Lloyd's Market Association Bulletin

LMA20-016-LE | 07 April 2020

Claims Changes - Claim Scheme, Co-lead Binders & Proof of Loss 

This bulletin publishes the central changes being implemented by Lloyd’s and the LMA and includes:

   Lloyd's Memo

Co-lead Claims (model) Agreement - LMA9186

The updated model co-lead claims agreement, as part of Lloyd’s decision to enforce its application via the brokers, providing support for market wide adoption following market delivery via the LMAs Delegated Authority Claims Group and LIIBAs Delegated Authority Working Group. The co-lead claims agreement provides a leader only agreement to co-lead binders, streamlining the claims agreement process within the Lloyd’s market.
  LMA9186 - CLCA  

Key features of the agreement

  • a lead agreement party on behalf of all co-leads on a particular claim
  • a lead and second lead approach if a complex claim is identified, aligning to the Lloyd’s claims scheme 
  • primacy over existing third party administrator (TPA) arrangements solely in relation to the specific binders to ensure that if a TPA is appointed, they have consistent authority limits, soft triggers and loss funds
  • can be agreed at the inception of the binding authorities, or at a point throughout the lifetime of the binding authority.

Clams Scheme changes & guidance

  • Increasing the financial thresholds of “standard” claims from GBP 250k and 500k to GBP 500k and 1m respectively.
  • Allowing the Lead to be solely responsible for reassigning “complex” claims as “standard claims” in accordance with paragraph 4 of the Claims Scheme. The Lead is not required to obtain the prior agreement of the Second Lead. 
  • These changes apply to all new claims and subsequent transactions on existing / open claims.
  • COVID-19 related claims triaged as complex, as guided by the COVID-19 Claims Steering Group or LMA CoB sector groups, are excluded from these changes.
   Claims Scheme Guidance

Proof of Loss (POL) waiver of requirement

Lloyd’s and the LMA DA Claims Group (DACG) is of the view that a POL is not required where there is clear evidence that there are no claim issues with respect to coverage or quantum and or where regulation does not require a signed POL. Wording to support the approach to obtaining a POL (or not) depending on the scenario and your application of requiring or waiving the need for a POL can be found below:

   Proof of Loss

Lee Elliston
Claims Director