INSPRU 8.2 Special provisions for Lloyd's

The Society must ensure that all participants in the Lloyd's market are made aware of their obligations under INSPRU and GENPRU.

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.

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:

1. (1)

   any differences in the amounts recorded as due or payable by each party to any such transaction; or

2. (2)

   any actual or likely disputes between the parties to any such transaction.

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:

1. (1)

   the capital resources of any member concerned; or

2. (2)

   the Society's capital resources.

A managing agent must, as soon as possible, give the Society any information the managing agent has concerning material risks to funds at Lloyd's or central assets.

A managing agent need not comply with INSPRU 8.2.17 R if the managing agent knows that the Society already has the relevant information.

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.

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.

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.

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.

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.

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

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.

The Society must provide the appropriate regulator with full details of:

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.

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.

The information provided to the appropriate regulator by 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.