acreditation of lloyd's brokers

LLOYD’S BROKERREGISTRATIONA GUIDE FOR APPLICANTS

Foreword 3

1 Executive summary 4

2 The registration process 6

How do we become a

registered Lloyd’s broker?

3 The requirements 10

for registrationWhat is required and what do

we have to think about?

4 How business is processed 15

at Lloyd’sWhat are the market processes

and how do we comply?

5 Considerations for 20

non-EU brokers

6 Frequently asked questions 21

Appendices

A Lloyd’s legal framework 22

B The role of Xchanging 23

C Market Reform Initiatives 24

Lloyd’s provides this document (the “Document”) for generalinformation purposes only. The information contained in thisDocument is correct to the best of Lloyd’s knowledge at the timeof publishing but may change over time. The Document isreviewed and updated from time to time.

If you have further enquiries regarding this Document, pleasecontact Lloyd’s Admissions on +44 (0)20 7327 6415.

Regulatory Disclaimer1. The communication of information and services set out in thisDocument is not intended for distribution to, or use by, anyperson or entity in any jurisdiction or country where suchdistribution or use would be contrary to local law or regulation. Inparticular, the contents and/or subject matter of the Documentdo not constitute an offer of information, products or services toUS persons or in the United States, or in any other jurisdictionswhere such an offer may be unlawful.

2. Furthermore, the Document does not represent a prospectusor invitation in connection with any solicitation of capital. Nordoes it constitute an offer to sell securities or insurance, asolicitation of an offer to buy securities or insurance, or adistribution of securities in the United States or to a US person,or in any other jurisdiction where it is contrary to local law. Suchpersons should inform themselves about and observe anyapplicable legal requirement.

3. This Document provides information on Lloyd’s and theapplication process in connection with Lloyd’s registration ofbrokers to transact business at Lloyd’s. This communication is not,and does not purport to be, a complete account of all mattersthat are or may be material to a decision as to any application.All applications will be considered on their own merits.

4. Lloyd’s provides the material contained in this Document orcommunication for general information purposes only.

5. No responsibility or liability is accepted by the Society ofLloyd’s, the Council, the Franchise Board or any other Committeeor Board constituted by the Society of Lloyd’s or the Council orany of their respective members, officers or advisors for any lossoccasioned to any person acting or refraining from action as aresult of any statement, fact, figure or expression of beliefcontained in this Document or communication.

6. Applicants and potential applicants should take steps tounderstand Lloyd’s, the Lloyd’s market and the implications ofplacing business in it. Applicants should understand that risk isthe nature of insurance business and is inherent in the businessunderwritten at Lloyd’s.

Copyright notice

© Lloyd’s 2007. All rights reserved. No part of this Document maybe copied or reproduced in any material form, including beingstored in any medium by electronic means, photocopying,recording or otherwise, or transmitted in any form by any means,whether electronic, mechanical or otherwise, without the writtenpermission of Lloyd’s.

ForewordLloyd’s and the global insurance industryLloyd’s plays a significant role in both the UK economy and the global insuranceindustry. It is the largest subscription market, a recognised leader of specialistunderwriting and the world’s third largest non-life reinsurer*:

The Lloyd’s Market comprised 66 Lloyd’s syndicates with an overall marketcapacity of £16.1bn of gross premiums as at 31 March 2007.

Most of the insurance business accepted by Lloyd’s is placed through aregistered Lloyd’s broker, of which there were 166 as at 31 March 2007.

Lloyd’s currently enjoys A+ (Strong, Positive Outlook) and A (Excellent,Stable Outlook) ratings from Standard & Poor’s and AM Best, respectivelyand A+ (Strong, Stable Outlook) rating from Fitch.

Lloyd’s transacts business in more than 200 countries and territoriesworldwide. Details of the countries in which Lloyd’s is licensed to operatecan be found at lloyds.com/lloyds_worldwide

*Standard & Poor’s Global Reinsurance Highlights 2006.Source of figures: – Lloyd’s, March 2007

Lloyd’s vision and prioritiesThe vision for Lloyd’s is to be the platform of choice for insurance andreinsurance buyers and sellers to access and trade both specialist and largeproperty and casualty risks.

A key priority for Lloyd’s in achieving this vision is to work on eliminating theactual and perceived complexity of operating in the market and make it easierfor brokers to do business at Lloyd’s. We are also determined to improve theaccessibility of Lloyd’s to brokers around the world.

Lloyd’s priorities for development may be found on our website atwww.lloyds.com/About_Us/Strategy

Lloyd’s brokersLloyd’s offers brokers an insurance market with diverse participants with differingstrategies and risk appetites, where policyholders benefit from Lloyd’s reputationand service quality. Although based in London, Lloyd’s is open to specialistinsurance brokers irrespective of their physical location.

Lloyd’s welcomes applications from brokers, in the UK or overseas, who wish tobecome registered Lloyd’s brokers in order to place business directly in theLloyd’s market and who maintain high levels of professionalism, integrity andcustomer service.

The remaining sections of this guide explain how you can become a registeredLloyd’s broker. Any queries on the matters covered in this guide should bedirected to:

Lloyd’s Agents and Brokers DepartmentTelephone +44 (0)20 7327 6415Fax +44 (0)20 7327 6688Email [email protected]

4 Lloyd’s Broker Registration

1 Executive SummaryIntroductionThis guide explains the process you will need to go through to become a registeredLloyd’s broker. It also highlights the information we will need and the key issues youwill need to consider. The information in this guide is structured as follows:

• The registration process (Section 2)

• The requirements for registration (Section 3)

• How business is processed at Lloyd’s (Section 4)

• Considerations for non-EU brokers (Section 5)

• Frequently asked questions (Section 6)

The decision whether or not to accept you as a Lloyd’s broker is made by theFranchise Board under the Intermediaries Byelaw. A summary of the contents of thisbyelaw is set out at Appendix A.

Registered Lloyd’s broker or approvedcoverholder?There are two principal ways that Lloyd’s syndicates may access risks; through aregistered Lloyd’s broker or through a Lloyd’s approved coverholder. You shouldtherefore consider whether your firm wants to become a registered Lloyd’s broker oran approved Lloyd’s coverholder, or both. The main differences are as follows.

A registered Lloyd’s broker usually acts as a wholesale or retail broker,acts at all times in the best interests of its clients and can refer any typeof business to any Lloyd’s syndicate.

An approved coverholder acts as the agent of specific Lloyd’s syndicatesunder a contract called a binding authority (sometimes known as ‘agencybusiness’). This allows the coverholder to enter into contracts of insuranceon behalf of the relevant syndicate(s).

Therefore if you only intend to act as an agent for Lloyd’s syndicates you may onlyneed approval as a coverholder. For further information on Lloyd’s coverholdersplease see our website at www.lloyds.com/coverholders

Registration processThe process and indicative timescales for a typical new broker application are set outin section 2 of this guide. In summary, this involves:

Pre-application meetings with Lloyd’s, to clarify the application processand requirements.

Formal application to Lloyd’s.

Obtaining third party confirmations:

� from Xchanging that you are competent to process business at Lloyd’s(see Appendix B for further details on Xchanging); and

� from a managing agent, that it will agree to enter into a Terms ofBusiness Agreement with you.

Registration as a Lloyd’s broker, subject to Lloyd’s being satisfied with theXchanging and managing agent confirmations received.

Lloyd’s Broker Registration 5

Registration requirementsOur registration requirements are set out in section 3 of this guide. It is for you todemonstrate to us that you meet these requirements and are eligible to be registeredas a Lloyd’s broker. In summary, we require:

Appropriate regulatory approval by the FSA or by the relevant authority inan EU member state (or, outside the EU, by an equivalent overseasregulatory authority).

Adequate systems and procedures to conduct business in the Lloyd’sinsurance market.

Support from at least one Lloyd’s managing agent to enter into a Terms ofBusiness Agreement (“TOBA”) with your firm.

Suitable procedures to safeguard insurance monies.

Professional indemnity insurance that meets our minimum requirements.

No prohibited associations with Lloyd’s managing agents.

If your firm is established outside the EU, additional requirements apply.

Lloyd’s application fee for a new Lloyd’s broker is £5,000, to be paid when you makeyour application (payable to the ‘Corporation of Lloyd’s’). We will not refund this fee ifyour application is unsuccessful. There is no ongoing Lloyd’s charge to brokers forplacing and processing business at Lloyd’s.

How business is processed at Lloyd’sAn overview of how business is processed at Lloyd’s is set out in section 4 of thisguide. Lloyd’s is a marketplace made up of many separate syndicates and for thisreason, various functions have traditionally been performed centrally on behalf of allLloyd’s syndicates:

Processing premiums

Checking or producing policies (where required)

Agreeing and settling some claims

Providing data on behalf of the market for regulatory purposes

Operating a central settlement system between syndicates and brokers,with a single daily movement of monies between parties.

While at present, these back office functions are performed by Xchanging, there isincreasing scope for direct trading between parties.

What does Lloyd’s expect of a registeredbroker?If you become a registered Lloyd’s broker you will be required to maintain anduphold high standards of service and professionalism. In particular, we will expectyou to:

Have signed TOBAs with each managing agent you do business with.

Place business into the Lloyd’s market.

Take all reasonable steps to protect our reputation and brand.

Conduct your business in a professional manner at all times.

Comply with any relevant UK or foreign insurance legislation orregulatory requirements.

A number of frequently asked questions are set out in section 6 of this guide.


2 The Registration ProcessOverview of the registration processAn overview of the application process to become a registered Lloyd’s broker issummarised in the flow chart below. An explanation of each step in the process isset out in the following pages.

1 Broker pre-application meetings with Lloyd’s and Xchanging to clarify theapplication process and requirements and understanding of how to processbusiness at Lloyd’s

�

2 Broker submits application form and application fee to Lloyd’s

�

3 Lloyd’s reviews the application for appropriate regulatory authorisation, PI coverand client money protection and may give conditional approval of registration,subject to confirmation of a suitable TOBA and demonstration of businessprocessing ability

Lloyd’s service level – 1 week (UK/EU) (4 weeks for non EU territories)

�

4 (a) Broker prepares and submits Xchanging process manual, business scenariosand banking mandates to Xchanging & Lloyd’s

– At the same time –

(b) Broker seeks and obtains confirmation of a suitable TOBA from amanaging agent

�

5 Xchanging reviews suitability of broker systems to process business, proceduredocument, business scenarios and mandates

Xchanging indicates if substantially complete OR identifies significantweaknesses with indicative remedial action

Xchanging service level 1 week (plus 2 weeks to set up mandates)

�

6 Lloyd’s, on receipt of a TOBA confirmation and suitable Xchanging sign off:a) confirms that registration conditions have been met; and b) adds the broker to the public register of Lloyd’s brokers available on

www.lloyds.com


Pre-application meetings Before you apply, please contact Lloyd’s Admissions to explain that you areinterested in becoming a registered Lloyd’s broker. You will then be invited to attendan initial meeting at Lloyd’s.

Initial meeting

The initial meeting allows us to discuss with you at an early stage whether becominga Lloyd’s broker is right for your firm and gives you the chance to find out moreabout what you need to do to become a registered Lloyd’s broker.

At the meeting we will explain the registration process and requirements in moredetail and will ask you to explain the status of your firm against the registrationrequirements. As a result of this meeting:

We may decide that you have the potential to become a registered Lloyd’sbroker and invite you to proceed to the next stage and attend a pre-application meeting.

Alternatively, there may be some areas which you would need to work onbefore you proceed or you may not be eligible to become a registeredLloyd’s broker. We will explain why this is the case.

Pre-application meeting

At the pre-application meeting we will look more closely at whether your firmsatisfies our registration requirements. In preparation for this meeting, you will beinvited to complete the application form in draft and start work to obtain thenecessary confirmations to support your application, including:

• Evidence of appropriate regulatory approval from your regulator

• Confirmation from your bank that client money is held in strictlysegregated client money accounts

• PI insurance certificates (or quotes at this stage) evidencing compliancewith our minimum PI cover requirements

• Confirmation from your external professional legal advisors that there areno divestment issues (where necessary)

• Confirmation from at least one Lloyd’s managing agent that it would enterinto a TOBA with your firm (see below)

• Confirmation from Xchanging that you have sufficient knowledge andability to transact and process Lloyd’s market business (see below)

We expect the first 4 of these confirmations to be in place and that work will beunderway on the latter 2 at the time of the pre-application meeting.

Representatives of your senior management team should come to this meeting. Wewill be represented by staff from Lloyd’s Admissions and from Xchanging.

At the meeting, we will use your draft application form and supportingdocumentation as an agenda. We will ask you to talk us through each area of theform and, in particular, update us on the status of each of the areas requiringexternal confirmation. As a result of this meeting:

We may decide that you are ready to proceed to the next stage and inviteyou to make a formal application.

Alternatively, there may be some areas which you would need to workon before you proceed to formal application. We will explain why this isthe case.


Xchanging and managing agentconfirmations The ability to transact and process business in the Lloyd’s market is a key factor indeciding whether your firm should be registered.

Only applicants who can properly connect to the necessary systems andcompetently transact Lloyd’s business (using their own systems or thoseof an outsource provider) will be eligible to be Lloyd’s brokers.

In practice this will be assessed by asking Xchanging (or other appropriatethird party) to work with you to assess whether your firm (or its outsourceprovider) can operate the necessary accounting and settlement and claimsadvice and settlement processes to transact at Lloyd’s (see section 4 ofthis guide for further details).

You will need to make contact with Xchanging and provide all necessaryinformation and documentation to enable an assessment to be made ofyour ability to place, process and service business. Such enquiries shouldbe directed to:

Kerry Rainer, Customer Services, Xchanging+44 (0)20 7780 6999 [email protected]

Xchanging will review your submission and indicate if it is substantiallycomplete, or alternatively, identify any significant weaknesses withindicative remedial action.

Xchanging will do this within 1 working week from the time it receives acomplete applicant submission.

You will also need to obtain written confirmation from at least one Lloyd’s managingagent that it is prepared to enter into a Terms of Business Agreement (“TOBA”) withyour firm, on successful registration as a Lloyd’s broker.

Obtaining the Xchanging and managing agent confirmations is typically themost time consuming part of the registration process. In view of this, weinvite formal applications while work is still underway in these areas.

Formal applicationOnce a complete application pack, including the Lloyd’s application form, associateddocumentation, supplementary information and application fee has been received,we will then do the following:

Review your application to assess compliance with our requirements inrespect of regulatory authorisation(s), professional indemnity insurancecover limits, client money arrangements and prohibited relationships (asdefined in the Lloyd’s Act 1982 – see Appendix A).

Tell the Lloyd’s Market about your application through the Lloyd’s MarketAssociation.

Check with the FSA, or your local equivalent regulator, to identify anyregulatory issues affecting your firm or its directors and employees.

If satisfied with your application, we will advise you that we would bewilling to grant your firm registered Lloyd’s broker status, subject to youproviding us with written confirmations from:

1 a managing agent, agreeing to enter into a terms of business agreementwith your firm; and

2 Xchanging, confirming that you have demonstrated a satisfactory standardof business processing ability.

Alternatively, we will advise you of any other matters which need to beaddressed before your application may proceed.


Subject to your application being complete, we will give you this confirmation within1 working week if your firm is based in the UK or a member state of the EU. If yourfirm is established outside the EU, we will normally need to undertake additionalwork (see Section 6, Issues for overseas brokers to consider) and will give you thisconfirmation within 4 working weeks.

Applications which do not contain all the relevant documents and information will betreated as incomplete and returned to you to complete before we can start work onyour application.

Registration as a Lloyd’s brokerOn receipt of suitable written confirmation from Xchanging (confirming your ability toplace, process and service business, the allocation of a broker number andpseudonym and receipt of all necessary bank mandates) and confirmation from amanaging agent (that it will enter into a TOBA with your firm), we will:

• Advise you and the Lloyd’s market of your registration as a Lloyd’s broker.

• Add your name to the public register of Lloyd’s brokers.

We have an expectation that as a new Lloyd’s broker, you will place business atLloyd’s, although you may of course place business with other carriers.

Permitted use of the Lloyd’s Brand

Use of the Lloyd’s name and logo is only permitted under certain circumstances. Fulldetails on how and when you can use the Lloyd’s name are contained within aseparate guide provided to all successful applicants once registered. In summary: –

Registered Lloyd’s brokers may use the Lloyd’s brand on their businessdocuments, stationery and web site to market their firm, subject to thecontinued placing of business at Lloyd’s and compliance with Lloyd’sBroker Brand Guidelines.

If you are not placing business at Lloyd’s within a 6 month timeframe, wewill consider whether it is appropriate for you to continue to use theLloyd’s brand to market your firm (you may nevertheless continue to brandLloyd’s specific products).

In the event that you place no business at Lloyd’s within a 12 monthtimeframe, we will consider whether it is appropriate for you to continueto be registered as a Lloyd’s broker.

Further review of business processing ability

In the second year of your registration, we will ask Xchanging to carry out a review toassess your continuing ability to process business effectively within the Lloyd’smarket. This will include your performance in the areas of late premium payment,document quality, and meeting London Market Reform Standards.


3 The Requirements for Registration Intermediaries ByelawAll Lloyd’s brokers are required to comply with the Lloyd’s Intermediaries Byelaw.A summary of the contents of this byelaw is set out at Appendix A.

Under the Intermediaries Byelaw, Lloyd’s new broker applicants must demonstratethat they meet the following requirements:

Appropriate regulatory approval by the FSA or by the relevant authority inan EU member state (or, outside the EU, by an equivalent overseasregulatory authority).

Adequate systems and procedures to conduct business in the Lloyd’sinsurance market.

Support from at least one Lloyd’s managing agent to enter into a Terms ofBusiness Agreement (“TOBA”) with your firm.

Suitable procedures to safeguard insurance monies.

Professional indemnity insurance that meets our minimum requirements.

No prohibited associations with Lloyd’s managing agents.

Each of these areas is considered in turn below, with a number of additionalconsiderations.

Appropriate regulatory approvalUK applicants

If your firm is established within the United Kingdom, you must be authorised as ageneral insurance intermediary to conduct the applicable regulated activities by theFinancial Services Authority (FSA).

You can obtain a copy of the relevant FSA handbook and application forms forauthorisation from the FSA website www.fsa.gov.uk

As part of your application we will ask you to provide a copy of your writtenauthorisation from the FSA and details of any subsequent regulatory issues whichmay have arisen in respect of your firm as part of your application.

Applicants from other European Union (“EU”) States

If your firm is established outside the UK but within a member State of the EU youmust be registered with the appropriate body responsible for implementing theprovisions of the European Parliament and Council Directive of 9th December 2002on insurance mediation (No 2002/92/EC) in that country.

The conduct of insurance intermediation by a branch office, or subsidiary of an EUbroker which is located in the UK, is permissible by virtue of the “cross borderservices passport” option enabling brokers to trade within other EU member states ifauthorised within their own country. Any application from non UK EU brokers mustprovide evidence of registration by the home state authorities and notification to theFSA of their intention to conduct business in the UK under the passport option.

Applicants from outside the EU

If your firm is established in a country outside the EU, you must be registered withthe appropriate regulatory authority in that country (where required to do so bythat country).


We will look at the extent to which your local regulatory authority imposes similarrequirements to those imposed under the Insurance Mediation Directive (“IMD”):

If the local regulatory authority imposes similar requirements to thoseimposed under the IMD, then we may, at our discretion, choose to rely onthat regulatory authority.

If the local regulatory authority does not impose similar requirements tothose imposed under the IMD, we will ask you to demonstrate yoursuitability and to complete a fuller application form that addresses suchmatters. In particular we will consider the following areas (see section 5,for further details):

� your knowledge and ability to conduct business at Lloyd’s;

� whether your directors, partners, employees and controllers are of goodrepute;

� the adequacy of your capital and financial resources;

� your compliance with local laws and requirements.

You will need to show that your firm does not need to be authorised bythe FSA to trade in the UK.

If you are an overseas subsidiary, holding company or under common control with anexisting registered Lloyd’s broker, we may, at our discretion, allow you to be subjectto fewer suitability checks than would ordinarily be performed for overseas brokers(see section 5 for more details).

Systems and procedures to conductbusiness in the Lloyd’s market The ability to transact and process business in the Lloyd’s market is a key factor indeciding whether your firm should be registered.

You must demonstrate that you can properly operate the necessary accounting andsettlement and claims advice and settlement processes to transact at Lloyd’s (usingyour own systems or those of an outsource provider) in order to be eligible tobecome a Lloyd’s broker.

In practice this capability will be assessed by asking Xchanging (or other appropriatethird party) to work with you to assess whether your firm (or its outsource provider)has the necessary competence.

In view of the importance of this area, an overview of how business is processed atLloyd’s is set out in Section 4.

Terms of Business Agreements We only want to register brokers who have Lloyd’s market support and will actuallybring business to Lloyd’s. Your application must therefore include at least one letterfrom a Managing Agent confirming that they will sign a terms of business agreementwith you once you are registered (to be signed by a director on behalf of thatmanaging agent).

When you become registered, you must sign a terms of business agreement witheach Lloyd’s managing agent you intend to deal with before you start trading withsyndicates managed by that managing agent.

The terms of business agreement must record the general terms and conditions youand the managing agent will do business under. You must negotiate the detail of theagreement with each managing agent, but it must cover at least the following areas.


Broker’s authority

The terms of business agreement must clearly set out what authority the managingagent gives you.

Premium and claims

The terms of business agreement must set out the broker’s and managing agent’sresponsibilities regarding the holding and payment of premiums and claims monies(including the timing of such payments).

Ownership of and access to records

The terms of business agreement must set out what rights of access the broker andmanaging agent have to each other’s records.

Law and Jurisdiction

The law and jurisdiction applicable to the Terms of Business Agreement must bestated. When you are negotiating a Terms of Business Agreement, both parties willneed to consider the interests of their clients and principals.

The Lloyd’s Market Association and the London Market Brokers Committee haveagreed model Terms of Business Agreements which can be obtained from:

The Lloyd’s Market AssociationRoom 1085Lloyd’sOne Lime StreetLondon EC3M 7DQ

Telephone +44 (0)20 7327 3333Fax +44 (0)20 7327 4443Email [email protected]

Nevertheless, you may always negotiate a bespoke agreement with anymanaging agent.

Procedures to safeguard insurance moniesYou must demonstrate to us that you have the necessary procedures in place toprotect insurance monies in the event of insolvency.

In practice this means that you must demonstrate that you operate strictlysegregated client money accounts or have alternative equivalent arrangements inplace that we believe are prudent and appropriate:

• If you are a UK broker this means demonstrating to us that you meet theFSA’s client money rules (as set out in the FSA’s Handbook at CASS).

• If you are an intermediary in another member state of the EU, you willneed to show us that you meet the equivalent requirements set by yourhome state regulatory authority.

We may additionally request confirmation from the managing agent with whomyou have entered into a TOBA that it is satisfied with the client money arrangementsin place.


Professional Indemnity/Errors andOmissions InsuranceYou must demonstrate to us that you have taken out and will maintain professionalindemnity insurance which meets the following requirements.

Limit of Indemnity

The minimum limit of indemnity shall be the greater of £3,000,000 or 4 times theannual net retained brokerage as shown in the most recent audited financialstatements at the time of renewal of your policy.

If your annual net retained brokerage is less than £15,000,000, the minimum limit ofindemnity need be no more than £20,000,000.

If your annual net retained brokerage is greater than £15,000,000 the minimum limitof indemnity need be no more than £30,000,000.

Excess

The insurance excess in respect of each claim must not be more than:

• 25% of your net tangible assets for the last financial year, as shown in yourlasted audited accounts; or

• £2,500,000;

Whichever is less.

All the figures are stated in pounds sterling. Local currency equivalents will be usedbased upon the relevant exchange rate at the time of your application.

While the above requirements represent Lloyd’s minimum professional indemnityinsurance requirements, a managing agent may require higher levels of PI cover forprudential reasons before entering into a TOBA with your firm.

Prohibited associationsYou must also comply with section 10 of the Lloyd’s Act 1982 (the divestmentprovisions) which states:

“the Council of Lloyd’s shall not permit a person to act as a Lloyd’s brokerif that person is a managing agent or is associated with a managing agent.”

A summary of the relevant section of the Lloyd’s Act 1982 is set out at Appendix A.

If you have an association with a Lloyd’s managing agent, you must provide a letterfrom your external professional legal advisors to show that the association does notbreach the provisions of the Lloyd’s Act 1982.

Other considerationsAdmission to the Underwriting Room at Lloyd’s

Only people who hold a Lloyd’s pass can enter the Lloyd’s building and theUnderwriting Room. You should complete the relevant section of the applicationform with details of the individuals who will need passes. We reserve the right toreject a pass application for any individual and in such cases will explain to youthe reasons why.

The Lloyd’s pass is a photo identification containing the name of the person and thename of the employing firm. Therefore, the person the pass is for will need to cometo Lloyd’s for the pass to be issued. Only the person the pass has been issued tocan use it.


Our pass administration team will contact you following registration with details ofhow to arrange for passes. A small processing fee is charged for each pass issued.

Use of information submitted to Lloyd’s

When considering your application, we may disclose some or all of the informationprovided by you to:

Lloyd’s managing agents and underwriters

The Lloyd’s Market Association

Xchanging

The Financial Services Authority or other regulatory bodies

Financial analysts

We may also ask these parties for information to help us in reviewing yourapplication to become a registered Lloyd’s broker.

We will also make the information available if requested, to Lloyd’s managing agentsand underwriters so you do not have to provide the same or similar information toeach managing agent you may want to trade with. If you do not want us to pass onany of the information provided to us, clearly show this on the application form orsupporting documents, giving reasons. We will then consider your comments.

In accordance with Lloyd’s obligations under the Data Protection Act 1998, youshould note that personal data may be processed by Lloyd’s for the purposes of theadministration of insurance business, including but not limited to its regulatoryactivities. In the event that you are registered as a Lloyd’s broker, such processing byLloyd’s will include all information collated in respect of registration.

The processing of such data may also include using it as part of any review of yourfirm’s ongoing eligibility to be a registered Lloyd’s broker and the eligibility ofindividuals to be granted Lloyd’s passes.

Personal information relating to the directors, partners and/or shareholders of yourfirm may be transferred to individuals or organisations outside the EEA (for exampleto a Lloyd’s overseas office or foreign regulator). In which event, this data may not besubject to the same level of legal protection as in the United Kingdom. Details of theindividuals, organisations and countries in your case will be provided on request.

De-registrationA registered Lloyd’s broker established within the UK will be de-registered if itceases for any reason to be authorised by the FSA. Similarly, an overseas brokerwill be de-registered if it no longer complies with its local authorisation orregulatory requirements.

A registered Lloyd’s broker may also be de-registered if it ceases to comply with theconditions described in this guide, the provisions of the Lloyd’s IntermediariesByelaw, or if it has not transacted business in the Lloyd’s market within a reasonabletimeframe (e.g. 12 months).

If we intend to de-register a broker we will always seek, where possible, to explainwhy and give the broker an opportunity to make representations.

In the event of a broker being de-registered, the fee paid on registration and/or re-registration will not be refunded.


4 How Business is Processed at Lloyd’s

Lloyd’s is a marketplace made up of many separate syndicates writing differentclasses of business. For this reason, and because of the multiple number ofsyndicates participating on risks placed in the Market (also known as“subscription”), various functions have traditionally been performed centrally onbehalf of all Lloyd’s syndicates:

• processing premiums

• checking or producing policies (where required)

• agreeing and settling some claims

• providing data on behalf of the market for regulatory purposes

At present, these back office functions (also known as ‘bureau’ functions) areperformed on behalf of the London Market by Xchanging. Further details of the roleof Xchanging are set out at Appendix B.

Lloyd’s also operates a central settlement system between syndicates and brokerswhere a single daily movement of monies removes the need for many individualtransactions between parties for each premium or claim processed.

Overview of Business Processing at Lloyd’sPlacement of insurance risks

Placement of insurance risks currently requires you to have the ability to deal face-to-face with lead and following underwriters at Lloyd’s, although there are initiativesin place which are beginning to address the adoption of electronic placing to providea geographic location independent facility.

• The terms of the contract of insurance need to be set out in a contractcalled “the slip”, which should be prepared in line with market reform slipguidelines (see www.marketreform.co.uk for further details). You will needto prepare and present the slip to Lloyd’s underwriters in order to receivea quotation or firm order.

• It is the responsibility of Lloyd’s underwriters to ensure that the contractof insurance meets Lloyd’s contract quality checks, prior to entering intothe contract. In support of this, Lloyd’s has developed a Quality Assurancetool (QA Tool) for both open market and binding authority business(available at www.lloyds.com/omqatool and www.lloyds.com/baqatoolrespectively).

• The leader may carry out these checks or may choose to outsource thistask to a service provider (similarly, a follower may carry out these checksor may choose to rely on the leader).

• Lloyd’s also provides international trading advice to market participants on+44 (0)20 7327 6677 or via email address [email protected] and provides asearchable database of compliance information on www.lloyds.com knownas Project Crystal.

Contract documentation

A contractual document evidencing insurance cover must be provided to the clientwithin 30 days of inception (5 days for U.K. retail business, as defined by the FSA). Tomeet this requirement a managing agent may issue its own policy or one of thefollowing three options may be chosen:

1 The Market Reform slip – may be used as the sole contract document (to beclearly stated in the slip). In this case, you will need to send a copy of the completeslip to the client within 30 days of inception.


2 A Lloyd’s policy – may be produced (to be clearly stated in the slip). In this case,you will prepare the policy, which must meet Lloyd’s quality standards and be fullyconsistent with the contract details agreed on the MR slip.

If this option is chosen, you should send the policy to Xchanging, who will check it onbehalf of all the syndicates participating on the risk. Any resultant queries will bereferred back to you to correct before the policy is signed. Once checked, Xchangingwill sign and seal the policy and return it to you to send to the client within 30 daysof inception.

3 Certificates of insurance – are issued by a coverholder (operating under a bindingauthority contract) to the client within 30 days of inception.

At present, Xchanging do not check certificates issued under binding authoritycontracts, but do check all binding authority agreements against the bindingauthority quality assurance tool available on www.lloyds.com/baqatool.

In addition to the above contractual documents, you may choose to evidence coverto the client by means of a Broker Insurance Document (BID). It is important tounderstand, however, that a BID is provided by you as evidence of cover for theinsurance contract solely in your capacity as agent of the insured and it is not aninsurer approved document (this needs to be advised to your client).

Premium processing

Premium processing (also known as premium closing) is completed when youprovide appropriate documentation (i.e. London Premium Advice Note and MarketReform Slip – see Appendices B and C) to Xchanging either on paper or electronicallyusing the Insurers’ Market Repository. Xchanging will then verify the premium closingon behalf of participating Lloyd’s syndicates and pass an input file to centralsettlement:

• When you submit the risk to Xchanging for signing and accounting, it isyour responsibility to prepare and supply the breakdown of the grosspremium across all key factors that Lloyd’s underwriters require forregulatory and fiscal reporting (including risk coding and tax coding).

• Each premium payment is allocated a signing date and number which isunique to that transaction. This reference provides an audit trail since it isthe primary reference for the signing of future premiums and claimsattaching to that risk.

• Xchanging provides an internet based enquiry system (Account Enquiry),which provides the ability for underwriters and brokers to view alltransactions signed by Xchanging.

• Prior to using the Insurers’ Market Repository, you will need to sign up tothe repository rules (refer to www.marketreform.co.uk for further details).

Claims reporting

Claims reporting is managed electronically using the Insurers’ Market Repository (tohold claim files electronically), supported by transactions loaded on to CLASS@Lloyd’s(the Claims Loss Advice and Settlement System) which manages the routing ofclaims between agreement parties (see Appendix B):

• You will need to be able to interact with CLASS (either on-line or usingbespoke London EDI messages) and the Insurers’ Market Repository (eitheron-line or using ACORD messages) and be able to receive bespoke LondonEDI messages output from Xchanging (confirming claim signing numbersand dates).

• Prior to using CLASS and the Insurers’ Market Repository, you will need tosign up to the relevant CLASS and repository rules.


• Xchanging provides a central agreement function on behalf of thefollowing market, and is able to adjust the claim if required.

• Once all necessary agreements are achieved and captured on CLASS, if thetransaction is a payment request, the authorised transaction is allocated asigning number and date and is passed to central settlement.

• Nevertheless, in some circumstances, you will need to present claimson paper and there may also be occasions when face-to-face negotiationis required.

Central settlement

Central settlement is a function operated by Lloyd’s where all agreed premium andclaim settlement transactions on a given day are added together to create a singlecash movement between parties:

• Prior to using central settlement, you will need to agree to comply withthe relevant rules and requirements set out in Lloyd’s Central AccountingByelaw (you do this by signing the declaration statement contained in thebroker registration application form).

• Premium and claims related information is checked and processed byXchanging, and a signing date and number is allocated. This, in turn,creates an electronic advice for each syndicate and broker which willshow the syndicate’s reference and the broker’s unique number andpseudonym.

• This broker number and pseudonym is allocated to you by Xchanging aspart of the broker registration process.

• Your bank account details must be lodged with Xchanging for each of thecurrencies that you wish to use to settle premiums and claims. You mustprovide bank mandates in favour of Lloyd’s to handle these payments (tobe completed as part of your application).

• Each day a Central Accounting Advice is produced for each broker andsyndicate, which lists the business categories and processing dates towhich it relates, the balance of monies due or to be paid, and the date onwhich the settlement will take place. The balance shown will be the totalof all premiums less any claims for that settlement day and currency,which means that only one overall transaction is made. The net settlementamount and settlement date is also summarised in a separate daily highlevel Early Settlement Notification.

• The associated signing and settlement advices are electronic. You mustcomplete the “Bureau Signing Message”, “Electronic Settlement Advice”and “Early Settlement Notification” registration forms as part of theapplication process to receive these messages.

• If you intend to place Canadian, Italian or US Illinois business, then you willneed to be able to interact with a number of additional accounting andreporting systems, namely the Lineage, MOCHA or LIFT systemsrespectively. You should ask for further details of these systems, ifrelevant, from Lloyd’s Admissions.

Further information on current and future market reform initiatives which affectbusiness processing in the Lloyd’s market are set out at Appendix C.

Lloyd’s Claims Scheme

The Lloyd’s 2006 Claims Scheme sets out the subscription claims agreement processin the Lloyd’s market where contracts of insurance are underwritten by two or moreLloyd’s syndicates (unless each syndicate is managed by the same managing agent).It does not apply to certain classes of business.


Xchanging’s involvement in theregistration processIn order to become a registered Lloyd’s broker, you must demonstrate that you arecompetent to process business placed at Lloyd’s:

For this reason, we include Xchanging in the pre-application meeting. Thisallows you to ask them any questions which have not been answered bythis document and for Xchanging to assess your understanding of LondonMarket Processes.

If Xchanging does not think that you have a reasonable understanding ofLondon Market processing, any training needs can be identified andagreed at this stage (at your expense), before you make your application.

Following the pre-application meeting, Xchanging may arrange a furthermeeting with you to review important documents and to assist you intheir completion, to clarify Xchanging’s requirements and the tests to beconducted and to provide further documentation that may help you tounderstand the London Market processes.

Xchanging Application Information Pack

This information pack provides an explanation of London Market Processing,Xchanging’s involvement and its role within the Lloyd’s broker registration process.You will be required to have read and fully understood the information containedwithin this pack.

Xchanging Site Visit

You will be required to visit at least one of the Xchanging sites, in Chatham,Folkestone or London depending on the type of business proposed. This will provideyou with an overview of the activities carried out in the location and will highlightimportant processes and requirements.

Broker Procedure Document

You will be required to produce a concise technical procedure document todemonstrate your understanding of broker responsibilities in London Marketprocessing. The purpose of this document is to demonstrate how your procedureswill operate in practice. It must cover the following areas.

1 Your overall process flow and controls.

2 Your processes for dealing with processing queries raised by Xchanging.

3 Your process for creating MR slips and achieving contract certainty duringthe placing of the risk.

4 How you will pay premiums quickly and produce policies promptly forchecking by Xchanging (where required).

5 Details of your procedures for claims broking and electronic claimshandling.

6 Details of your claims diary system and knowledge of the applicableLloyd’s Claims Scheme.


Business Test Documents

You must provide with your application a full set of documents and electronicsubmissions (MR Slip, LPAN, ECF and LCCF or Treaty Statement) for each majortype and class of business that you intend to place at Lloyd’s (see Appendix B forfurther details).

You will be required to complete the full set of documents and electronicsubmissions for the example risks provided in the information pack. The documentsand electronic submissions you provide will be checked by XIS to ensure theycomply with MR slip requirements, are complete and suitable for processing.

Xchanging Critical Documents

Xchanging provide documents, including bank mandates and registration formswhich you must complete as part of your application. These forms are included in theXchanging information pack.

Once all of these areas have all been completed, Xchanging will confirm to uswhether or not you are able to process transactions successfully. Xchanging will givethis view within one week of receipt of your complete submission pack.

Xchanging will continue to support you after registration and you will be providedwith an Xchanging Customer Relationship Manager to assist you.


5 Considerations for Non-EU Brokers

If you are established outside of the EU you will need to show that you areregistered with or authorised by an appropriate regulatory organisation and thattheir requirements similar to those required in the EU. You will also be required todemonstrate that you are suitable to be a Lloyd’s broker in respect of thefollowing criteria:

1 whether you have appropriate knowledge and ability to conduct insurancebusiness in the London insurance market;

2 whether your firm and its directors, partners, employees and controllersare of good repute;

3 the adequacy of your capital and financial resources;

4 whether you comply with all laws, rules and fiscal requirements applicableto you as an insurance intermediary where your firm is established andwhere it conducts or will conduct business; and

5 your membership of any body, group or organisation the Franchise Boardconsiders to be necessary or desirable.

Registration of other group companies

Lloyd’s wishes to encourage overseas subsidiaries (defined below) of existing Lloyd’sbrokers who wish to access the market directly to apply to become registered Lloyd’sbrokers in their own right.

Any applicant that is a subsidiary, holding company or under commoncontrol with an existing registered Lloyd’s broker may, at Lloyd’sdiscretion, be subject to fewer suitability checks than would ordinarily beperformed for overseas brokers.

In such cases, each overseas company will be treated as a separate brokerand will still need to comply with our minimum criteria for brokerregistration (see Section 3 of this guide) in its own right.

Practical issues

Lloyd’s is developing practical business solutions for overseas brokers who wish toplace and process business at Lloyd’s, mainly through a series of electronic tradinginitiatives (see Appendix 3 for further details). Nevertheless, there are a number ofadditional considerations if you do not have an office in London or the ability totransact face to face:

How will you obtain quotes and place business with underwriters? Haveunderwriters indicated to you their willingness to trade by alternativemethods (e.g. fax, email or other electronic advice)?

How will you provide the information Xchanging need to pay premiums,issue policies and process claims?

How will you obtain agreement to urgent claims?

If you will use paper documents, how will you send them to London, orprocessing sites in other areas of the UK?

If you are established in, or have your main place of business in a country where wehave a General Representative, you may wish to contact the General Representativeto discuss your plans to apply and to make sure that you are aware of any conditionsappropriate to that country. A list of all Lloyd’s General Representatives can be foundat www.lloyds.com


6 Frequently Asked QuestionsQ Who regulates insurance at Lloyds?

A Lloyd’s is regulated by the FSA. The Society of Lloyd’s itself, the managing agents andmembers’ agents operating in the market are each separately authorised by the FSA.

From 14 January 2005 all insurance intermediaries established in the UK must beauthorised by the FSA. The Insurance Mediation Directive (‘IMD’) introduced in the EUmember states means that any insurance broker operating within the EU needs to beregistered with the competent authority where they are established or where theyhave their principal place of business (as provided by article 3(3) of IMD).

Q Why does Lloyd’s register brokers?

A It is a requirement under the Lloyd’s Act 1982 that brokers who deal with Lloyd’ssyndicates are “Lloyd’s brokers”. Our registration criteria are designed to ensure thatLloyd’s brokers are likely to bring business to Lloyd’s, that suitable protections are inplace to protect syndicates and policyholders, Lloyd’s brand and reputation and thatbrokers have the ability to process and transact business at Lloyd’s.

Q How can I find out about syndicates and their managing agents?

A A current listing of managing agents, the syndicates which they manage and contactdetails can be obtained from www.lloyds.com/Lloyds_Market/Directories

Q Where can I find out about Lloyd’s trading licences?

A Information regarding Lloyd’s ability to trade worldwide and the network of overseasgeneral representatives can be obtained from www.lloyds.com/Lloyds_Worldwide orthe Lloyd’s International Trading Advice helpline on +44 (0)20 7327 6677 or byemailing: [email protected]

Q Can a new start up apply for Lloyd’s broker registration?

A We normally require you to be able to demonstrate a trading history. In somecircumstances, we may consider applications from new start up organisations andthese will be assessed on a case by case basis. In any event, you will needappropriate regulatory approval before we will consider your application.

Q Must I have a TOBA with each Lloyd’s managing agent?

A You do not have to obtain a TOBA with every managing agent at Lloyd’s, but youmust enter into a TOBA with any managing agent you intend to trade with before theplacement of any business. Each managing agent will assess their decision to grant aTOBA based on their own commercial criteria, which may be more stringent thanthose required by Lloyd’s.

Q Must I have an office in London?

A You do not need to be based in or to have your principal place of business in the UK.We welcome applications for registration from overseas brokers. However, your abilityto trade effectively from overseas depends on a number of factors including methodsof placement, ability to process electronically and dealing with different time zones.Some further considerations for overseas brokers are set out in section 5 of this guide.

Q Is there any ongoing transaction cost for brokers?

A There is no ongoing Lloyd’s charge to brokers for placing and processing business atLloyd’s. Xchanging, who process premiums, policies and claims on behalf of themarket, recover their costs by charging managing agents and syndicates, based uponthe number of transactions they handled for them.


Appendix A Lloyd’s Legal Framework

Two documents set out the legal framework for Lloyd’s broker registration. These aresummarised below with a web link to the relevant documents.

Lloyd’s Intermediaries Byelaw

The decision whether or not to accept you as a Lloyd’s broker is made by theFranchise Board under Section 2 of the Intermediaries Byelaw. This section of thebyelaw sets out the standards expected of all registered Lloyd’s brokers and providesdetails of:

• Registration and the criteria for registration.

• Requirements for Lloyd’s brokers in respect of Terms of Businessagreements and Notification to Lloyd’s.

• Review of registration and Lloyd’s power to conduct reviews.

• Removal from the register and postponed removal.

• Miscellaneous and transitional arrangements:

� Fees;

� Divestment;

� Prohibition on unregistered persons broking insurance business at Lloyd’s.

Requirements made under the Intermediaries Byelaw set out the detailed eligibilitycriteria for registration as a Lloyd’s broker.

The Lloyd’s Act 1982

The Lloyd’s Act 1982 prohibits any registered Lloyd’s broker from being a Lloyd’smanaging agent (as defined in section 12(1)(a) of the Lloyd’s Act 1982) or beingassociated with a managing agent (as defined in section 10(2) of the Lloyd’s Act 1982)unless the Council otherwise gives its permission in accordance with section 10(4) ofLloyd’s Act 1982.

How can I get a copy of these documents?

Each of the above documents is available from our website in the Lloyd’s Acts andByelaws section.

http://www.lloyds.com/Lloyds_Market/Tools_and_reference/Lloyds_Acts_and_Byelaws/


Appendix B The Role of Xchanging What is the role of Xchanging?Xchanging provides a number of centralised back office services offering supportin the areas of policy production, premium and claims handling, and centralaccounting between syndicates and Lloyd’s brokers. An overview of these servicesis provided below.

Xchanging Ins-sure Services (XIS)

XIS specialises in operating a comprehensive range of outsourced back-office functionsfor the London insurance market. It was formed in May 2001 as an enterprisepartnership between Lloyd’s, the International Underwriting Association (IUA) andXchanging, and includes in its portfolio of operations the processing centres previouslyowned by Lloyd’s Policy & Signing Office and the London Processing Centre.

The principal functions of XIS are:

• Insurance policy checking and production (where requested)

• Management of the Model Wordings Library

• Premium and claims processing and the creation of an electronic adviceto feed Lloyd’s settlement of monies between syndicates and brokersand others

• Providing syndicate and market-level information

Xchanging Claims Services (XCS)

XCS offers a range of comprehensive claims management services, including allmarine, non-marine and aviation claims. Its role and responsibilities are defined inLloyd’s Claims Scheme, which applies to all business with certain exceptions, such asdirect UK motor. Also, risks underwritten 100% by one syndicate or under aconsortium arrangement or administered through service companies may beexempted from the scheme.

XCS provides a full range of claims management and support services, including:

• Integrated end-to-end claims management

• Class-specific lead adjusting

• Recoveries and subrogation management

• Coverholder/binding authority management and audit

Xchanging specific documentsYou should also be aware of the following Xchanging specific documents.

London Premium Advice Note (LPAN)

This document includes all details relating to a premium transaction in respect of acontract of insurance.

London Claim Collection Form (LCCF)

This document is similar to an LPAN but is used for advising claims collection whererequired in a paper based format.

Treaty Statement

A treaty statement will be completed for any Proportional Treaty transaction. Thisshows the details of all relevant premium and claims and should be submitted toXchanging with the MR slip for checking and processing.


Appendix C Market Reform Initiatives

A variety of market reform initiatives are currently underway in support of a clearvision for the future, to make the London Market “the market of choice”. An overviewof the vision and current initiatives is set out below.

London Market Reform VisionThe London Market Reform vision is “To be the market of choice”. Thismeans maximising electronic processing across the market:

All risk submissions sent electronically; wholly electronic trading for somesimple risks with no manual intervention; face-to-face when required forlarge and complex risks.

All claims processed and agreed electronically; face-to-face negotiationonly when required for complex claims.

All accounting and settlement of risks performed electronically.

Using:

ACORD international standards for data messages and documents.

Common processes and agreed service levels.

For more details on London Market Reform, please see the Market Reform website atwww.marketreform.co.uk

Current Market Reform InitiativesContract Certainty (CC)

Contract Certainty is a FSA led initiative, in which it set the general insurance industrya challenge to make contracts of insurance clearer, leading to certainty of coverageso that there are fewer disputes and that processing after placement is improved.

The intention of this initiative, applied to Lloyd’s, is that all contracts of insuranceplaced at Lloyd’s are contract certain at inception. Further information on thisinitiative is available at http://www.marketreform.co.uk/contractcertainty_home.htm

Market Reform Slip (MR Slip)

The terms of the contract of insurance agreed with Lloyd’s syndicates are set out in acontract called “the slip”:

Lloyd’s business must be placed on a Market Reform Slip (MR slip), for whichthere are three different templates (to match the underlying business) inrespect of open market, binding authority and lineslip placements.

The slip is the necessary contract which permits the processing of apremium or claim. It is also a key document for policy checking andsigning (where required).

Further information on these slip templates (as updated from time to time) may beobtained from the Market Reform web site at www.marketreform.co.uk and from theXchanging information pack which accompanies this guide.


Pre-Bind Contract Checking (Pre-Bind)

Lloyd’s is implementing a new approach to checking and evidencing cover across theLloyd’s market (as set out in Section 4 of this guide) in order to provide improvedservice levels for clients through more efficient and consistent document productionprocedures. In summary:

All underwriting checks including Lloyd’s contract checks are to beperformed by underwriters prior to entering into the contract (also knownas “pre-bind” contract checking).

A complete copy of the slip will act as the underwriters’ contractualdocument, with an option to produce a Lloyd’s policy signed by XIS only ifspecifically requested.

XIS are supplying a new policy checking/production service, and queryhandling process on those contracts requiring a Lloyd’s policy.

Two Quality Assurance (QA) tools are available from Lloyd’s(www.lloyds.com/omqatool and www.lloyds.com/baqatool) to supportcontract checking on open market and binding authority contractsrespectively.

While the QA Tool is primarily offered as guidance to underwriters, it is inthe interests of brokers to familiarise themselves with Lloyd’s contractchecks to ensure that their presentations to underwriters are compliantand avoid any unnecessary re-working of documentation (whether it is theslip or a full policy document that is to be produced as evidence of coverto the client).

Insurers’ Market Repository

The Insurers’ Market Repository (IMR) allows premium documentation to be deliveredelectronically to Xchanging for premium processing.

Delivering premium documentation in this way reduces the turnaround time forpremium processing by over two days compared to paper based processing andensures that the documentation is available for re-use and future review by brokersand underwriters alike.

Electronic Claims Files (ECF)

An Electronic Claims File is the combination of the Insurers’ Market Repository (IMR)and the Claims Loss Advice and Settlement System (CLASS). Xchanging providesthese systems to Brokers: –

IMR enables claim file documents to be submitted electronically andshared by subscribing underwriters.

CLASS provides users with access to financial data and claims processingfunctionality. Brokers are required to lodge all claims electronically usingthe CLASS system.

Prior to using ECF, you will need to sign up to the relevant ECF rules.

ECF allows brokers to supply an entire claims file to all insurers “on risk”,electronically, at the same time. All insurers will therefore have concurrent access tothe claims file, which reduces the length of the overall claims lifecycle and providesassureds with an improved service.


Accounting & Settlement (A&S)

The Accounting & Settlement (A&S) project was initiated to drive the developmentand implementation of electronic messaging for accounting and settlementtransactions in the London Market. The standards vehicle chosen by the market toachieve this is ACORD. The relevant ACORD standards are: ACORD Messaging Service(AMS) standards (for communications of messages), ACORD Document RepositoryInterface (DRI) standards (for communication of documents) and Reinsurance andLarge Commercial (RLC) XML standards (the standard for the message data). Theobjectives of the project are to:

• Rationalise and streamline business processes.

• Speed up premium and claims payment (remove blockers from the currentprocesses), providing faster and more accurate data.

• Remove reliance on paper.

• Reduce errors and reconciliation by capturing richer data once and by pre-validating data.

• Enable back office rationalisation by providing a common approach toprocessing.

Lloyd’s One Lime Street London EC3M 7HA Telephone +44 (0)20 7327 1000 Fax +44 (0)20 7626 2389 www.lloyds.com