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Binding Authority Agreement

Binding Authority Agreement Template for India

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Key Requirements PROMPT example:

Binding Authority Agreement

"Need a Binding Authority Agreement for delegating property and casualty insurance underwriting authority to our Mumbai-based MGA, with authority limits of up to INR 50 million per risk and including specific provisions for digital policy issuance."

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Document background
The Binding Authority Agreement is essential for insurance companies operating in India who wish to delegate underwriting authority to another entity. This delegation must comply with strict regulatory requirements set by the Insurance Regulatory and Development Authority of India (IRDAI). The agreement outlines the scope of authority, underwriting limits, claims handling procedures, and compliance requirements. It is particularly relevant when insurers want to expand their distribution channels or specialized underwriting capabilities while maintaining control and regulatory compliance. The document includes specific provisions required under Indian insurance laws, details of authority limits, reporting requirements, and operational procedures.
Suggested Sections

1. Parties: Identification of the insurer/principal and the coverholder/agent

2. Background: Context of the agreement and relationship between parties

3. Definitions: Definitions of key terms used throughout the agreement

4. Appointment and Scope: Terms of appointment and scope of authority granted

5. Duration: Period of the agreement, including renewal terms

6. Duties and Responsibilities: Detailed obligations of the coverholder

7. Underwriting Guidelines: Parameters and limitations for underwriting authority

8. Premium and Commission: Financial terms, commission structures, and payment procedures

9. Claims Handling: Procedures for claims management and authority limits

10. Compliance and Reporting: Regulatory compliance requirements and reporting obligations

11. Records and Audit: Record-keeping requirements and audit rights

12. Confidentiality: Protection of confidential information

13. Termination: Grounds and procedures for termination

14. Post-Termination Obligations: Duties and responsibilities after agreement ends

15. Governing Law and Jurisdiction: Application of Indian law and jurisdiction

Optional Sections

1. Sub-Delegation: Terms for allowing sub-delegation of authority, if permitted

2. IT Systems and Security: Requirements for electronic systems and data security

3. Training Requirements: Specific training obligations for staff

4. Disaster Recovery: Business continuity and disaster recovery procedures

5. Marketing and Branding: Guidelines for use of brands and marketing materials

6. Anti-Money Laundering: Specific AML procedures if handling client money

7. Dispute Resolution: Alternative dispute resolution procedures if agreed

8. Force Majeure: Provisions for extraordinary events affecting performance

Suggested Schedules

1. Schedule A - Authority Limits: Detailed limits of underwriting authority by class of business

2. Schedule B - Commission Schedule: Detailed commission rates and payment terms

3. Schedule C - Reporting Requirements: Formats and timeframes for regular reporting

4. Schedule D - Claims Handling Procedures: Detailed procedures for claims management

5. Schedule E - Service Level Requirements: Performance metrics and service standards

6. Schedule F - Systems and Security Requirements: Technical requirements for IT systems

7. Appendix 1 - Underwriting Guidelines: Detailed underwriting rules and procedures

8. Appendix 2 - Forms and Templates: Standard forms and documents to be used

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant legal definitions
Agreement
Applicable Law
Authority
Binding Authority
Business Day
Claims
Class of Business
Confidential Information
Coverholder
Delegated Authority
Effective Date
Electronic Records
Force Majeure
IRDAI
Insurance Act
Insurance Business
Insurer
Instructions
Intellectual Property Rights
Material Breach
Net Premium
Notice
Personal Data
Policy
Policyholder
Premium
Principal
Regulatory Requirements
Records
Reinsurance
Risk
Schedule
Service Levels
Sub-Delegation
Term
Territory
Third Party Administrator
Underwriting
Underwriting Guidelines
Underwriting Limits
Clauses
Appointment
Authority Grant
Scope of Authority
Duration
Renewal
Territory
Regulatory Compliance
Underwriting Authority
Premium Collection
Commission
Claims Handling
Reporting Requirements
Record Keeping
Audit Rights
IT Systems
Data Protection
Confidentiality
Intellectual Property
Non-Competition
Non-Solicitation
Sub-Delegation
Service Levels
Performance Standards
Training Requirements
Marketing Authorization
Brand Usage
Representations and Warranties
Indemnification
Insurance Requirements
Limitation of Liability
Force Majeure
Assignment
Termination
Post-Termination Obligations
Dispute Resolution
Governing Law
Jurisdiction
Notices
Entire Agreement
Severability
Amendment
Waiver
Counterparts
Anti-Money Laundering
Anti-Bribery
Business Continuity
Relevant Industries

Insurance

Reinsurance

Financial Services

Risk Management

Healthcare Insurance

Property Insurance

Casualty Insurance

Marine Insurance

Aviation Insurance

Corporate Insurance

Relevant Teams

Legal

Compliance

Underwriting

Risk Management

Operations

Claims

Business Development

Regulatory Affairs

Technical

Portfolio Management

Agency Management

Product Development

Finance

Relevant Roles

Chief Underwriting Officer

Legal Counsel

Compliance Officer

Risk Manager

Managing Director

Operations Director

Claims Manager

Underwriting Manager

Business Development Manager

Insurance Operations Manager

Regulatory Affairs Manager

Portfolio Manager

Agency Manager

Technical Director

Chief Risk Officer

Industries
Insurance Act, 1938: The fundamental law governing insurance business in India, which provides the framework for insurance operations and delegation of authority
Insurance Regulatory and Development Authority Act, 1999: Establishes IRDAI as the insurance regulator and provides regulatory framework for insurance business including delegated authority arrangements
Indian Contract Act, 1872: Governs the basic principles of contract formation, validity, and enforcement in India, which are essential for the binding authority agreement
IRDAI (Insurance Intermediaries) Regulations, 2013: Specific regulations governing insurance intermediaries, their responsibilities, and operational requirements
Companies Act, 2013: Relevant for corporate governance aspects and business relationship requirements between companies
Prevention of Money Laundering Act, 2002: Compliance requirements for financial transactions and customer due diligence in insurance business
Information Technology Act, 2000: Relevant for electronic records and digital signatures if the agreement is executed electronically
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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