Terms of Business Agreements
UPDATE: New versions of the the model Non Risk Transfer Terms of Business Agreement (NRT TOBA) and Risk Transfer Terms of Business Agreement (RT TOBA) were published in April 2018 to reflect the General Data Protection Regulation and the Criminal Finances Act 2017. These new documents are available here via IUA Circular 027/18.
In December 2011 the IUA, Lloyd’s Market Association (LMA) and London & International Insurance Brokers' Association (LIIBA) published a new model market non risk transfer terms of business agreement (NRT TOBA 2011) for use between an insurer or managing agent and a London market broker. This revised version updated the 2005 model NRT TOBA.
At that time the Associations agreed not to prepare a new model risk transfer TOBA (RT TOBA) pending the review of the client money rules by the FSA and likely changes to the Client Assets (CASS) sourcebook. The Associations did, however, publish an endorsement designed to allow those changes made to the NRT TOBA 2005, which were equally applicable to the RT TOBA 2005, to be incorporated into existing RT TOBA arrangements (where based on the model 2005 agreement). The endorsement essentially applies the new compliance clauses to the RT TOBA.
(Please note that the CASS review continues and new CASS rules have not been published by the Financial Conduct Authority.)
The NRT TOBA 2011 referred to the "FSA" and defined it as follows: "The Financial Services Authority or any successor regulatory bodies". The FSA has now been replaced by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA), effective 1 April 2013.
To reflect the creation of the new regulators, IUA, LMA, and LIIBA have agreed a revised set of model agreements (for completeness, checked by Reynolds Porter Chamberlain), replacing the defined term "FSA" in the NRT TOBA 2011 with "UK Regulator" and making consequential changes. The UK Regulator is defined as "The Financial Conduct Authority (FCA) and/or the Prudential Regulation Authority (PRA) as appropriate, or any successor regulatory body or bodies to both or either of them". A similar amendment has been made to the RT TOBA Endorsement 2011. Attached are Word and PDF copies of the amended model "NRT TOBA 2011 (amended May 2013)" and model "RT TOBA Endorsement (amended May 2013)" and tracked versions showing the changes from the 2011 models.
We have made the changes and are publishing these new model agreements, because we are conscious that members would wish their new agreements to incorporate the names of the new regulators and not the name of the old regulator. However, it is not necessary to re-sign TOBAs already entered into on the basis of the NRT TOBA 2011 or the RT TOBA Endorsement 2011, because the definition of "FSA" was given enough flexibility to include successor regulators.
We would remind members that the TOBAs and related endorsements are model agreements only and are available for members to adopt as they deem appropriate.
Both the LMA and LIIBA have advised their members of the new TOBA models.
Earlier versions of the TOBA models are available on request. For further information please contact Chris Jones
, IUA Director of Market Services