Chapter 5

Question 1

What is the term used for the investors in the Lloyd’s Market?
a. Shareholders.
b. Members.
c. Insurers.
d. Agent

Answer 1

B.Members

Question 2

What is the difference between a syndicate and a managing agent?

a. The syndicate bears the risks and the managing agency runs the day to day
business.
b. They are two terms for the same thing. □
c. The managing agency bears the risk and the syndicate runs the day-to-day business.
d. The syndicate is regulated and the managing agency is not.

Answer 2

a. The syndicate bears the risks and the managing agency runs the day to day

Question 3

What is the role of the Council of Lloyd’s?
a. To set the business plans for the market.
b. To run the central market systems.
c. To directly engage with overseas regulators.
d. Management and supervision of the Lloyd’s market

Answer 3

d. Management and supervision of the Lloyd’s market

Question 4

4. Who do Lloyd’s Names use as their professional advisers when deciding to invest in
   the market?
   a. Members’ agents.
   b. Brokers.
   c. Managing agents.
   d. Solicitors.

Answer 4

a. Members’ agents.

Question 5

5. What is meant by the term ‘premium income limit’?
   a. A measure of the size of the insurer based on how much business it can accept in a year.
   b. How much premium any individual client can be asked to pay.
   c. How little premium any individual client can be asked to pay.
   d. The target set by the regulators for insurers each year.

Answer 5

a. A measure of the size of the insurer based on how much business it can accept in a year

Question 6

6. Which type of insurer typically specialises in risks such as shipowners’ liability?
   a. Lloyd’s syndicate.
   b. Mutual indemnity association.
   c. Limited liability company.
   d. Service company.

Answer 6

b. Mutual indemnity association.

Question 7

For whom is the broker usually working in the London Market?
a. The insurer.
b. The insured.
c. Whichever party contracts their services first.
d. Both insurer and insured.

Answer 7

b. The insured.

Question 8

8. Which section of the market does the LMA represent?
   a. Mutual indemnity associations.
   b. Insurance companies.
   c. The regulators.
   d. Managing agents.

Answer 8

d. Managing agents.

Question 9

Which main body represents brokers operating in the London Market?
a. ABI.
b. IUA.
c. LIIBA.
d. LMA.

Answer 9

c. LIIBA.