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INDEX

Lloyd's: Law and Practice

INDEX INDEX accounts 283–4 ; accounts of corporate members 289; aggregate accounts 288; allocation 285–6 ; auditing 287; Lloyd’s annual report 288; publication and distribution 287; syndicate accounts 284–5 ; underwriting 285–6 active underwriters: appointment 3, 102, 157; Code for Underwriting Agents 139; discreditable conduct 309, 318; fiduciary duties 215; legal proceedings 101; liability 135, 215, 353; management of syndicates 102, 285; new syndicates 107; requirements 31, 55; responsibilities 154; reviews 159; standards of professionalism 43–4 ; suitability 152 administrative suspension 307, 319–20 ; see also intervention order Agency Circumstances procedures 60; fiduciary duties of managing agents 136; new syndicates 106–7 , 108 Agency Department: insurance certificates 345–6 ; salvage arbitrations 345; settlement of claims abroad 346 agents’ agreement 126; Agents’ Syndicate List 126, 147–8 ; standard agents’ agreement 132–3 , 446–455 aggregate accounts 283, 288; legislation 283–5 ; see also accounts aligned capacity 75, 99–100 , 107–10 , 116–18 ; integrated Lloyd’s vehicles 75 annual audit 23–4 annual subscribers 18–19 , 32, 68–9 , 76; enforcement jurisdiction 307, 310; fees and subscriptions 84–5 approved coverholders 4, 172, 199, 202–3 ; approval of coverholders 203–5 ; binding authorities 146, 200, 201, 205, 207; delegated underwriting 200; Franchise Board 202–5 ; professional indemnity insurance 213; restrictions on business 158; see also coverholders approved persons: Financial Services and Markets Act 2000 93, 94, 311; Financial Conduct Authority 154; Financial Services Authority 154 Asia: China 342–3 ; Council of Lloyd’s 339n59; Lloyd’s Asia (Offshore Policies) Instrument 2002 265; Lloyd’s Asia (Singapore Policies) Instrument 2002 265; Lloyd’s Asia Scheme Regulations 338–9 ; Lloyd’s Asian Instruments 268; Singapore 337–9 associates (in Lloyd’s Acts 1871–1982): admission to Room 76 associates of managing agents: mandatory offers 116–7 ; membership of syndicates 106; minority buy-outs 121; new syndicates 109; reputation and standing of 152 syndicate mergers 118–20 auctions 3, 8, 49, 93, 99, 113–14 ; auction proceeds 259, 261; auction rules 3, 113; bilateral arrangements 114; capacity offers 115–16 ; Capital Structure Working Party 50–1 ; minority buy-outs 120–1 ; premiums trust fund 258–259 ; syndicate business forecasts 236; syndicate cessation 121–2 ; transferring syndicate capacity 74, 107, 111, 112 Australia 335–7 basic market activity: FSMA 8–9 , 93–4 binding authorities 4, 29, 29n79, 97, 169n1, 199–201 ; accounting and payments 212, 231; allocation of risks 138; approval of coverholders 203–5 ; authority of coverholders 146; Canada 335; claims handling 211–12 , 226; Contract Certainty Code of Practice 217; delegated authority 158, 169; duty of care 213–14 ; electronic processing 185; fiduciary duties 214–15 ; Franchise Board requirements 206–7 ; insurance certificates 210–11 , 345; Japan 340; Lloyd’s Binding Authority (Quality Assurance) Tool 217; Lloyd’s Claim Scheme (Combined) 221; Lloyd’s Market Association 160; Minimum Standards 217; placing brokers 172; profits taxes 292; provisions in 206–9 ; registration 205; restricted coverholders 202, 205; termination 209; United States 210–11 ; see also approved coverholders; coverholders Brazil 341–2 brokers: broker E&O insurance 182; broker markets 4; disclosure to the leader 196–7 ; dual capacity 179–80 ; open market correspondents 176–7 ; payments to brokers 180–2; placing brokers 172–3; registration 173–5 ; representations to the leader 196–7 ; responsibility for premiums 177; responsibility to clients 178–9 ; statutory monopoly 169–72 ; terms of business agreements 175–6 ; see also Lloyd’s broker callable contributions (New Central Fund) 250, 277 callable layer (New Central Fund) 277 Canada 334–5 111, 114; Capacity Offer Rules 115–16 ; major syndicate transactions 118; membership of syndicates 107; minority buy-outs 120 capacity transfer 112–13 , 147 capital requirements: capital resources requirement 250–1; European Union 247–8 , 252–4 ; Individual Capital Adequacy Standards (ICAS) 251–2; Lloyd’s market 249–50 ; Solvency II 252–4 ; UK insurers 248–9 Capital Structure Working Party 49–51 , 106 Central Accounting 6, 139, 184, 220, 229, 231–2 ; premiums trust fund 260 Central Fund 275–81 , 354–5 ; New Central Fund 11, 276–8 Central Settlement see Central Accounting Centrewrite Limited 40, 46, 52, 54; deceased members 87; cessation of membership 86; reinsurance to close by 103 China 342–3 claims: 1992 and prior business 219; Claims Management Principles and Minimum Standards 227;delegation of claims handling 225–7 ; electronic reporting 229; electronic settlement 229; ICOBS 228; leading underwriter clauses 226; Lloyd’s agents 226; see also Claims Schemes Claims Schemes 6, 211; 1991 Claims Scheme 219; 1994 Claims Scheme 220; 2006 Claims Scheme 220–2 ; 2010 Claims Scheme 222–5 codes of practice: Code of Practice-Delegated Underwriting 216–18 ; Code for Underwriting Agents: Syndicate Expenses 135, 139; Contract Certainty Code of Practice 184, 195n74; Members’ Agents Code of Practice 166; Service Companies Code of Practice 203 Committee of Lloyd’s 6, 20, 23–4 , 26; financial guarantee 243; powers and duties 28, 30, 42, 68; supervision of underwriters 233; Underwriting Agents’ Manual 125 conversion arrangements 88 Conversion Rules 88 corporate members 1–3 , 37, 39, 125, 262; 1993 Business Plan 47–8 , 125; accounts and reporting 284; anti-concentration rules 99; capacity offers 115–16 ; capacity transfers 112–14 ; capital structure 49–50 ; conversion arrangements 88; corporate capital 48; Council of Lloyd’s 65; direct corporate participants 127; Enforcement Committees 311, 315; Funds at Lloyd’s 269–73 ; general meetings 71; individual accounts 289; Limited Liability Partnerships 303; members agents 163; membership 73–5 , 76–9 ; membership agreements 79–81 ; Members’ Compensation Schemes 325n24; New Central Fund 276–8 , 347; obligations 142–3 ; premiums trust deeds 256–7 , 267, 268; profits taxes 291–2 ; Reconstruction & Renewal 53; reinsurance to close 103; reorganisation orders 348; resignation 85; Scottish Limited Partnerships 303; standard managing agents’ agreements 133–42 , 491–528; substitute agents 145–6 ; syndicate membership 107–9 ; syndicate profits 294; syndicate tax computations 295–6 ; taxable profits 297–9 ; taxation of members 302; underwriting 82–3; United States 265 Corporation (of Lloyd’s) 1, 26, 63, 70; corporate capacity 63–5 ; FSMA 8, 94; Lloyd’s Act 1871 20 Council of Lloyd’s 1, 30–2 , 65–6 , 74; 2010 Claims Scheme 225; aggregate accounts 284, 288; Lloyd’s Act 1982 6, 171; premiums trust deeds 259–60 ; substitute agents 356; transfer of business 306; covenant and charge 84; funds at Lloyd’s 10, 11n66, 270–3 coverholders 4, 199–200 ; approved coverholders 4, 199, 202–3 ; approval of 203–5 ; binding authorities 99n12, 138, 146, 169n1, 200–1 , 205; fiduciary duties 214–5 ; placing brokers 172–3; restricted coverholders 4, 158, 199, 202, 205; restrictions on business 158; see also approved coverholders; binding authorities; restricted coverholders Cromer Report 27–9 ; rejecting members’ limited liability 98; underwriting standards 98, 233 declaration of compliance 83, 273 de-emption 111–12 , 147; members’ agents’ agreements 129; standard managing agent’s agreement 134 delegated underwriting 199–200 ; accounting 212–13 ; approval of coverholders 203–5 ; approved coverholders 202–3 ; binding authorities 200–1 , 206–9 ; cancellation of authority 209; claims handling 211–12 ; code of practice 216–18 ; consortia 200–1 ; duty of care 213–14 ; fiduciary duties of coverholders 214–16 ; FSMA 218; lineslips 200–1 , 206–7 ; Lloyd’s requirements 206–7 ; minimum standards 216–18 ; payments 212–13 ; registration of binding authorities 205; registration of restricted coverholders 205; restricted coverholders 202–3 ; Solvency II 218; syndicate service companies 202–3 ; termination of authority 209 direct corporate participants (DCP) 77, 82, 109; agency agreement terminations 117; obligations 143; see also corporate members disciplinary committees see Enforcement Committee dispute resolution: arbitration scheme 323–5 ; member-underwriting agent disputes 322–3 ; members’ compensation scheme 325–6 ; member-Lloyds 327; members’ ombudsman scheme 327; policyholder disputes 321–2 ; syndicate ICA 328; underwriting agent-Lloyd’s 328 electronic placing 185–6 enforcement 307–8 ; appeal from Council decisions 320; Appeal Tribunal 316–17 ; Enforcement Board 312; Enforcement Byelaw 308–10 ; Enforcement Tribunal 313; grounds for action 318–19 ; inquiries 310–11 ; intervention orders 319–20 ; Lloyd’s Council 317–18 ; proceedings 312–15 ; sanctions 315–16 ; skilled person reports 310; see also Enforcement Committee 7, 311–12 ; enforcement proceedings 314; imposing sanctions 315–16 , 319; members’ ombudsman scheme 327; rights of appeal 316 Equitas 6, 12, 141, 275, 305, 356–7 ; Australia 337; claims processes 219; deceased members 87; New Central Fund 277–8 ; premiums trust deeds 256; reinsurance 51–5 ; reinsurance to close (RITC) 103–4 , 160; run-off 245; United States 266, 306 external member of the Society 73–4 external member of the Council 65 external regulation 7–9 Financial Conduct Authority (FCA) 89, 91, 95; aggregate accounts 288; byelaws 67; cooperation arrangements 7, 308; delegated underwriting 218; Enforcement Byelaw 308; FCA Principles for Business 165; insurance mediation activities 171; managing agents 154, 165; premiums trust deeds 259; see also Prudential Regulation Authority (PRA) financial guarantee business 24–5 , 243–4 Financial Services and Markets Act 2000 (FSMA): authorised persons 91; regulated activities 92; regulation of Lloyd’s market 89–90 ; supervision of Lloyd’s market 94–5 ; see also basic market activity; managing agents; members’ agents; regulated activities; secondary market activity Fisher Report 29–33 , 50, 170, 233, 275 following year underwriting 144–5 Franchise Board 2, 6, 59–60 , 66, 68, 69–70 ; 2006 Claims Scheme 221; agency agreement terminations 117; approved coverholders 202–5 ; binding authorities 206–8 , 210; business planning 235–6 ; claims handling 211, 225; delegated underwriting 200; directions to underwriting agents 159; managing agents 136, 151–3 , 155–8 , 164; managing syndicates 102; Market Supervision and Review Committee 310; members’ agents’ agreements 131; Minimum Standards for Delegated Standards 216; new syndicates 106; performance management 235; placing brokers 173; register of binding authorities 205; resolving disputes 328; restrictions on business 158–9 ; reviews 159; run-off 245–6 ; substitute agents 160, 264; syndicate premium incomes 241; underwriting guidelines 237 Franchise guidelines 59, 234, 240 Franchise Principles 58, 234 Funds at Lloyd’s (FAL) 10, 83, 269–70 ; personal reserve sub-fund 273; special reserve fund 274; trust deeds 271–3 funds in syndicate 257n10, 262, 270; corporation tax 296 General Meetings of members of the Society 53, 65n7, 67, 71 General Undertaking 28, 69, 79–80 , 81, 354 General Underwriters Agreement (GUA) 193, 194–5 globals 283 incidental syndicates 97, 148 Individual Capital Adequacy Standards (ICAS) 248, 251–2; New Central Fund 277; Solvency II 253 individual members see Names insolvency procedures 347–50 insurance business transfers 54, 85, 305–6 insurance market direction 9n58, 93, 321–2 integrated Lloyd’s vehicle (ILV) 50, 57, 99 interavailable funds at Lloyd’s/deposit 49; funds at Lloyd’s 271 intervention order 307, 319–20 Japan 339–41 joint certificates 210–11 leaders/leading underwriters: appointment 192; authority 194; disclosure by the broker 196–7 ; duties of care 195–6 ; general underwriters agreement 194–5 ; leading underwriter agreement 192; placing processes 195–6 ; representations by the broker 196–7 ; slips 193 life business 173, 244, 305, 332; Australia 336; premiums trust funds 9–10 ; Singapore 337; United States 332; see also long term business limited liability partnership (LLP) 75, 78, 303; agents’ disputes 323; enforcement 310; members’ agents 2; profits taxes 291; sanctions 315; underwriting members 1 lineslips 109, 158, 181–2 , 195, 200–1 , 206–7 , 286; see also binding authorities Lioncover Insurance Company Limited 34, 52, 54, 103 Lloyd’s: byelaws 66–7 ; constitutional requirements 71; corporate capacity 63–5 ; Council of Lloyd’s 65–6 ; definition 1, 63; governance 69–71 ; Lloyd’s Acts 63; regulatory powers 68–9 ; see also Lloyd’s agents; Lloyd’s brokers; Lloyd’s deposits; Lloyd’s market; Lloyd’s policies; Names; members; Society of Lloyd’s Lloyd’s agents 17, 64, 345; claims 221, 226, 346; insurance certificates 200, 345–6 ; salvage arbitrations 345 Lloyd’s American Instruments (LAI) 212, 260, 265 Lloyd’s American Trust Deeds (LATD) 265 Lloyd’s American Trust Funds (LATF) 265–7 Lloyd’s Asian Instruments 268 Lloyd’s brokers 169–72 , 183–4 ; 2006 Claims Scheme 221; 2010 Claims Scheme 222–4 ; accounting 231–2 ; approved coverholders 202, 203–5 ; binding authorities 205, 206, 212, 213–14 ; broker markets 4; claims abroad 346; claims processes 219–20 ; disclosure and representation 196–7 ; dual capacity 179–80 ; electronic claims reporting 229; electronic placing 185–7 ; enforcement 307–10 , 311n36, 318; errors and omissions insurance 182; insurance certificates 345; litigation 351; misconduct 315, 318–19 ; open market correspondents 176–7 ; payments to brokers 180–2; placing brokers 172–3; registration of brokers 173–5 ; responsibilities 177, 178–9 ; Singapore 337–8 ; statutory monopoly 169, 172; terms of business agreements 175–6 ; United States 265; The Zephyr 188–91 212, 265 Lloyd’s Canadian Trust Fund (LCTF) 267–8 Lloyd’s deposits 64, 84, 233, 263; conversion arrangements 88; funds at Lloyd’s trust deeds 270–4 ; members’ agents 129; overall premium limits 82; taxable profits 299 Lloyd’s Dollar Trust Fund (LDTF) 267 Lloyd’s market: annual audits 23–4 ; business plan 45–8 ; capital structure 48–51 ; constitution 15–17 ; corporate capital 48; Cromer Report 27–9 ; financial assistance for Names 37–8 ; financial guarantee business 24–5 ; Fisher Report 29–33 ; Franchise Model 57–61; guarantees and deposits 19; incorporation 19–21 ; Lloyd’s Act 1911 21; Lloyd’s Act 1982 29–33 ; Lloyd’s Acts 63; LMX 43–5 ; Neill Report 35–6 ; non-marine business 21–3 ; origins 13–15 ; post-R&R strategy 55–7 ; premiums trust funds 23–4 ; Reconstruction & Renewal 51–5 ; task force 38–43 ; trust deeds 17–18 ; Walker Report 43–5 ; World War I 24; World War II 26–7 ; s ee also Lloyd’s; Names Lloyd’s Market Association (LMA) 60, 176, 185n12; managing agents 160–1 Lloyd’s market reorganisation order: insolvency procedures 348 Lloyd’s policies: deceased members 87; Financial Services Compensation Scheme 278; Lloyd’s Policy Signing Office 5, 24–5 , 184, 191 LMP slip 185, 193 London market excess of loss business (LMX) 37, 352; Business Plan 46–7 ; Franchise Guidelines 241; members’ agents’ agreements 129; Walker Report 43–5 , 233 long tail business 352; run-off contracts 254–5 , 353 long term business 243, 244, 244n78, 250, 253; funds at Lloyd’s 269–70 ; overall premium limits 82; premiums trust deeds 259; premiums trust funds 255–6 ; solvency test 281; Special Trust Directions 265; United States 266 managing agents 123, 151–2 ; application of FSMA 154–5 ; conditions 159; decision processes 152–3 ; directions 159; duties 135–6 , 352–3 ; financial resources 157–8 ; ICOBS 228; Lloyd’s Market Association 160–1 ; permission of the Franchise Board 151; powers and duties 135–40 ; remuneration 141; requirements on 155, 159; restrictions on business 158–9 ; reviews 159; substitute agents 160; withdrawal of permission 152 managing agents’ agreements: admission to membership 77; conversion arrangements 88; premiums trust funds 10; standard managing agents’ agreement 133–4 , 455–527; syndicates 2, 3, 10 managing agent’s trustees 10, 101, 131, 152; funds at Lloyd’s trust deeds 271–2 ; Lloyd’s Dollar Trust Funds 267; premiums trust deeds 260, 261n43, 262, 264 mandatory offers 116–17 market reform contract (MRC) 5, 184–5 , 193 members 1–2 ; admission 76–9 ; categories and classes 73–6 ; conversion arrangements 88; deceased members 86–7 ; financial requirements 9; fees 84–5 ; funds 83–4 ; members’ agents 163–5 ; members’ agent’s agreement 127–32 , 416–41; members’ compensation scheme 325–6 ; membership agreement 79–81 , 397–411; membership requirements 82–3; resignation of membership 85–6 ; reviews of members’ affairs 84; subscriptions 84–5 ; termination of membership 85–6 ; underwriting requirements 82–3 members’ agent pooling arrangement (MAPA) 39, 106, 110, 127, 302 members’ agents 163–4 ; application of FSMA 165; codes of practice 165–7 ; financial requirements 165; permission by Lloyd’s 164–5 ; underwriting agents 164–5 ; see also members’ agents’ agreements members’ agent’s agreement 127–32 , 416–41 members’ compensation scheme 325–6 Membership Agreement 79–81 , 397–411 Minimum Standards 216–18 ; claims handling 225, 227; Franchise Board 156; managing agents’ duties 135, 152; performance framework 237–8 ; see also codes of practice minority buy-outs 60, 120–1 ; syndicate mergers 118 mirror syndicates see incidental syndicates multiple syndicates 109–10 , 120, 201; shared reinsurance 242 multi-year contracts 105 Names: cash calls 37, 351, 354–5 ; conversion arrangements 88; deceased members 87; dispute resolution 322; Fisher report 29n79, 30–2 ; indirect Names 215, 353; litigation 37–8 , 51–3 , 351; London Market excess of loss 352; managing agents’ duties 135–6 , 352–3 ; members of Lloyd’s 1; Members’ Agent Pooling Arrangements 106; members’ agents 163–4 , 354; members’ agents’ agreements 127–32 ; members’ compensation scheme 325; mutualisation of liability 38; Neill Report 35–6 , 37; premiums trust deeds 256, 355; Reconstruction & Renewal 356–7 ; reinsurance 45, 54–5 ; relationship with underwriting agency companies 27–8 ; rights 38, 39; standard agency agreements 125–6 , 132–3 ; task force 38–43 ; Walker Report 43–4 ; see also individual member, member Namecos 75 Neill Report 35–7 ; brokers 170; disputes 322; members’ compensation scheme 325; new syndicates 109; standard agency agreements 125, 136 New Central Fund 11–12 , 249, 275, 276–8 ; corporate membership 81; drawdowns 140, 142; fees and subscriptions 85–6 ; insolvency procedures 347; members’ compensation scheme 326 nominated members of the Council 34, 36, 42, 65–6 non-Lloyd’s brokers 136, 173–6 non-underwriting members 19, 73–6 169, 176–7 , 183; accounting 231; Brazil 342; China 342; claims 231; competition law 187–8 ; contract certainty 184–5 ; disclosures by brokers, 196–7 ; electronic placing 185–7 ; followers 192–4 ; general underwriters’ agreements 194–5 ; leaders (duty of care) 195–6 ; leaders 192–4 ; market practice 186–7 ; market reform contracts 184–5 ; premiums 231; relationship between policy and slip 191–2 ; representations by broker 196–7 ; Singapore 337–8 ; The Zephyr 188–91 open market correspondents 176–7 overall allocated capacity 82 overall premium limit (OPL) 81–2 , 85; funds at Lloyds requirements 269–70 ; members’ agents’ agreements 128–9; special reserve funds 274 overseas business 11; Australia 335–7 ; authorisation in the EEA 329–30 ; authorisation outside the EEA 330; Brazil 341–2 ; Canada 334–5 ; China 342–3 ; Credit for reinsurance (US) 333; Japan 339–41 ; Lloyd’s scheme regulations 337–8 ; Singapore 337-9; surplus lines business (US) 332–3 ; trust funds for US licensed business 334; United States 331–2 Overseas Business Regulatory Deposits 9, 11, 101, 255, 259, 261, 263, 268 overwriting 241 parallel syndicates 104, 110, 138, 146; minority buy-outs 120 payment of premiums and claims 231–2 personal reserve sub-fund (PRF) 130, 256, 261, 273; Canada 268; release to on RITC 145 policies see Lloyd’s policies portfolio selection 129, 130, 163, 165–6 , 353–4 pre-emption 111–12 premiums trust deeds (PTD) 7, 47, 256; commentary 259–65 ; delegated underwriting 212; members’ agents 164 premiums trust funds (PTF) 9, 255–68 ; assets 257–8 ; litigation 355–6 ; managing agents 134, 137–42 , 260–2 ; members’ agents 164; permitted trust outgoings 258; structure 256–7 Principles of Relationship 155, 235 PRA-regulated activities 92–3 Prudential Regulation Authority (PRA) 2, 89; see also PRA-regulated activities quasi-corporate members 1 quasi-individual members: arbitration schemes 323; members’ compensation scheme 325; ombudsman scheme 327 recognised accountant 139; appointment 102, 158; audits 287 Reconstruction & Renewal (R&R) 51–5 ; litigation 356–7 ; New Central Fund 275; standard agency agreements 125 regulated activities 8–9 , 248; authorisation under FSMA 91–4 ; EU Insurance Directives 90–1 ; external regulation 8–9 , 90; management of syndicates 102, 115–16 ; managing agents 154; members’ agents 163, 165; supervision 94–5 ; underwriting agents 163 Regulating Trustees 10, 145, 257, 260–2 , 268, 273 reinsurance to close (RITC) 40, 52, 54 99–100 ; agency liability 353; deceased members 87; insurance business transfers 85–6 ; run-off 245–6 ; standard agency agreements 145–8 ; standard managing agents’ agreements 134, 138; supervision of underwriting 242; syndicates 103–5 , 118; trust outgoings 259 related party transactions: disclosure 137, 236, 242; managing agents’ duties 137; syndicate accounts 284–5 reorganisation controller: insolvency proceedings 348–50 restricted binding authorities 158, 172, 200, 210; insurance contracts 210; see also binding authorities; restricted coverholders restricted coverholders 4, 199, 202–3 , 205, 207 risk management principles 239 run-off companies 92n26, 152–3 , 211, 246, 315; enforcement 310–11 ; restrictions on business 159 run-off managers 102, 152, 157, 159, 285 Scottish limited partnerships (SLP) 1, 75, 78, 303; members’ agents 2n12; members’ compensation scheme 324n24; profits taxes 291 secondary market activity: FSMA 8–9 , 94; PRA-regulated activities 93 service companies 136, 172–3, 207, 208; approved coverholders 202; Canada 335; electronic claims reporting 229; Japan 340; restrictions on business 158; Singapore 338–9 several liability 2, 3, 75, 97–8 , 100–1 ; Australia 336; Canada 335 several liability clause 210–11 , 243 Singapore 337 slips 3n21, 5–6 , 100, 183, 318; 2010 claims scheme 222–4 ; binding authorities 207; brokers’ duties 178; electronic claims reporting 229; leaders 192–3 , 194–7 ; MRC Guidelines 207–8 ; open market business 183–91 ; policy and 191–2 Society (of Lloyd’s) 2, 63; byelaws 66; capacity offers 114–15 ; capacity transfer 113; Central Fund 276, 277; Council of Lloyd’s 65–6 ; delegated underwriting by 200; dispute resolution 322–3 , 326, 327; enforcement committees 311; Financial Services and Markets Act 2000 93, 94, 322; fundamental rules of the Society 28, 29, 98; general meetings 71; incorporation 19–21 ; intervention orders 319; litigation 351; Lloyd’s Act 1911 64; members 73–6 ; members’ compensation scheme 326; ombudsman scheme 327; sanctions for misconduct 315; Solvency II 252–4 ; solvency test 281; substitute agents 160; working members 30, 73; see also Lloyd’s SOLPRU 91, 218, 239–40 , 247, 252–4 solvency test 281–2 90–1, 218; capital requirements 247–8 , 252–4 ; delegated underwriting 218; regulation of members 329–30 ; see also SOLPRU special purpose syndicate (SPS) 61, 108, 241 special reserve fund (SRF) 11, 84, 129, 249, 274, 295; syndicate tax computations 295; taxable profits 300, 302–3 Special Trust Directions 137, 139–40 , 265, 268; Lloyd’s American Instruments 265; Lloyd’s American Trust Deed 265; Lloyd’s Asia (Offshore Policies) Instrument 2002 265; Lloyd’s Asia (Singapore Policies) Instrument 2002 265; Lloyd’s Canadian Trust Deed 265; members’ obligations 142; premium trust deeds 260–1 , 263; premiums trust funds 255–6 , 257, 260; reinsurance to close 145 Special Trust Funds: Lloyd’s American Trust Funds 265–7 ; Lloyd’s Asia (Offshore Policies) Instrument 2002 265, 268; Lloyd’s Asia (Singapore Policies) Instrument 2002 265, 268; Lloyd’s Asia Scheme Regulations 338–9 ; Lloyd’s Canadian Trust Fund 267–8 ; Lloyd’s Dollar Trust Funds 267; s ee also Special Trust Directions standard agency agreements 125–7 , 446–455; standard members’ agents’ agreements 126–32 ; standard agents’ agreement 132–3 ; standard managing agent’s agreement 133–150 ; standard managing agent’s agreement 455–527; allocation of risks 138; arbitration 150; capacity transfers 147; cash calls 140, 142–3 , 150; claims 138; commencement 146–7 ; duty of care 135–7 ; fiduciary duties 135–6 ; following year underwriting 144–5 ; generally 133–4 ; governing law 150; jurisdiction 150; managing agents’ powers 137–40 ; members’ obligations 142–5 ; New Central Fund drawdowns 140; nomination of successors 147; notices 150; reinsurance to close 138, 145; remuneration of managing agents 141–2 ; settlement 138; substitute agents 145–6 ; successors 147; syndicate expenses 138–40 ; syndicate members 147–8 ; taking over provisions 148–9 ; termination 146–7 ; variation of agreement 149–50 subscription business 5–6 , 183–97 , claims 219–27 substitute agents: managing agents 145–6 , 160; members’ agent 131–2 , standard managing agent’s agreement 145–6 surplus lines business (USA) 332–3 ; Lloyd’s American Trust Funds 266 surrender arrangements 83n77; capacity offers 115; capacity transfers 113; mandatory offers 116 swap arrangements see surrender arrangements syndicate allocated capacity 11, 38, 105–7 , 111–12 , 157; mandatory offers 116–17 ; minority buy-outs 120–1 ; pre-emption and de-emption 111; syndicate meetings 122 Syndicate and Arbitration Agreement 100, 133 syndicate annual accounts 39, 284–5 ; aggregate accounts 288; audit 287; disclosure 137; managing agents’ duties 137; publication and distribution 287 syndicate auditors 54, 134; appointment 287; claims against 351, 356; liability 353; removal 287; taking over provisions 148 syndicate cessation 121–2 syndicate ICA 95, 102, 235, 238, 249; disputes 328; individual capital adequacy standards 249, 251–2 syndicate list 77, 126, 148; agency appointment 146; members’ agents’ agreements 128–9, 131, 132–4 ; remuneration of the managing agent 141 syndicate meetings 122 syndicate mergers 118–20 syndicates 1, 2–3 , 97–150 ; agency agreement commencements 146–7 ; agency agreement terminations 117–18 , 146–7 ; arbitration 150; auctions 113–14 ; authority 137–41 ; bilateral arrangements 114; capacity offers 114–16 ; capacity transfer 112–13 , 147; changes in participation 110–11 ; de-emption 112; following year underwriting 144–5 ; governing law 150; insurers’ liability 100; jurisdiction 150; legal proceedings 101; major syndicate transactions 118; management 102–3 ; managing agents’ powers 137–140 ; mandatory offers 116–17 ; meetings 122; members’ agents’ agreements 127–32 ; members’ obligations 142–3 ; membership of syndicates 105–7 ; minority buy-outs 120–1 ; multi-year contracts 105; Names obligations 142–3 ; new syndicates 107–10 ; non-marine business 21; notices 150; obligations 142–3 ; participation nominations 147; pre-emption 111; principles of participation 110–11 ; reinsurance to close 103–5 , 145; reinsurers’ liability 100–1 ; relationship between members 100–1 , 123, 147–8 ; remuneration of management agent 141–2 ; several liability 100–1 ; standard agency agreements 125–7 ; standard agents’ agreements 132–3 ; standard managing agents’ agreements 133–7 ; substitute agents 145–6 ; surrender arrangements 115; syndicate cessations 121; syndicate mergers 118–20 ; taking over provisions 148–9 ; variation of agreements 149–50 taking over provisions 123, 148–9 , 150 Task Force 38–53 taxation of members: companies 296; individuals 299; insurance premium tax 304; Limited Liability Partnerships 303; profits taxes 291–3 ; Scottish Limited Partnerships 303; syndicate profits 293–4 ; syndicate tax computations 295; value added tax 303–4 Terms of Business Agreement (TOBA) (Lloyd’s broker-client) 178 Terms of Business Agreement (TOBA) (managing agent-broker) 4, 172, 175–6 transfer agreements 88 transition arrangements 88; capacity transfer 113 turnkey syndicates 107, 138 170, 170n12 underwriting: financial guarantees 243–5 ; Franchise Guidelines 240–1 ; life syndicates 244; overwriting 241; performance framework of minimum standards 237–9 ; performance management 235–7 , 240; reinsurance to close 242; related party transactions 242; risk management 239–40 ; run-off 245–6 ; shared reinsurance 242; supervision 233–5 ; syndicate business planning 235–6 ; syndicate monitoring 235–7 ; war risks 243; see also underwriting agents underwriting agents: permission by Lloyd’s 164–5 ; see also active underwriters; delegated underwriting underwriting guidelines 235; Code of Practice 216–18 ; Franchise Board 237; minimum standards 216 underwriting management principles 216, 238–9 underwriting members 1–2 , 73–6 , 111, 306, 340; capacity transfer 112; delegated underwriting 200; litigation 351; members’ agents’ agreements 128; members’ compensation scheme 326; pre-emption 111; reinsurance to close 103; taking over provisions 149; see also active underwriters; delegated underwriting Underwriting Requirements: admission to membership 76–9 ; appeals tribunals 317, 320; approval of coverholders 203; conduct of inquiries 310; costs 314; delegated underwriting 217–18 ; dispute resolution 328; enforcement 312–14 ; inquiries 310; intervention orders 319; managing agents 151–3 , 155, 157, 159; minimum standards 217–18 ; misconduct 314; run-off 246; sanctions 314; see also underwriting; underwriting members underwriting year accounts 285–6 ; publication and distribution 287 United States 331–2 ; binding authorities 210–11 ; corporate membership 265; Equitas 266, 306; life business 332; Lloyd’s American Instruments (LAI) 212, 260, 265; Lloyd’s American Trust Deeds (LATD) 265; Lloyd’s American Trust Funds (LATF) 265–7 ; Lloyd’s brokers 265; long-term business 266; overseas business 331–2 Value Group 48, 49; 1994 Value Group report 106, 150 war risks 24, 26, 208, 243–5 working member of the Council 74 working member of the Society 73, 74, 311

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