INSPRU 8.2 Special provisions for Lloyd's

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Management of risk

INSPRU 8.2.11R

The Society must establish and maintain effective arrangements to monitor and manage risk arising from:

  1. (1)

    conflicts of interest (including in relation to (2) to (4));

  2. (2)

    inter-syndicate transactions, including reinsurance to close and approved reinsurance to close;

  3. (3)

    related party transactions; and

  4. (4)

    transactions between members and itself.

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Insurance receivables to be carried to trust funds

INSPRU 8.2.19R

The Society must take all reasonable steps to ensure that each member:

  1. (1)

    executes the appropriate Lloyd's trust deeds; and

  2. (2)

    carries to the appropriate Lloyd's trust fund all amounts received or receivable by the member, or on its behalf, in respect of any insurance business carried on by it.

INSPRU 8.2.20R

The Society must carry all amounts it receives on behalf of any member in respect of that member's insurance business to the appropriate Lloyd's trust fund.

INSPRU 8.2.21R

A managing agent must carry all amounts it receives on behalf of any member in respect of that member's insurance business to the appropriate Lloyd's trust fund.

INSPRU 8.2.22R

In complying with INSPRU 8.2.19 R to INSPRU 8.2.21 R, the Society and managing agents must take all reasonable steps to ensure that amounts received or receivable by a member in respect of general insurance business and long-term insurance business are carried to separate Lloyd's trust funds.

Amendments to byelaws, trust deeds and standard form letters of credit and guarantees

INSPRU 8.2.23R

The Society must, as soon as it is practical to do so, notify the appropriate regulator of its intention to approve the form of any new Lloyd's trust deed.

INSPRU 8.2.24R

The Society must, as soon as it is practical to do so, notify the FCA 2of its intention to make any amendment which may alter the meaning or effect of any byelaw, including:

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  1. (1)

    any Lloyd's trust deed;

  2. (2)

    any standard form letter of credit prescribed by the Society from time to time; or

  3. (3)

    any standard form guarantee agreement prescribed by the Society from time to time.

INSPRU 8.2.25R

The Society must provide the FCA2with full details of:

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  1. (1)

    the form of any new Lloyd's trust deed it intends to approve, as described in INSPRU 8.2.23 R and

  2. (2)

    any amendments falling within INSPRU 8.2.24 R.

INSPRU 8.2.26R

The Society must consult interested parties in relation to any new Lloyd's trust deed and in relation to any amendment falling within INSPRU 8.2.24 R.

INSPRU 8.2.27G

Except in urgent cases, the Society should consult in relation to any new Lloyd's trust deed or amendments before the new deed or amendments take effect.

INSPRU 8.2.28R

The information provided to the 2FCA2by the Society under INSPRU 8.2.25 R must include:

  1. (1)

    a statement of the purpose of any proposed amendment or new Lloyd's trust deed and the expected impact, if any, on policyholders, managing agents, members, and potential members; and

  2. (2)

    a description of the consultation undertaken under INSPRU 8.2.26 R including a summary of any significant responses to that consultation.

INSPRU 8.2.29G

The FCA2would normally expect to receive the information required under INSPRU 8.2.25 R and INSPRU 8.2.28 R not less than three months in advance of the proposed change.

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