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LLD 15.1 Application and purpose1

Application

LLD 15.1.1R

This chapter applies to the Society and to managing agents.1

1
LLD 15.1.2R

A contravention of the rules in this chapter does not give rise to a right of action by a private person under section 150 of the Act (Actions for damages) and each of those rules is specified under section 150(2) of the Act as a provision giving rise to no such right of action.

Purpose

LLD 15.1.3G

The requirements in this chapter lay down a minimum level of disclosure of financial information and of transparency.

LLD 15.1.4G

This chapter requires the Society to report on the insurance business carried on by members and on the assets and liabilities of members and the Society. It also requires managing agents to report on the insurance business carried on through each syndicate they manage. Reporting at syndicate level is required to enable the Society to prepare the Lloyd's Return.1

LLD 15.1.5G

The Lloyd's Return is made annually and contains the statement required from the Society that capital resources at least equal2 to the2 capital resources requirements for general insurance business and long-term insurance business2 under PRU 2 and LLD 19 (Application of PRU 2 to Lloyd's), have been maintained at all times throughout the financial year.2

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LLD 15.1.5AG

2For general insurance business, the capital resources requirement for the Society is the higher of the aggregate of the members' capital resources requirements for general insurance business, calculated in accordance with LLD 19.2.5 R, and the Society GICR. For long-term business, the capital resources requirement for the Society is the aggregate of the members' capital resources requirements, calculated in accordance with LLD 19.2.7 R. The Society is required to ensure that each member's capital resources requirement is covered by that member's capital resources, or, where there is a shortfall in the member's capital resources, by the Society's own capital resources. For general insurance business, the Society must ensure that the Society GICR is covered by the aggregate capital resources supporting the insurance business of all the members.

LLD 15.1.6G

This statement of solvency is required to be supported by sufficient detail to allow the FSA to form an opinion on the adequacy of the matters stated and to evaluate other key financial data. All the information submitted as part of the Lloyd's Return will be made available for public inspection.

LLD 15.1.7G

The Lloyd's Return is based on the return required from insurers, but the format and content have been modified where necessary to reflect the special characteristics of Lloyd's.

LLD 15.1.8G

Where appropriate, the Society is also required to modify reporting to make it more like that of an insurer. This is to aid comparisons between Lloyd's and insurers.