In very broad terms, the overriding principle is that where a company or individual acquires 10% or more of the shares and/or voting interests in an underwriting agent or approved run-off company or its parent company, the firm needs prior approval from the PRA, FCA and Lloyd’s.
What is the new process?
Where there is a proposed change of control in respect of an underwriting agent or approved run-off company, the following procedure should be adopted:
- Informal notification to the Governance and Solvency II Manager or Oversight Manager;
- Electronic notification to Lloyd’s of the intention to change a controller and confirmation that any tax implications have been explored with Lloyd’s Tax Department;
- Lloyd’s has 3 working days to respond to the initial notification and raise any immediate issues or to exercise its right to challenge;
- Detailed due diligence is then undertaken by Lloyd’s (further information on potential areas for consideration are detailed below);
- The firm subsequently submits the application to the PRA and FCA;
- The firm notifies Lloyd’s when PRA and FCA approval is granted; and
- Lloyd’s gives written approval once satisfied with all aspects of the transaction (including financing, Group and investors);
- Lloyd’s reserves the right to reject an application or perform additional due diligence as material information is presented.
Change of Control forms
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