5 - Structure of the London Market Flashcards
What is the name of the entity responsible for the management and supervision of the Lloyds market?
The council of Lloyd’s.
What makes up the council of Lloyd’s?
3 working members
3 external members
9 nominated members
What is the name given to groups of private individuals or corporate investors who carry risks?
Syndicates - both types known as underwriting members or ‘names’
For how long does a syndicate exist to accept risks?
One year
What is the role of a managing agent?
Employed by syndicate to manage and employ underwriters to accept risk
What is R&R - Reconstruction and Renewal?
When Lloyd’s reinsured the entire 1992 year of account into Equitas, their new reinsurance vehicle, to create a clean slate.
What is the name used for investors in the Lloyds market who are also commercial organisations in their own right?
Corporate capital
If a Lloyd’s Name feels that they have been badly advised, who will they be complaining about?
The Member’s Agent
What term is given to a company wishing to transact business in the London market?
Insurance undertakings
What are examples of Non-Lloyds insurers?
- Limited liability companies
- Mutuals
- Captives
What is the name of an insurer that only accepts risks from ‘sister organisations’ in the same group?
Captive Insurer
What is the function of the Lloyds market association?
Provide representation, information and technical service to underwriters
What does IUA stand for?
The International Underwriting Association
What are the priorities of the IUA?
- Enhancing business efficiency
- Maintaining dialogue with broking community
- Supporting underwriting and technical committees
Give four reasons why business comes to the London market.
- Capacity
- Entrepreneurial spirit
- Good claims service using knowledgeable personnel
- History and experience
If an underwriter quotes a premium of £5000 and allows brokerage of 25%, how much is paid to the underwriter?
£3750
Who receives premium from the client?
The broker, who then pays the insurer
What is the name for investors in the Lloyds market?
Members
What is meant by the term ‘premium income limit’?
A measure of the size of the insurer based on how much business it can accept in a year.
Which type of insurer typically specialises in risks such as shipowners’ liability?
Mutual indemnity association
Which main body represents brokers operating in the London market?
LIIBA
What is a P&I club?
A mutual organisation formed by a group of individuals who collectively require the same insurance.
