PRU 2.1.9 R requires the Society to ensure, in relation to each member's insurance business, that capital resources equal to or in excess of the member's capital resources requirement (CRR) are maintained. PRU 2.1 sets out the overall framework of the CRR. PRU 7.2 sets out the calculation of the components of the general insurance capital requirement and the long-term insurance capital requirement.
Managing agents are required to calculate the ECR for the purposes of carrying out syndicate ICAs under PRU 2.3. As with-profits insurance business is not carried on through any syndicate, the calculation of the with-profits insurance capital component will not be applicable. PRU 7.4 is not applied to Lloyd's.
The Society must determine the general insurance capital requirement for each member by apportioning the result of LLD 19.2.10 R between members on a fair and reasonable basis, provided that the general insurance capital requirement for a member must not be less than the higher of the result of the premiums amount and the claims amount for that member.
The Society should calculate the premiums amount and the claims amount for each member on the basis of the member's own general insurance business, including insurance business that attaches to the reinsuring member for the purposes of PRU following an approved reinsurance to close (see LLD 17.5.3 R).