Key regulatory changes
Fri 04 Mar 2011
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Regulatory change is one of the key issues referred to in Lloyd’s strategy document and the beginning of 2011 continues to be extremely challenging. The following are key projects where we expect engagement with the market over the forthcoming period.
US Dodd-Frank Act
The Act has potential implications for both Lloyd’s surplus lines and for reinsurance business. It enables changes to surplus lines eligibility, filings and to the methodologies for allocating and reporting surplus lines risks - although how these changes will be implemented is uncertain.
Secondly, the Act, subject to action by individual states will enable reform of US Credit for reinsurance regulation. This currently requires unauthorised reinsurers to post collateral or security in order for cedents to be able to take credit for reinsurance.
Lloyd’s will be monitoring these issues and is engaged in discussions with relevant parties in the US. We will be keeping the market up to date on our progress via our Regulatory Communications pages and other communications to relevant stakeholders.
Canada
Changes to the federal regulatory approach came into force on 1 January 2010 changing the definition of risk from one of ‘location of risk’ to one of ‘location of underwriting’. Having Lloyd’s business considered to be “insure in Canada a risk” is important from both commercial and regulatory perspectives, and a Market Bulletin (Y4456) was issued in December advising of the introduction of an Attorney in Fact signing process. Further details will shortly be made available on what the process will need to achieve and the development and implementation timetable.
Medicare
We engaged extensively with the market in 2010 and the project has now moved into the implementation phase. Critical to its success in the early part of 2011 is that managing agents ensure all their priority Third Party Administrators (TPAs) and coverholders have responded to the Lloyd’s vendor and addressed their data submission requirements. This also applies to managing agents intending to submit data directly to the Lloyd’s vendor. Managing agents who are uncertain of their status or that of their prioritised TPAs and coverholders should contact the Lloyd’s vendor immediately at lloyds-mir@gouldandlamb.com.
Bribery & corruption
Lloyd's is currently working with managing agents to survey and assess progress on the development of the anti-bribery controls, so we can issue best-practice advice for managing agents. The survey will also include a review of the compliance with the UK's Export Control Order regulations, which impacts a limited number of managing agents.
For information on other regulatory initiatives or if you are looking for advice in specific territories, contact LITA@lloyds.com or visit www.lloyds.com/crystal
