COB 8A.1 Application and purpose

An insurer is responsible for claims handling. A managing agent is responsible for claims handling for policies underwritten at Lloyd's. An insurer or a managing agent remains responsible for claims handling if it outsources any of its claims-related activities, including where it gives an intermediary authority to handle claims on its behalf. An insurer or a managing agent is not responsible for the administration and performance activities that a firm carries out on behalf of a policyholder in connection with a claim. In relation to these activities, a firm which acts on behalf of policyholders should refer to COB 8A.3.

An insurer should refer to the rules and guidance set out in SUP 2.3.5 R to SUP 2.3.10 G in respect of any person to whom it outsources its claims handling functions.

This chapter applies to claims made by or on behalf of policyholders.

1. (1)

   The purpose of this chapter is to ensure that:

   1. (a)

      claims are handled fairly;

   2. (b)

      claims are settled promptly;

   3. (c)

      policyholders are provided with information on the claims handling process and with an explanation of why a claim is rejected or not settled in full, where relevant; and

   4. (d)

      firms acting on behalf of policyholders disclose and manage any conflicts of interest that may exist.

2. (2)

   This chapter reinforces:

   1. (a)

      Principle 3 (Management and control), which requires a firm to take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems;

   2. (b)

      Principle 6 (Customers' interests), which requires a firm to pay due regard to the interests of its policyholders and treat them fairly; and

   3. (c)

      Principle 8 (Conflicts of interest), which requires a firm to manage conflicts of interest fairly, both between itself and its policyholders and between a policyholder and another client.