Managing agents are advised by the syndicate actuary in relation to the long-term insurance business carried on through long-term insurance business syndicates. The standards and guidance issued by the Faculty and Institute of Actuaries to assist syndicate actuaries are important sources of evidence as to generally accepted actuarial best practice, as referred to in PRU 7.2.16 R (1).
For the purposes of PRU 7.2.66 R and further to that rule, in the case of Lloyd's members, amounts of premiums and claims must be adjusted for approved reinsurance to close to exclude any amount included in, or adjustment made to, premiums and claims to reflect the consideration for an approved reinsurance to close.
Members of Lloyd's can effect contracts of approved reinsurance to close with other members in accordance with LLD 17.5. For the purposes of PRU as it applies to Lloyd's, the capital requirement relating to business transacted through an approved reinsurance to close is calculated for the reinsuring and not the reinsured member under the contract.