Advance consents reduce the administrative burden on managing agents. Instead of managing agents having to apply to Lloyd’s for certain permissions, Lloyd’s gives “advance consent” provided the managing agent meets specific conditions.
The current advance consent regime was implemented on 14 August 2003 and replaces the previously available advance consents.
Where Lloyd’s advance consent has been given, provided certain criteria are met, there is no longer a need for managing agents to make a detailed application to Lloyd’s for permission to act. In certain cases, all that is required is for the managing agent to notify Lloyd’s it has taken the action. In the case of aligned syndicates, it is now not even required for notification to be given to Lloyd’s in certain cases.
For aligned syndicates the advance consent regime will significantly ease the administrative burden. For unaligned syndicates, the advance consent regime still requires that managing agents provide members with sufficient information to enable members to consider the implications of the action being proposed. However, if no objection is received within the required timescales then notification to Lloyd's is sufficient and no application is required.
At present there are advance consents in relation to the following:
- Increase in agency fees or profit commission
- Conditional consent for agency agreement terminations
- Appointment of recognised accountants as auditors for a syndicate and its managing agent or any related parties
- Multiple syndicates consent for underwriters where the syndicates have the same managing agent and the additional syndicate is allocated on a split stamp basis, is a mirror syndicate or in run-off
- Appointment and retirement of premium trust fund trustees that are directors of the managing agency
- Exemption from requirement for syndicates to hold a syndicate annual general meeting
- Reinsurance to close being treated as a transfer of assets following the merger of syndicates
- Appointment of a director to the board of a corporate member.
For a full description of the Advanced Consent Regime and for the conditions that apply please refer to the August 2003 bulletin, advance consent regime, Y3116 (332KB, pdf).
In order to ease further the burden on managing agents of syndicates with fully-aligned capital, Market Bulletin Y4126 (60KB, pdf) was issued on 22 February 2008 and in certain cases there is now no longer a requirement to inform Lloyd’s about the steps to be taken.
All other requirements of the Advance Consent Regime continue to apply to aligned syndicates. In the case of syndicates which are not fully aligned, the Advance Consent Regime is unchanged by Market Bulletin Y4126 and it will continue to remain in force as set out in Market Bulletin Y3116.