The guidance in this chapter is relevant to the Society.

The guidance in this chapter is intended to:

1. (1)

   promote confidence in the market at Lloyd's by ensuring that it is appropriately and effectively regulated by the Society and the Council and those to whom the Council delegates the Society's regulatory functions;

2. (2)

   protect policyholders and members; and

3. (3)

   enable the FSA to use its resources in an efficient and effective way when regulating underwriting agents, and approved persons acting for or on behalf of those agents, by making it possible for the FSA to rely on the Society and the Council to carry out certain functions on behalf of the FSA or otherwise.

The Society should establish and maintain a clear, appropriate and effective delegation of responsibilities for the carrying out of the Society's regulatory functions, so that the Council can adequately monitor and control them.

The Council should:

1. (1)

   approve and record the delegation referred to in LLD 1.2.1 G; and

2. (2)

   review it at least once each year.

The terms and limits of any delegation of authority referred to in LLD 1.2.1 G should be made clear to those to whom that authority is delegated.

Any committee to which the Society delegates authority under LLD 1.2.1 G should:

1. (1)

   have formal terms of reference;

2. (2)

   make and retain proper records, including minutes of its meetings; and

3. (3)

   be composed of an appropriate number of individuals who are collectively and individually fit and proper.

Any individual or other person to whom the Society delegates authority under LLD 1.2.1 G should:

1. (1)

   have a written statement of the scope of his delegated authority and the purpose for which it is to be exercised;

2. (2)

   make and retain proper records of the exercise of his delegated authority; and

3. (3)

   be fit and proper.

The Society's disciplinary arrangements, including the activities of its disciplinary and appeal committees, should ensure a prompt, fair and independent hearing for any person accused of breaching a byelaw, as required by the Human Rights Act 1998.