Canadian Underwriter
News

Lloyd’s publishes minimum standards for managing agents which take effect in 2015


July 3, 2014   by Canadian Underwriter


Print this page Share

Lloyd’s of London recently published a set of minimum standards, scheduled to take effect Jan. 1, 2015, for the companies that manage the syndicates of members that write insurance for the Lloyd’s market.

The minimum standards for Lloyd’s managing agents are now on the Lloyd’s website.

“The original Lloyd’s minimum standards were developed around 2005 and covered fundamental elements such as underwriting, governance and risk management,” the Corporation of Lloyd’s stated Tuesday, of its standards for managing agents, in a press release. “Over time, additional minimum standards have been developed to support broader activity.”

In the Lloyd’s market, managing agents are companies that “manage one or more syndicates on behalf of the members who provide the capital,” Lloyd’s explained in its annual report for 2013, published in March. “Managing agents have responsibility for employing underwriters, overseeing their underwriting and managing the infrastructure and day-to-day operations.”

As of Dec. 31, there were 56 managing agents and 91 active syndicate in the Lloyd’s market.

One reason for the new minimum standards for managing agents is to ensure they comply with Solvency II, a European Union directive that stipulates capital requirements and risk management standards for European insurers and is scheduled to take effect Jan. 1, 2016.

“With the onset of Solvency II and other regulatory requirements, multiple sources of ‘requirements’ existed which managing agents needed to comply with,” Lloyd’s stated.

The areas covered by the new minimum standards are: underwriting management; claims management; governance; risk management; scope, change and use; modelling, design and implementation; validation; investment management; reserving; regulatory; conduct risk; and operating at Lloyd’s.

“The new Lloyd’s standards in relation to Conduct Risk were issued for market consultation in June and will be published in final form later in July,” Lloyd’s noted.

“Since the beginning of 2013, Lloyd’s has been working closely with the Lloyd’s Market Association (LMA) and the market to undertake a refresh of all Lloyd’s minimum standards,” Lloyd’s added. “The overall objective of the refresh project has been to develop a clear and complete framework within which all managing agents are expected to operate, provide consistency in interpretation, presentation and publication of all standards and ensure that Lloyd’s minimum standards align clearly with the requirements of Solvency II.”

In 2013, 43% of the Lloyd’s market business was from Canada and the United States, according to the Lloyd’s annual report for 2013. The total Lloyd’s market in Canada in 2012 was $1.7 billion.

In that annual report Lloyd’s noted it is treating “the implementation of Solvency II as a priority.”

The Corporation of Lloyd’s — which oversees and manages the Lloyd’s market — and the market itself “have made significant progress towards implementation and are on track to successfully complete this work,” Lloyd’s stated of Solvency II in its annual report. “This has enabled Lloyd’s to use Solvency II calibrated internal models and balance sheets for capital setting and to meet the current Individual Capital Adequacy Standards (ICAS) regulatory requirement from 2013.”


Print this page Share

Have your say:

Your email address will not be published. Required fields are marked *

*