Chapter 5: Structure of the London Market

Question 1

Define ‘Lloyds of London’

Answer 1

A society of members

Question 2

Define ‘Council of Lloyds’

Answer 2

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

Question 3

What is a working member of Lloyds?

Answer 3

Someone actively woring for a broker or a managing agent in the Lloyds market

Question 4

What is an external member of Lloyds?

Answer 4

A member of the society of lloyds but does not fulfil the criteria for a working member

Question 5

Define ‘syndicates’

Answer 5

Groups of private individuals or coprorate investors who carry the risks

Question 6

Define ‘names’

Answer 6

The underwriting members

Question 7

How many syndicates were there at the end of 2022?

Answer 7

92

Question 8

How long do syndicates exist for?

Answer 8

One year

Question 9

Define ‘Managing agent’

Answer 9

The entity in the syndicate which appoints underwriters

Question 10

Define ‘Reinsurance to Close’

Answer 10

When a syndicate’s outstanding liabilities are reinsured into the following year’s accounts

Question 11

What is Equitas?

Answer 11

A dedicated reinusrance vehicle in the LLoyds market

Question 12

What was reinsured into Equitas in 1992?

Answer 12

The entirety of the Lloyds market, so the new market started with a clean sheet in 1993

Question 13

Can you still write in Lloyds with unlimited liability?

Answer 13

If you were already writing in Lloyds on an unlimited basis before 2001, you can, but new Names must have a limited liability

Question 14

What is the total capacity of any year in LLoyds?

Answer 14

The aggregate capacity for Syndicates in that year

Question 15

Define ‘members agent’

Answer 15

A firm or company that provides administrative services to Lloyds members- private members who invest in syndicates

Question 16

What regulatins are there in the London market, compared to the Lloyds market?

Answer 16

None. There are the legal FCA and PFA regulations, but nothing additional like Lloyds has.

Question 17

Define ‘Limited liability company’

Answer 17

Common type of non-Lloyds insurer.

Question 18

Define ‘mutual indemnity associations’

Answer 18

Groups of like-minded companies who pool tigether their insurance pots. Non-Lloyds

Question 19

Define ‘mutual companies’

Answer 19

Owned by policy holders and generally serve a specific group- like NFU. Non-Lloyds

Question 20

Define ‘captive insurers’

Answer 20

Insurers who are only insuring risks from one sister group- non-Lloyds

Question 21

Define ‘brokers’

Answer 21

Intermediaries who act as agents of the insured

Question 22

Define ‘Managing general agent (MGA)’

Answer 22

An organisation given authority by an insurer to undertake different tasks- like accepting risks or handling claims

Question 23

What is the Lloyd’s Market Association?

Answer 23

The LMA represents managing agents in the Lloyd’s market

Question 24

What is the International Underwriting Association?

Answer 24

World’s largest representative organisation of insurance companies

Question 25

What is the Association of British Insurers?

Answer 25

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

Question 26

WHat is the British Insurance Brokers’ Association?

Answer 26

Major trade association for brokers

Question 27

What is the London Market Regional Committee?

Answer 27

Part of BIBA, focusses on the region specifically, fits into their broader regional network

Question 28

What is the London and International Insurance Brokers’ Association?

Answer 28

An independnet trade body, representing the interests of insurance and reinsurance brokers.

Question 29

What is the Managing General Agents Association?

Answer 29

Trade body that represents MGAs

Question 30

Why do businesses come to the London market for insurance?

Answer 30

Capacity, because the London market can produce specific products, good claims service, long history and experience

Question 31

Define ‘contract certainty’

Answer 31

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

Question 32

Define ‘placing a risk’

Answer 32

When a broker submits a slip/market reform contract

Question 33

What is Ki?

Answer 33

AI led syndicate that follows terms (never leads though)

Question 34

Define ‘presenting a claim’

Answer 34

Broker informs various underwriters there has been a claim