Chapter 5: Structure of the London Market Flashcards
Define ‘Lloyds of London’
A society of members
Define ‘Council of Lloyds’
A council for teh supervision and management of the market, established under Lloyds Act of 1982. It has three working, three external, and nine nominated members
What is a working member of Lloyds?
Someone actively woring for a broker or a managing agent in the Lloyds market
What is an external member of Lloyds?
A member of the society of lloyds but does not fulfil the criteria for a working member
Define ‘syndicates’
Groups of private individuals or coprorate investors who carry the risks
Define ‘names’
The underwriting members
How many syndicates were there at the end of 2022?
92
How long do syndicates exist for?
One year
Define ‘Managing agent’
The entity in the syndicate which appoints underwriters
Define ‘Reinsurance to Close’
When a syndicate’s outstanding liabilities are reinsured into the following year’s accounts
What is Equitas?
A dedicated reinusrance vehicle in the LLoyds market
What was reinsured into Equitas in 1992?
The entirety of the Lloyds market, so the new market started with a clean sheet in 1993
Can you still write in Lloyds with unlimited liability?
If you were already writing in Lloyds on an unlimited basis before 2001, you can, but new Names must have a limited liability
What is the total capacity of any year in LLoyds?
The aggregate capacity for Syndicates in that year
Define ‘members agent’
A firm or company that provides administrative services to Lloyds members- private members who invest in syndicates
What regulatins are there in the London market, compared to the Lloyds market?
None. There are the legal FCA and PFA regulations, but nothing additional like Lloyds has.
Define ‘Limited liability company’
Common type of non-Lloyds insurer.
Define ‘mutual indemnity associations’
Groups of like-minded companies who pool tigether their insurance pots. Non-Lloyds
Define ‘mutual companies’
Owned by policy holders and generally serve a specific group- like NFU. Non-Lloyds
Define ‘captive insurers’
Insurers who are only insuring risks from one sister group- non-Lloyds
Define ‘brokers’
Intermediaries who act as agents of the insured
Define ‘Managing general agent (MGA)’
An organisation given authority by an insurer to undertake different tasks- like accepting risks or handling claims
What is the Lloyd’s Market Association?
The LMA represents managing agents in the Lloyd’s market
What is the International Underwriting Association?
World’s largest representative organisation of insurance companies
What is the Association of British Insurers?
Not specific to the London market, but some of its members are in the London Market. Essentially represents the insurance industry to external players- like the public and the government
WHat is the British Insurance Brokers’ Association?
Major trade association for brokers
What is the London Market Regional Committee?
Part of BIBA, focusses on the region specifically, fits into their broader regional network
What is the London and International Insurance Brokers’ Association?
An independnet trade body, representing the interests of insurance and reinsurance brokers.
What is the Managing General Agents Association?
Trade body that represents MGAs
Why do businesses come to the London market for insurance?
Capacity, because the London market can produce specific products, good claims service, long history and experience
Define ‘contract certainty’
The complete and final agreement of all terms between teh insured and the insurer by the time they enter teh contract, with documentation provided promptly thereafter
Define ‘placing a risk’
When a broker submits a slip/market reform contract
What is Ki?
AI led syndicate that follows terms (never leads though)
Define ‘presenting a claim’
Broker informs various underwriters there has been a claim
