Solving complex commercial issues for the insurance sector: New Velonetic Central Services Agreement

Key dates and actions for Lloyd’s Managing Agents and London Company Market participants

Why does this matter?

Velonetic provides shared central processing services that underpin key elements of the Lloyd’s and London Company Markets, including premium and policy processing, claims processing and settlement. 

The contractual framework governing these key Market services is now being renewed, requiring Market participants to review the new arrangements, complete relevant due diligence and obtain approval before signing.

Why is a new agreement needed?

The original Blueprint Two programme envisaged a single transition from Velonetic’s heritage processing services to new digital services. Earlier in 2026, Lloyd’s and the IUA announced that they were moving away from Blueprint Two in favour of incremental technology modernisation. The Market’s existing central services arrangements with Velonetic therefore need to be renewed to support current services while allowing new technology to be introduced gradually. The new agreement is the Central Processing Subscription Agreement (CPSA), also commonly referred to as FERN 3.

Key dates

30 September 2026

CPSA-related documentation made available to market participants

30 November 2026

CPSA material outsourcing notification (MON) submitted to the FCA

Q1 2027

CPSA approved & signed by market participants

1 April 2027

CPSA comes into force

Key actions

1-30 November: Prepare for the MON submission: 

Lloyd’s submits the MON to the FCA on behalf of all Lloyd’s managing agents, whilst the IUA is completing the same process for relevant Company Market insurers. 

• Opt-in to the collective MON process
• Complete a full review of the MON against your firm’s material outsourcing governance requirements
• Undertake additional firm-specific material outsourcing due diligence, as deemed necessary

30 September – 31  December: Get ready to sign the CPSA

The CPSA is substantially different from the Market’s existing contractual framework with Velonetic.

• Complete a full review of the CPSA
• Understand the key changes from the existing arrangements, why those changes have been made and how they impact you
• Prepare a focused risk assessment of the CPSA of the CPSA for your internal approval process

Q1 2027: complete the CPSA approval process

• Complete your internal approval process and sign the CPSA before it comes into force.

How we can help

As experts in insurance sector outsourcing arrangements and with huge experience in the Lloyd’s market, we can help you smoothly navigate the transition to the CPSA, including by:

• Helping you fully prepare for the MON submission
• Helping you get ready to sign the CPSA
• Helping you identify key contractual, operational and regulatory risk points as part of your overall risk assessment of the CPSA 
• Answering discrete queries you may have about the new Velonetic arrangements