Chapter 5 - Structure of the London market Flashcards
What is a limited liability company?
This company is owned by the shareholders
What is the difference between a mutual company and a mutual indemnity company?
A mutual company is owned by the policyholders and mutual indemnity association while still owned by policyholders have their origins in being a self-managed pool.
Where are mutual indemnity associations usually found?
In marine insurance where protection and indemnity clubs insure certain aspects of marine hull liability
What is a captive insurance company?
Insurance owned by a large non-insurance company that insures the risks of its parent company only and not others.
What are the 3 different groups at Lloyd’s?
Syndicates
Managing agents
Members agents
What is a syndicate?
A group of private individuals (names) or corporate members who provide financial backing for risks in Lloyd’s..
What is a managing agent?
A managing agent is employed by Lloyd’s syndicates to employ underwriters who accept risks on behalf of the syndicate.
What is a member agent?
Members agents advise clients on the advantages and disadvantages of investing in the Lloyd’s market, syndicate selection and performance, reserve requirements and compliance issues.
Who are the managing agents in Lloyd’s regulated by?
They are dual regulated by Lloyd’s itself but also by the PRA and FCA
What is the document used to place business called at Lloyd’s?
A ‘Slip’ (Market Reform Contract)
What is the process called of and underwriter signing a slip?
‘Scratching the slip’
Which organisation checks and issues Lloyd’s policies and collects premium on behalf of syndicates?
‘Xchanging’
What is the percentage of the premium called that a broker receives for his services?
Commission also known as a ‘Brokerage’
What restriction was removed by the Legislative reform (Lloyd’s) Order 2008?
The restriction allowing only Lloyd’s brokers to place business at Lloyd’s.
What is contract certainty?
The complete and final agreement of terms (including signed down lines) between the insured and the insurer before inception.
What does it refer to when a broker places more than 100% of a slip and proportionally reducing Lloyd’s syndicates or the insurers share?
Signing down the line.
Who are Lloyd’s insurance brokers? and who are the regulated by?
These are brokers that have proved their knowledge and expertise to the council of Lloyd’s they are regulated by Lloyd’s and the FCA.
What is delegated authority?
Where an insurer gives a intermediary the authorization act on their behalf may be full underwriting authority or only to issue cover notes and make changes to current policies on the insurers’ behalf.
Who are the ABI?
Association of British Insurers represent the interests of UK insurance companies
Who are the IUA?
International Underwriting Association of London - the largest representation organisation for international and wholesale insurance and reinsurance companies.
Who are BIBA?
British Insurance Brokers Association - trade association for independent insurance intermediaries - brokers promoting members views and encouraging the provision of training
Who are LMRC?
London market regional commitee a regional committee of BIBA which works with other London market bodies
Who are LIIBA?
London International Insurance Brokers Association independent trade association representing the interests of London market brokers
Who are LMA?
Lloyd’s Market Association represents and provides technical information on behalf of Lloyd’s managing agents
