Lloyd’s requires that all senior appointments are notified. Notifications should be made via lloyds.com using the forms on the next pages. Notification should be made prior to any Senior Management Function (SMF) application to the PRA or FCA.
What is the process?
When making a senior appointment, underwriting agents / approved run-off companies should comply with the following process:
- Firm speaks to their allocated Governance & SII Manager at Lloyd's to discuss a proposed senior appointment
- Prior to the appointment, firm completes the relevant notification form via Lloyds.com: If the appointment is for a director, active underwriter, run-off manager or any other PRA or FCA function.
- Firms notifying the appointment of a director, active underwriter, run-off manager or any PRA or FCA function will be asked to confirm agreement to the Surplus Lines Declaration, as required by the NAIC for US business
- Unless Lloyd’s indicates within 5 business days that further information is required, the firm may submit any SMF application to the PRA/FCA
- Firm receives notification of approval from PRA/FCA
- Firm completes the confirmation of new senior appointment or amendment form
Which senior appointments require notification?
The above process applies to all underwriting agents and approved run-off companies in respect of the following appointments:
- Director of a managing agent or member’s agent
- Director or partner of an approved run-off company
- Active underwriter
- Run-off manager
- Any PRA SMF application whether or not covered by the above appointments, e.g. Head of Internal Audit
- Any FCA SMF application whether or not covered by the above appointments
- Compliance Officer
What about changes to individuals in senior positions?
A separate notification will be required for termination of appointments. Any amendments will be completed in the appointment/amendment form for all positions.
If the role requires approval from the PRA/FCA, the confirmation of new senior appointment or amendment form must be completed once approval is received.
How does the process deal with US Surplus Lines business?
With regard to surplus lines business transacted in the USA, Lloyd’s reports to the NAIC on behalf of the Market in respect of all persons appointed to the position of director, active underwriter, run-off manager or any other PRA or FCA Senior Management Function. To facilitate this, individuals to be appointed to one of these senior positions are required to make a declaration (surplus lines business) in a form prescribed by the NAIC.
The declaration can be made by the person being appointed to the senior position as part of the electronic notification process. The declaration may also be confirmed on behalf of the person being appointed, provided that the person completing the electronic notification process has the authority of the individual in question to confirm the declaration. In all cases, it is recommended that a record is kept evidencing that the individual making the declaration has read it and, where appropriate, has agreed to it being made on his or her behalf.
Does Lloyd’s approve senior appointments?
While Lloyd's requires that all new senior appointments are notified as well as any changes to such appointments, Lloyd's does not formally approve senior appointments and the old Individual Registration process has been revoked. Pursuant to paragraph 42A of the Underwriting Byelaw, however, Lloyd's retains the power to require the removal of anyone appointed to the position of director, active underwriter, run-off manager or any PRA or FCA (SMF). Lloyd's may do this if it decides that a person is not fit and proper or otherwise suitable. The criteria that Lloyd's applies in making this decision are set out at paragraph 10A of the Underwriting Requirements (Chapter 1).
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