Insurance: launch of new Lloyd’s Claims Scheme

On 30 September 2011, Lloyd’s launched its new “Combined” Lloyd’s Claims Scheme.

The changes recognise the transition of the 2010 Pilot Scheme to a full Lloyd’s Claims Scheme, and expand the scope of the Claims Transformation Programme (CTP) claims agreement practices into the Professional Indemnity, Financial Institutions and Medical Malpractice classes of business.

Scope

The 2010 Claims Scheme will apply to the PI, D&O, Financial Guarantee and Medical Malpractice classes for claims from 1 January 2012, as well as various categories which already fell under the 2010 Pilot Scheme (including Property (D&F), CAR/EAR, Contingency, Energy, Marine, Product Recall, Property Treaty and Casualty Treaty). Other classes will remain subject to the 2006 Claims Scheme.

Changes to the 2010 Claims Scheme

Changes to the operation of the 2010 Claims Scheme have also been made following feedback from the market.

The triaging process has, in one sense, been simplified so that there will only be “Standard” or “Complex” claims. The “Mid Tranche” category of claims has been deleted under the 2010 Claims Scheme. Any CTP claims currently categorised as “Mid Tranche” will be re-categorised as “Complex” as of 1 January 2012.

There are, however, now variable financial thresholds to determine the designation of the claim depending on the class of business. For example:

• The financial threshold for Property and CAR/EAR claims is £250,000
• The financial threshold for Property Treaty and Energy claims is £500,000
• The financial threshold for PI and D&O is £250,000

The obligations of the lead/second lead remain the same under the 2010 Claims Scheme as they were under the 2010 Pilot Scheme.

The launch of the 2010 Claims Scheme, taking effect from 1 January 2012, coincides with the launch of other elements of the Claims Transformation Project on the same date. These include the new Lloyd’s Minimum Standards.

If you would like any further information or have any questions on the legal implications or the operation of the 2010 Claims Scheme, please contact us.