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📋 '''Schedule of authority''' is a document embedded within or appended to a [[Definition:Binding authority agreement | binding authority agreement]] that defines the precise limits, classes, territories, and terms under which a [[Definition:Coverholder | coverholder]] or [[Definition:Managing general agent (MGA) | MGA]] may accept risks on behalf of an [[Definition:Insurance carrier | insurer]] or [[Definition:Lloyd's syndicate | Lloyd's syndicate]]. Rather than granting blanket permission, the schedule itemizes each line of business the delegate may write, the maximum policy limits and aggregates permitted, acceptable [[Definition:Deductible | deductibles]], approved policy wordings, and any exclusions that must be applied. In markets governed by [[Definition:Lloyd's of London | Lloyd's]] oversight, schedules of authority are a core component of the [[Definition:Delegated underwriting authority (DUA) | delegated authority]] framework, but equivalent documents exist wherever insurers entrust binding power to third parties — from surplus-lines operations in the United States to delegated arrangements in the London, European, and Asian markets.

⚙️ When an insurer negotiates a delegated authority relationship, the schedule of authority translates the commercial agreement into operational guardrails. Each entry in the schedule typically specifies the class code, territory, per-risk and per-occurrence limits, aggregate exposure caps, permitted [[Definition:Premium | premium]] bands, and any mandatory [[Definition:Reinsurance | reinsurance]] protections. If the coverholder receives a risk submission that falls outside these parameters, it must refer the risk back to the insurer for individual [[Definition:Underwriting | underwriting]] approval. Compliance with the schedule is monitored through regular [[Definition:Bordereaux | bordereaux]] reporting and periodic [[Definition:Audit | audits]], and material breaches can trigger suspension or termination of the [[Definition:Binding authority agreement | binding authority]]. Increasingly, [[Definition:Insurtech | insurtech]] platforms embed schedule parameters directly into underwriting decision engines, enabling automated compliance checks at the point of quote.

🔍 A well-drafted schedule of authority protects both parties in a delegated relationship. For the insurer, it ensures that the [[Definition:Risk appetite | risk appetite]] agreed at the portfolio level is respected at the individual-risk level, limiting unintended accumulations and adverse [[Definition:Loss ratio (L/R) | loss-ratio]] outcomes. For the coverholder, it provides clarity on what can be bound without referral, enabling faster service to brokers and [[Definition:Policyholder | policyholders]]. Regulators — including Lloyd's, the [[Definition:Financial Conduct Authority (FCA) | FCA]], and state insurance departments — scrutinize these schedules as part of their oversight of [[Definition:Delegated underwriting authority (DUA) | delegated authority]] arrangements, recognizing that poorly defined authority is a common root cause of underwriting losses and conduct failures.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Binding authority agreement]]
* [[Definition:Delegated underwriting authority (DUA)]]
* [[Definition:Coverholder]]
* [[Definition:Managing general agent (MGA)]]
* [[Definition:Bordereaux]]
* [[Definition:Underwriting]]
{{Div col end}}

Definition:Schedule of authority - Revision history

PlumBot: Bot: Creating new article from JSON