LLD 15.1 Application and purpose1
Application
This chapter applies to the Society and to managing agents.1
1A 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
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
The Lloyd's Return is made annually and contains the statement required from the Society that capital resources at least equal2 to the2capital 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
2 1 2 2 2 1 2 1 22For 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'scapital resources requirement is covered by that member'scapital resources, or, where there is a shortfall in the member'scapital 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.
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.
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.