Lloyd’s Market Association Bulletin

The LMA’s Delegated Audit Group (DAG) has put together a model Terms of Business Agreement (TOBA) that can be used by managing agents when instructing coverholder or TPA auditors. The TOBA is also available on the Lloyd’s Wordings Repository, (LMA9165).

The use of this document is not mandatory, however it does cover all of the key elements of an audit instruction and is designed to be used for the audit of any entity with a delegated authority.

The main aims of this model contract are:

• to provide a contract that can be used by any managing agent that does not have its own standard TOBA for use with auditors
• to ensure that the TOBA makes adequate provisions for both the managing agent and the auditor 
• to provide terms suitable for all audits, whether or not they are conducted within AiMS 
• to allow for the parties to establish their own service level expectations.

Before being published this TOBA has been subject to legal review, and feedback from the Delegated Authorities Reviewers Association (DARA) has been considered within the drafting. Where personal data may be processed outside of the EU, the agreement requires the EU model terms or such variation that the managing agent might require. The current versions of these can be found here.