

The main aims of the program are to provide an improved and more consistent DA experience for TPAs, improved service for customers and increased indemnity accuracy. This will be achieved by providing the market with guidance, tools, model wordings and frameworks to assist in moving towards a common market approach in managing delegated claims.

For an executive summary of the programme, click the document link below, or download the detailed guidance on the side panel.

Where we are looking to provide these deliverables to the market as output, we understand that some managing agencies will have their own views on tools, for example TPA agreements. that they have developed and want to use going forward. In some scenarios and for certain areas of the deliverables, we may request that managing agents incorporate elements of this work into their own tools to drive consistency on areas where we know there are pain points for delegated claims agents.

We have prepared a survey to help us coordinate feedback on these items. If you could please complete the survey via the link below we’d really appreciate any feedback – this will help us to make these tools as strong as possible and improve their use to the market as a whole.

Click here to access the survey 

An overview of the proposed deliverables for the programme is as follows:

Delegated Claims Administrator Agreement

The DCA Agreement has been drafted to cover delegation of claims to any entity (either coverholder or TPA). The structure of the agreement is threefold - the 'Agreement' containing the standard clauses applying to all operations of any delegated entity and forming the core of the overall agreement, the 'Schedule' which contains requirements that would apply to all operations of the entity on behalf of the managing agent, and the 'Declaration(s)' which would cover specifics for one or more binding authority agreements (or risks). We’ve used our model binding authority wording (with agreement from the BASCG on our approach) as the basis to the new agreement to try to create consistency across all delegated arrangements.

One of the key design principles here has been to align requirements around delegated claims, irrespective of whether the entity is a coverholder or a TPA. As such the agreement is currently drafted in that it could apply to either a TPA as a TPA agreement, or to a coverholder as a separate agreement to sit alongside their binding authority. One of the key aspects of the consultation is to gauge the view from the claims community on how you would like this structured. We’ve been focusing on the words in the drafting and are asking for your input in how you would prefer it to be structured to different types of delegated entity.

In either event, the intent is that the core of the requirements for either coverholders or TPAs will align in areas that cover outsource as a whole. This would include areas such as bank accounts, financial crime, confidentiality and conflicts of interest. We’ll be working with the Binding Authority wordings group to ensure that these areas align, and updated binding authority agreements will follow during Q2.

Draft DCA Agreement for Consultation
Draft Declaration for Consultation

Market Standard SLA Measures:

The programme of work has looked at what appropriate contracted terms should be included in any agreement with a TPA or coverholder, what data is contained in the mandatory Lloyd’s Coverholder Reporting Standards to evidence the compliance against those terms, how to extract that performance data, what gaps this leaves, and the most appropriate way to get that additional oversight where performance can not be derived from the Lloyd’s Coverholder Reporting Standards. A key driver here is to standardise the markets approach, which in turn makes it easier for coverholders and TPAs to work for Lloyd’s whilst also delivering a high standard of oversight that is easier for MAs to deliver.

It is also worth stating that these standards have been developed to be universal in application, so no matter whether the delegated claims entity is a TPA or a coverholder, the same expectations will be set, and the same level of oversight will be deployed.

The SLA measures are comprised of 13 mandatory SLAs and 10 conditional SLAs, which can be varied depending on the claims to be handled. It is also envisaged that the required measurement (Service Level Expectation) against the specific measure (Service Level Agreement) would vary depending on the circumstances or individual managing agency risk appetite, but by standardising the measures should provide for a more consistent framework – making it easier for TPAs to engage with differing requirements from managing agents within that framework.  

The development of the “LMA DA Thematic Workstream – SLA Template” listing 23 common SLAs that will allow a MA to have suitable oversight of key performance indicators of delegated claims entities;

  • 13 mandatory SLAs 
  • 10 conditional SLAs
  • Each SLA links back to a specific category of oversight, covering the various areas where the market should be setting SLAs and reviewing oversight of performance.
  • The identification of whether the SLAs are reportable based on data contained in the Lloyd’s Coverholders Reporting Standard (V5.1), or whether the delivery against the agreed SLA can not be extracted from the claims bordereau, and thus should be checked as part of the claims audit process.

TPA & Coverholder Audit Framework & Scope:

Work in this area has focused on creating a standard audit scope for TPA audits, that is closely aligned to the 2018 coverholder audit scope, and that delivers the same benefits for TPA audits as the 2018 scope did for coverholders.

In essence, those key focus areas that relate to those activities undertaken by a TPA have been retained, and the claims content has been refreshed to ensure there is adequate guidance to the auditor, and where risks were missing in the coverholder audit scope (loss fund management and bordereau reporting), these have been added in. The claims testing template has also been overhauled to facilitate a robust technical file audit is undertaken, which was an area of focus identified in Lloyd’s Thematic Review of Delegated Underwriting Claims Management.

Where changes have been made when developing the new TPA audit scope, those enhancements have been copied in to the coverholder audit scope, so no matter whether the delegated claims entity is a TPA or a coverholder, the same audit approach will be followed.

  • TPA specific audit scope, allowing MAs to propose some or all of the following components, depending on previous audits and risk appetite;
  • a guidance document to support the auditors use of the TPA audit scope, with much greater clarity on expectation of the claims controls expected
  • an updated claims testing sheet for use as a technical file audit question set (from 38 questions to 61 questions), including an aggregation and reporting tool to group and analyse audit findings
  • an updated coverholder audit scope and guidance document , refreshed to include any new material developed as part of the TPA audit scope creation

Co-Lead Claims:

  • LMA model wording for Co-Lead Claims Agreement.

Due Diligence & Compliance 

  • assess feasibility, function and scale of a framework for central due diligence/compliance system
  • market guidance on suitability criteria to include thresholds for capabilities, services and controls
  • making data from all sources (e.g. DA SATS, audits, complaints data, etc) readily available to managing agents, auditors and Lloyd’s.

Here you can find both the high level strategy and detail regarding the proposed output from the programme. 

Should you have any questions on the consultation or want to understand more about the context of these deliverables, please get in touch with either Clare Knight or Tim Bowling

What we have delivered so far:


Co-Lead Claims Agreement: Delivery of a model agreement that will wrap around a number of co-lead arrangements to a specific coverholder, replicating the processes within the Lloyd’s Claims scheme to ensure efficient claims agreement processes. This has now been published as LMA9157, and can be found in LMA Bulletin LMA18-046-TH.

Updated Central Records: Lloyd's have undertaken a reconciliation exercise with managing agents to ensure that central records of delegated claims arrangements are up to date. Once these have been integrated with existing records they will be in touch with TPAs to further expand that reconciliation exercise – this should give clarity to all stakeholders about who is responsible for claims handling in all instances.

Should you have any queries about the program or would like to get involved, please contact either Tom Hamill or Tim Bowling.

Strategy document

Download Strategy Document

Activity tracker

Click here for timelines

Contact us

Tim Bowling
Senior Executive, Claims

Clare Knight 
Consultant, Delegated Authority


DA SATS Endorsements
[LMA19-012-TH3/21/2019] DA SATS was launched in late 2018 as a platform to assist the market to manage bordereaux information and data gathered under binding authorities.

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LMA action on delegated claims
[LMA action on delegated claims9/19/2018] LMA's Claims Director, Lee Elliston discusses the LMA's programe of work in relation to delegated claims in the Lloyd's market.

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