Lloyd's: Law and Practice
Under FSMA the members of Lloyd’s taken together have a duty at all times to maintain overall financial resources, including capital and liquidity resources, that are adequate to ensure that there is no significant risk that liabilities under contracts of insurance written at Lloyd’s will not be met as they fall due.1 Lloyd’s must ensure, having regard to the availability of its own resources, i.e. primarily the New Central Fund, that the financial resources supporting the business of each member are adequate at all times,2 and there must be adequate systems etc. in place for that purpose.3 Each managing agent is subject to similar requirements as regards each syndicate managed by it, separately for each syndicate year.4 For insurers the general solvency and capital requirements in GENPRU are adumbrated by specific requirements for insurers in INSPRU, which apply both to managing agents, as regards each managed syndicate, and to “the Society”, i.e. Lloyd’s. Each managing agent must ensure that admissible assets are held to cover the technical provisions5 and other “general insurance liabilities” or (if a life syndicate) “long-term insurance liabilities”.6 In addition there must be a solvency margin, i.e. there must also be sufficient admissible assets to cover the capital resources requirement, GENPRU 2.1.13R: that requirement applies to “the Society” (but not to managing agents individually), which must therefore ensure that capital resources equal to or exceeding the capital resources requirement in relation to each member’s business at Lloyd’s are maintained,7 separately for general and for long-term business.8 Those requirements are continuous.