LLD 8.1 Application and purpose
Application
This chapter applies to the Society.
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
The rules and guidance in this chapter are intended to promote confidence in the market at Lloyd's, and to protect consumers of certain services provided by the Society in carrying on, or in connection with or for the purposes of, its regulated activities. They do this by ensuring that the Society continues to maintain adequate and effective compensation arrangements for individual members and former members who were individual members in respect of claims against underwriting agents (other than claims for losses arising only from underwriting or investment risk).
The compensation scheme will not compensate members or former members if firms are unable to satisfy claims made in connection with regulated activities relating to their participation in Lloyd's syndicates. Separate rules and guidance are therefore required.