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What Is Lloyd’s?

Lloyd’s of London: Is an insurance and reinsurance market generally known as “Lloyd’s.”.  Lloyd’s is not an insurance company.  It is a marketplace.

Syndicates: A syndicate functions like a small insurance company, assessing risks and paying claims.  Often times a particular Lloyd’s program is insured by several syndicates.

Managing Agent: They work on behalf of syndicates, overseeing day-to-day business affairs.  Managing Agents select and oversee Coverholders.

Coverholder: Is a company that underwrites risk on behalf of a Managing Agent.  Coverholders operate under “binding authority” granted to them by Managing Agents to underwrite certain types of risk at certain levels of risk.  In the United States, the term “Managing General Agent/Underwriter” or MGA/MGU is often synonymous with Coverholder.  These US entities can be considered the sole distributors of programs and products in connection to the US Lloyd’s marketplace.  Separate US Coverholders can evaluate an identical risk, differently – delivering different underwriting (medical) requirements, different provisions, and different pricing.