The Society must establish and maintain systems and controls to enable it appropriately to address the risks to which the Lloyd's market is exposed.
The systems and controls in INSPRU 8.2.3 R must include systems and controls to enable the Society to ensure that any assumptions made in calculating a member's capital resources or in determining the individual capital assessment for each member are regularly reviewed and that appropriate action is taken if any assumption is no longer valid.
The Society must take all reasonable steps, including establishing and maintaining adequate systems and controls to enable it:
transactions which may give rise to a conflict of interest, such as those to which the counterparties are:
the provision of capital;
the provision of reinsurance; or
the provision of other services.
The Society must take reasonable steps to ensure that systems and controls established and maintained by managing agents are adequate to ensure that risks to which the insurance business carried on through each syndicate is exposed do not have a detrimental effect on funds at Lloyd's or central assets.
the Society holds and manages funds at Lloyd's and central assets which must be held to support balancing amounts. The Society is required to manage the risks that affect funds at Lloyd's and central assets directly, once the effects of any aggregation and diversification have been taken into account;
managing agents hold and manage some of the financial resources in respect of the insurance business carried on through each syndicate that they manage. Managing agents are required to manage all risks affecting a syndicate except for the risk that funds at Lloyd's and central assets are not available to support the balancing amount.
The Society must establish and maintain effective arrangements to monitor and manage risk arising from:
The arrangements in INSPRU 8.2.11 R must enable the Society to identify any significant overstatement of financial resources resulting from any transaction falling within INSPRU 8.2.11R (2) to INSPRU 8.2.11R (4), including as a result of:
If the Society identifies a significant overstatement of the kind referred to in INSPRU 8.2.12 R, it must ensure that an appropriate adjustment is made, including if appropriate by a deduction from or reduction in the value attributed to:
Notwithstanding that the liability of a reinsured member to a policyholder is unaffected by an approved reinsurance to close as described in INSPRU 8.2.15 G, for the purposes of INSPRU and GENPRU only:
any payment received by a member as consideration for or in connection with an approved reinsurance to close must be treated as a Lloyd's member's contribution and not as premium or as a reinsurance recovery.
a description of the consultation undertaken under INSPRU 8.2.26 R including a summary of any significant responses to that consultation.