What types of delegated authority are there?

Ask two delegated authority professionals to describe their arrangements and you may get two very different answers.

One might describe a single coverholder binding household business on behalf of one insurer. Another might describe several syndicates sharing a lineslip for marine cargo risks, or a consortium of insurers backing a single lead underwriter in a specialist class.

All of these are forms of delegated authority, but they are structured differently, involve different parties, and create different obligations for reporting and oversight.

Understanding the main types of arrangement is a necessary first step before looking at agreements, bordereaux design, or oversight frameworks in more detail.

What counts as a "type" of delegated authority?

Delegated authority describes any arrangement where an insurer grants another party the right to make decisions—typically to underwrite business or handle claims—on its behalf.

What varies between arrangements is the structure: how many parties are involved, who holds the authority, how risk is shared, and who is accountable for oversight.

These structural differences are what define the main types of delegated authority found in the London Market.

Binder agreements

A binder agreement is the most common and straightforward form of delegated authority.

Under a binder, one insurer—often a Lloyd's managing agent—grants a coverholder the authority to enter into contracts of insurance on its behalf, within agreed terms, limits and classes of business.

The coverholder acts within the scope defined by the binder, issuing policies, collecting premium and, in many cases, handling claims up to an agreed authority level.

Because a single insurer and a single coverholder are typically involved, binder agreements tend to have relatively clear lines of accountability, even though the operational detail of scope, reporting and claims authority can still vary considerably between binders.

Lineslips and consortium arrangements

Not all delegated authority arrangements involve just one insurer.

A lineslip allows multiple insurers or Lloyd's syndicates to participate in a single delegated arrangement, usually with one underwriter acting as the lead who agrees terms on behalf of all participants. Each participant takes a share of the risk, but the coverholder or broker deals primarily with the lead.

A consortium arrangement is similar in spirit: several insurers pool capacity behind a single lead, who manages the relationship with the coverholder or MGA and applies the agreed underwriting terms on their collective behalf.

In both cases, the delegated party is dealing with a group of risk carriers rather than one, and the lead underwriter carries additional responsibility for representing the interests of all participants.

MGA and coverholder facilities

The party actually exercising delegated authority is usually referred to as a coverholder, though in many markets this role is described more specifically as a managing general agent, or MGA.

In practice, an MGA is a type of coverholder, typically with broader underwriting authority and a more developed operational infrastructure of its own—sometimes managing its own distribution, claims handling and technology.

The important distinction to hold onto, regardless of terminology, is between the party that "holds the pen" (the coverholder or MGA making underwriting decisions) and the party that carries the risk (the insurer or insurers standing behind the arrangement). This distinction applies whether the arrangement is a straightforward binder, a lineslip, or a consortium.

Why the type of arrangement matters for data flow

The type of delegated authority arrangement has direct, practical consequences for how data flows through an organisation.

A single-insurer binder typically produces one bordereau format, agreed between two parties. A lineslip or consortium arrangement may require the lead to consolidate data before distributing it to participants, or each participant may expect their own share reported separately.

Reporting frequency, the level of detail required and the intensity of oversight should all be proportionate to the complexity and risk of the arrangement. Treating every arrangement with a single, generic bordereaux template or oversight checklist increases the risk of misaligned expectations between insurers, leads and coverholders.

Recognising the type of arrangement early—before bordereaux formats are agreed or oversight routines are designed—makes it easier to set expectations that are appropriate to that specific structure, rather than retrofitting a process later. Once these distinctions are clear, tools such as AI can help manage the resulting variation in bordereaux formats and reporting cycles, but that variation needs to be understood first.

Example

A Lloyd's managing agent has three separate delegated arrangements in place: a straightforward binder agreement with a UK coverholder for household business, a lineslip shared with two other syndicates for marine cargo risks, and a consortium arrangement led by another managing agent for agricultural risk in South America.

Each arrangement produces bordereaux in a different format and on a different reporting cycle.

By recognising that these are three distinct types of arrangement—not variations of the same thing—the oversight team applies different bordereaux review checklists and reporting timelines to each, rather than a single generic process, reducing the risk of misaligned expectations with each coverholder or co-participant.

FAQs

• What is the difference between a binder agreement and a lineslip?

  A binder agreement typically involves one insurer delegating authority to one coverholder. A lineslip involves multiple insurers or syndicates participating in a single delegated arrangement, usually represented by one lead underwriter who agrees terms on behalf of all participants.

• Is an MGA the same as a coverholder?

  An MGA is a type of coverholder, typically with broader underwriting authority and more developed operational infrastructure of its own. Terminology varies across markets, so it is worth confirming how a specific organisation uses the terms in practice.

• What is a consortium arrangement in delegated authority?

  A consortium arrangement is where multiple insurers pool capacity behind a single lead, who manages the relationship with the coverholder or MGA and applies agreed underwriting terms on their collective behalf.

• Does the type of delegated authority affect how bordereaux should be reported?

  Yes. Different arrangement types often require different bordereaux structures, consolidation approaches and reporting cadences. This is covered in more depth in articles focused specifically on bordereaux.