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.
Subject to LLD 20.2.2 R, PRU 3.1 applies to managing agents and to the Society in accordance with:
for managing agents, LLD 16.3.3 R; and
for the Society, LLD 16.3.1 R.
In accordance with LLD 18.4.2 R, the rules and guidance in PRU 3.1 relating to the establishment and maintenance of a business plan do not apply to the Society.
Subject to LLD 20.3.2 R, PRU 3.2 applies to managing agents and to the Society in accordance with:
for managing agents, LLD 16.3.3 R; and
for the Society, LLD 16.3.1 R.
PRU 3.2.23 R to PRU 3.2.32 G (Large exposure calculation for reinsurance exposures) do not apply to the Society.
For Lloyd's, counterparty exposure is:
for managing agents, the amount by which the net assets managed by or under the direction of a managing agent in respect of a syndicate together with any relevant balancing amount would decrease if the counterparty were to default;
for the Society, the amount by which its net assets (which include those of its subsidiary undertakings) would decrease if the counterparty were to default; and
for the Society's management of each member's funds at Lloyd's, the amount by which the member's net assets would decrease if the counterparty were to default.
For the purposes of PRU 3.2.20 R (Large exposure limits: counterparty exposure and asset exposure), the Society may determine the exposure to any letters of credit, guarantees or members' life assurance policies as an exposure of the members in aggregate.
For the purposes of PRU 3.2.22 R (Large exposure limits: market risk and counterparty limits), the Society must calculate the amount of and deduct from capital resources:
an exposure (expressed as a percentage of the relevant member's capital resources held as funds at Lloyd's), other than to the assets identified in LLD 20.3.5 R (2)(a) to LLD 20.3.5 R (2)(c), of a member's capital resources held as funds at Lloyd's to a counterparty, in excess of the limits in PRU 3.2.22 R;
an exposure in excess of 20% (expressed as a percentage of the aggregate of capital resources held as funds at Lloyd's) of the aggregate of capital resources held as funds at Lloyd's to a single issuer of:
letters of credit;
guarantees; or
members' life assurance policies;
an exposure of its own to a counterparty, in excess of the limits in PRU 3.2.22 R, expressed as a percentage of the Society's own assets.
For the purposes of PRU 3.2.22 R (Large exposure limits: market risk and counterparty limits), managing agents must calculate the amount of and deduct from capital resources an exposure (expressed as a percentage of the admissible assets held in respect of the relevant syndicate) of admissible assets held in respect of a syndicate to a counterparty in excess of the limits in PRU 3.2.22 R.
If the exposures of capital resources held as funds at Lloyd's for members in the aggregate do not exceed the limits in PRU 3.2.22R (3)(c), then, for each individual member, that limit may be replaced by 10%.
For managing agents, in PRU 3.2.33 R and PRU 3.2.35 R, references to an exposure do not include exposure arising from balancing amounts.
PRU 3.3 applies to managing agents and to the Society in accordance with:
for managing agents, LLD 16.3.3 R; and
for the Society, LLD 16.3.1 R.
This chapter applies to the Society for each member, including the capital charge relating to central assets, to the extent that those assets are held to support a particular member.
