https://www.insurerbrain.com/w/index.php?action=history&feed=atom&title=Definition%3AClaims_handling_agreementDefinition:Claims handling agreement - Revision history2026-04-30T11:03:51ZRevision history for this page on the wikiMediaWiki 1.43.8https://www.insurerbrain.com/w/index.php?title=Definition:Claims_handling_agreement&diff=8712&oldid=prevPlumBot: Bot: Creating new article from JSON2026-03-11T04:31:01Z<p>Bot: Creating new article from JSON</p>
<p><b>New page</b></p><div>📋 '''Claims handling agreement''' is a formal contract between an [[Definition:Insurance carrier | insurance carrier]] and a third party — often a [[Definition:Managing general agent (MGA) | managing general agent]], [[Definition:Third-party administrator (TPA) | third-party administrator]], or [[Definition:Coverholder | coverholder]] — that sets out the terms under which the third party is authorized to manage, adjust, and settle claims on the insurer's behalf. Unlike a general [[Definition:Service-level agreement (SLA) | service-level agreement]], a claims handling agreement is specific to the [[Definition:Claims process | claims process]] and typically defines authority limits, reporting obligations, reserve-setting protocols, and the circumstances under which the insurer must be consulted before a claim is paid or denied.<br />
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⚙️ The agreement functions as a governance framework that balances operational efficiency with insurer oversight. It will specify monetary thresholds — for instance, the delegated party may settle claims up to a certain value independently, while anything above that ceiling requires the carrier's explicit approval. Detailed provisions cover how [[Definition:Loss reserves | reserves]] must be posted, the frequency and format of [[Definition:Bordereaux | bordereaux]] reporting, and which [[Definition:Claims management system | claims management systems]] the delegate must use. In the [[Definition:Lloyd's of London | Lloyd's]] market, claims handling agreements are subject to additional scrutiny under the [[Definition:Delegated authority | delegated authority]] framework, and [[Definition:Lloyd's syndicate | syndicates]] often require the delegated party to follow Lloyd's minimum standards for claims.<br />
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🔑 Without a well-drafted claims handling agreement, an insurer risks losing control over one of the most financially consequential parts of its business. Poorly defined authority limits can lead to overpayment of claims, inconsistent [[Definition:Reserving | reserving]] practices, or regulatory breaches — any of which can erode the carrier's [[Definition:Loss ratio (L/R) | loss ratio]] and reputation. For [[Definition:Delegated underwriting authority (DUA) | delegated authority]] arrangements in particular, regulators and rating agencies view robust claims handling agreements as a marker of sound governance, making them essential not just operationally but strategically.<br />
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'''Related concepts'''<br />
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* [[Definition:Delegated underwriting authority (DUA)]]<br />
* [[Definition:Third-party administrator (TPA)]]<br />
* [[Definition:Binding authority agreement]]<br />
* [[Definition:Claims process]]<br />
* [[Definition:Loss reserves]]<br />
* [[Definition:Coverholder]]<br />
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