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LM1 DB > Chapter 5 - Structure of the London Market > Flashcards

Chapter 5 - Structure of the London Market Flashcards

1
Q

What is Lloyd’s of London?

A

Marketplace

Society of members

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2
Q

What does the Corporation of Lloyd’s provide?

A

The infrastructure for the marketplace and international liaison

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3
Q

Under what act was the Council of Lloyd’s created?

A

Lloyd’s Act 1982

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4
Q

What is the Council of Lloyd’s responsible for?

A

Management and supervision of the market

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5
Q

Who are the Society of Lloyds and Lloyds Managing Agents regulated by?

A

FCA and PRA

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6
Q

Who are Lloyd’s brokers and members agents regulated by?

A

FCA

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7
Q

What members do the council of Lloyd’s have?

A

3 working - working in the market
3 external - provides capital but not a member
9 nominated members - non-exec

All elected by Lloyd’s members

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8
Q

How often is the chairman and deputy of the council of lloyds elected?

A

Annually by the council

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9
Q

Are all Lloyd’s members approved by the FCA?

A

Yes

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10
Q

Can the Lloyds Council issue byelaws to managing agents?

A

Yes

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11
Q

What are syndicates?

A

Groups of private individuals or investors who carry the risk

aka UW members or NAMES

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12
Q

How many members were there in 2021?

A

90

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13
Q

What is an ‘annual venture’?

A

Renews members known by name, number and YOA

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14
Q

What is a managing agent?

A

Entity appoints UWs who may accept risks on behalf of the UW

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15
Q

What is capital?

A

Investment put into the the market by investors (members or NAMES)

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16
Q

What is RITC?

A

Reinsurance to close

Syndicates reinsure outstanding liabilities with its next YOA

i.e., 2020 reinsure into 2021 accounts

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17
Q

What is R&R?

A

Reconstruction and renewal

18
Q

What was created to reconstruct the market in 1992?

A

EQUITAS

All 1992 and prior risks reinsured into EQUITAS

19
Q

What is syndicate capacity?

A

How much each can write each year

20
Q

What are members agents?

A

Advise whether members invest their capital

21
Q

How do private members now enter the market?

A

Through Limited Liability vehicles

  1. UK Limited Company
  2. LLP - Limited Liability Partnership
22
Q

What is security of tenure?

A

Members have automatic right to participate in the following YOA

23
Q

Is security of tenure a tradable asset?

A

Yes

24
Q

How can a member trade profitable syndicates?

A

Lloyd’s capacity auctions

25
Q

What is limited tenancy?

A

Arrangement with managing agent terminates after predefined period / period of notice

26
Q

What is the company market?

A

Not Lloyd’s

Any company to transact in the London Market must be authorised in the PRA

27
Q

What does the PRA focus on?

A

Requirements (solvency / level of capital)

28
Q

What does the FCA focus on?

A

Conduct of business issues

29
Q

What is the trade body for the company market?

A

IUA

International Underwriting Association of London

Has no regulatory power

30
Q

What are the types of insurers in the company market?

A

Limited liability e.g., Aviva

Mutual indemnity association e.g., P&I clubs

Mutual companies e.g., owned by policyholders, profits retained

Captive insurers e.g., Jupiter and BP - insuring risks for the same group

Service company e.g., syndicate delegates company UW to write on behalf

MGA - delegated authority, binding authority

31
Q

What does the Lloyd’s Market Association (LMA) do?

A

UNDERWRITERS IN LLOYDS

Identify and resolve issues for Lloyd’s UWs

Works with the corporation of Lloyd’s

Policy wordings

Info service for brokers

32
Q

What does the International Underwriting Association of London (IUA) do?

A

UNDERWRITERS FOR COMPANY

International Underwriting Association of London

Representative body

Largest for international and wholesale ins/reins companies

Protect and strength business environment for member companies operating through London

33
Q

What is the ILU?

A

UWS FOR COMPANY

Institute London UWs

M&A

34
Q

What is LIRMA?

A

UWS FOR COMPANY

London Ins Reins Market Association

NM and Reins

35
Q

Is the IUA made up for ILU and LIRMA?

A

Yes

36
Q

What is the Association of British Insurers (ABI)?

A

Not London Market specific

Educate people about UWs

37
Q

What is British Insurance Brokers’ Association (BIBA)?

A

BROKERS

British Insurance Brokers’ Association

Trade association

Intermediaries to conduct/comply

Promote/influence

38
Q

What is London Market Regional Committee (LMRC)?

A

BROKERS

London Market Regional Committee

Integrated in BIBA

Non-statutory trade body

Represents to regulators

39
Q

What is London and International Insurance Brokers Association (LIIBA)?

A

BROKERS IN LONDON MARKET

Trade body - represents

Maintains London’s status as the best market

40
Q

What is Managing General Agent Association (MGAA)?

A

MGAs

Represent on behalf of MGAs

41
Q

Why is London a good market?

A

Capacity

Product to suit the client

Good claims service

History and experience

42
Q
A

LM1 DB (7 decks)

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