The LMA’s Delegated Authority Claims Management Group, in partnership with LIIBA members, has updated the Co-Lead Claims Agreement Guidance (for LMA9186B) following feedback from the market relating to inconsistent adoption.

Since June 2023, it has been a Lloyd’s requirement for a CLCA to be in place to meet the Lloyd’s Claims Lead Arrangements (CLA) requirement for one Lloyd’s claims agreement party for all standard claims, and only two for complex claims. This includes claims arising from risks placed across multiple binders (co-lead binders). The LMA9186B, and its guidance, is designed to support the market in meeting the CLCA provisions set out in the Lloyd’s specialist guidance relating to co-lead binders.

Moreover, adoption of LMA9186B and its guidance streamlines Claims Agreement Parties ultimately resulting in faster claims decision making for brokers and customers.

While the changes to the guidance are not significant, reissuing the guidance provides an opportunity to highlight the importance of adopting it consistently across managing agents and brokers. We wish to highlight several areas which have been raised, specifically through market consultation, as being problematic. These include: 

The need for a documented CLCA in cases where the default position is agreed – the absence of a CLCA in these circumstances causes two issues. First there is no clear instruction for processing, which is currently causing additional work and delays. Second, it means that there is no documented agreement of the DCA’s authority.

CLCAs being stored on the IMR and shared with DCAs – for similar reasons, all CLCAs should be stored on the IMR for each binding authority by the broker and copies shared with DCAs.

One set of authorities to be agreed for DCAs – different levels of authority for DCAs undermines the purpose of the CLCA. It is therefore important that one set of authorities is agreed at the outset by Binder Leaders and that these are clearly documented in section 3 of the CLCA. Further, concerns have been raised about low DCA authorities which result in an increased level of claims requiring review by managing agents. It is the DACMG’s view that every effort should be made by Binder Leaders to come to an agreement for one set of authorities and that Binder Leaders should compromise where a low or high authority is proposed.

Communicating to followers – operation of the CLCA through systems is challenging due to system and bordereau constraints. In practice, this means that ECF is only really viable for standard claims, and watchlist codes are inoperable. The guidance has therefore been carefully designed to ensure that Binder Leaders and followers receive appropriate communications. It does however mean reliance on manual processes and as such we encourage you to ensure teams are familiar with the guidance.

Flexibility of LMA9186B – The guidance now highlights that the LMA9186B can and should be amended by the market to reflect specific market agreements. The market should however be mindful LMA9186B has been designed to meet the Lloyd’s provisions for a CLCA, as set out in Lloyd’s guidance. Details of which sections of 9186B align to Lloyd’s provisions is contained within the guidance.

We hope you find this guidance useful, alongside our one-page summary document, and we encourage you to share these with your colleagues. A list of contributors can be found at the end of the document, and we wish to thank them all for their support.

Further guidance relating to the cross-market CLCA will be issued later in summer.

If you have any questions relating to the guidance or for the DACMG, please contact jenny.neale@lmalloyds.com or LMAClaimsTeam@lmalloyds.com.

Jenny Neale
Senior Executive, Claims
jenny.neale@lmalloyds.com