Guidance on Retrospective Endorsements for Binding Authority Contracts

This guide provides detailed guidance for managing agents regarding the handling of retrospective endorsements in binding authority contracts, as identified in feedback from brokers and managing agents. It outlines Lloyd's expectations, particularly emphasizing the importance of entering endorsements promptly and ensuring that they are not backdated unnecessarily. The document details the criteria for retrospective endorsements, categorizing them into two categories: those requiring prior agreement from Lloyd’s and those that can be managed internally. It discusses the risks associated with excessive use of retrospective endorsements, including legal uncertainties and potential breaches of agreements. Additionally, it introduces a new process for managing agents to follow starting January 1, 2024, including referral processes and validation checks to ensure compliance with Lloyd’s standards. Managing agents are urged to implement robust processes to avoid the improper use of retrospective endorsements and ensure that all parties have reached complete agreement before the endorsements take effect.