Binding Authority Agreement (BAA)

Binding Authority Agreement (BAA)

A Binding Authority Agreement (BAA) is a contract under which an insurer delegates underwriting and binding authority to a third party, such as a coverholder or managing general agent. It defines the scope of authority, classes of business, underwriting limits, reporting requirements, remuneration, and compliance obligations. In the insurance ecosystem, BAAs enable delegated underwriting, allowing intermediaries to underwrite and bind policies on behalf of insurers.

In the context of Lloyd’s of London, managing agents use BAAs to authorize coverholders to write business for Lloyd’s syndicates. To learn more, read this article.