Category: Claims handling · Reviewed by Matt Bartlett, Director · Founder · Last reviewed 2026-06-11
The Lloyd’s Claim Scheme is the market-wide arrangement governing how claims on Lloyd’s policies are handled — including notification, agreement, settlement and payment — through bureau systems and the leader-follower model.
The Lloyd’s Claim Scheme is the cornerstone of operational claims handling in the Lloyd’s market. It standardises the way claims are processed across the market’s hundreds of syndicates and thousands of slips, enabling efficient handling despite the highly distributed underwriting structure. The Scheme has been progressively updated, with major versions in 2006, 2010 and 2018, and continues to evolve.
The Scheme operates on three principles: leader-driven decision-making (the slip leader takes the substantive decisions for the following market on most claims); bureau processing (claims data flows through Lloyd’s bureau systems for transparency to followers); and agreement parties (defined rules about which insurers must agree to settlements).
The framework includes:
Lloyd’s regulates managing agents’ claims handling through its claims oversight function. The Scheme is supplemented by individual slips’ specific provisions.
The relationship between the Scheme and the broader Lloyd’s regulatory framework includes the PRA’s regulation of Lloyd’s, the FCA’s regulation of conduct within Lloyd’s-placed business, and Lloyd’s own internal oversight.
The Scheme operates through several mechanisms:
The leader-follower model: the slip leader is the primary decision-maker on claims handling. Followers benefit from the leader’s expertise without duplicating the work. The leader is paid no additional fee for this role; it is part of the slip leader’s market function.
Bureau processing: claims data is loaded to the ECF (Electronic Claim Files) system, making the claim visible to all following market participants. The bureau settles claims through the bureau accounting system once the agreement parties have approved.
Agreement parties: the Scheme defines which insurers must agree to settlements. SCAP (Single Claim Agreement Party) allows the leader to agree settlements below defined thresholds without follower sign-off. Above SCAP thresholds, formal market agreement is required, typically through the second-in-line (“first market” or “claims market”) who acts as an additional check.
Major claims protocols: very large or complex claims may attract additional Lloyd’s central engagement through claims management oversight. Lloyd’s may convene market-wide discussions for systemic issues.
Claims handling capability: managing agents must demonstrate they have adequate claims-handling capability for the business they underwrite. Lloyd’s claims oversight reviews managing agents’ processes periodically.
For non-Lloyd’s followers (companies participating on a Lloyd’s slip), the Scheme’s protocols still apply but with adjustments where the company market wishes to take its own claims decisions.
“SCAP claims” — handled by the leader within defined authority.
“Above-SCAP claims” — requiring formal market agreement through the bureau.
“Major loss” claims — attracting central Lloyd’s oversight.
“Run-off scheme” claims — for syndicates in run-off, with continued bureau handling under the Scheme.
“Reinsurance-to-close” claims — handled within the receiving syndicate’s framework once RITC has been completed.
A complex marine claim on a Lloyd’s slip is notified by the broker to the slip leader (Syndicate X) on 6 May. The slip has 12 syndicates with declarations totalling 100%; Syndicate X has 28% line.
ECF entry loaded; claim acknowledged by Syndicate X. The handler within Syndicate X’s claims team begins the substantive work. Followers see the notification in their bureau feeds.
The matter develops over twelve months. The slip’s SCAP threshold is $500,000; the initial reserve is $250,000 (within SCAP); subsequent development takes the reserve to $1.4m (above SCAP).
For settlement decisions above SCAP, Syndicate X consults the formal claims market — the second-in-line syndicate, which provides agreement on behalf of the following market. The eventual settlement at $1.1m is agreed by Syndicate X and the claims market; the bureau processes the settlement and distributes each follower’s share through the bureau accounting cycle.
Each follower’s claim is recorded in its own claims system through the bureau feed. Reinsurance accounting for each follower flows through to its retrocession arrangements.
Total elapsed time: notification to bureau payment approximately 14 months. The slip leader’s handling cost is internal; the bureau processing cost is allocated through Lloyd’s standard charges; the followers benefit from the leader’s work without additional handling cost.
By Matt Bartlett, Director, on 2026-06-11. Next review: 2026-12-11.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-11. Apex Insurance Brokers Limited, FCA FRN 724952, Companies House 07014570. Not regulated advice — consult your broker on your specific position.
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