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Minimum Standards

The Minimum Standards are statements of business conduct which managing agents are expected to comply with to operate at Lloyd’s.

The Minimum Standards contain Requirements which represent the minimum level of performance required of any organisation within the Lloyd’s market to meet the Minimum Standards.

Within these documents the standards and supporting requirements are set out in the blue box at the beginning of each section. The remainder of each section consists of guidance which explains the standards and requirements in more detail and gives examples of approaches that managing agents may adopt to meet them.

The guidance is intended to provide reassurance to managing agents as to approaches which would certainly meet the Minimum Standards and comply with the requirements. However, it is appreciated that there are other options which could deliver performance at or above the minimum level and it is acceptable for managing agents to adopt alternative procedures provided they can demonstrate the requirements to meet the Minimum Standards.

Minimum Standards and supporting information

  • Annual Syndicate Business Plans which form part of syndicate long term strategy
  • Effective process for developing, challenging and approving the annual Syndicate Business Plan
  • Business Plan Implementation and Monitoring

Download MS1: Business Planning and Portfolio Management

  • Effective underwriting systems and controls framework in place
  • Nominated director responsible, appropriate written Underwriting Policy and Procedures, underwriters' terms of reference / authorities, Pre-Bind Quality Assurance and Contract Certainty
  • Processes to audit and review: Exception reporting, Independent Review, Peer Review and Internal Audit

Download MS2: Underwriting and Controls

  • Appropriate pricing methodologies and effective rate monitoring processes
  • Nominated director responsible for pricing and rate monitoring procedures
  • Direct link between the written Risk Appetite at portfolio and class level and pricing parameters
  • Demonstrable and transparent written Pricing Policy
  • Appropriate pricing procedures and methodologies which are transparent and consistent for each class of business

Download MS3: Price and Rate Monitoring

  • Effective system of governance and organisational structure providing sound and prudent management of the business
  • Board effectiveness and suitability, including Non-Executive Directors
  • Internal Control system with suitable administrative processes ensuring compliance with applicable laws and regulations
  • Responsibility for outsourced functions and activities
  • Required functions include effective risk management, compliance, internal audit and actuarial
  • Effective systems in place to identify, prevent and address conflicts of interest
  • Oversight of Expenditure
  • Impact of business on wider society and arrangements to protect own and Lloyd’s brand and reputation

Download MS4: Governance

Notify Lloyd's of changes to senior appointments

Notify Lloyd's of changes of control of underwriting agents

  • Effective risk management system in place
  • Clearly defined risk management strategy
  • Decision-making process within the risk management framework
  • Written risk management policies
  • Risk Identification and Assessment
  • Risk Monitoring and Reporting
  • Own Risk and Solvency Assessment (ORSA)

Download MS5: Risk Management

  • Effective systems and processes to record, monitor and assess underwriting exposures
  • Clear processes for recording and considering all material accumulations of exposures and loss potential, appropriately represented within the internal model
  • Appropriate loss estimation techniques
  • Internal and external review and reporting of exposure management

Download MS6: Exposure Management

  • Clear and comprehensive reinsurance strategy and purchasing plan   
  • Associated implementation and monitoring
  • Effective systems and controls framework to support the management of all aspects of outwards reinsurance

Download MS7: Reinsurance Management and Control

  • Board responsibility for setting reserves
  • Statement of Actuarial Opinion
  • Actuarial Function is in place
  • Sufficient information supplied to the Board on reserves
  • Robust reserving procedure
  • Appropriately documented reserving process

Download MS8: Reserving

  • Culture, strategy and the fair treatment of customers
  • Setting standards and managing performance
  • Claims case reserving
  • Product assessment and review
  • Customer experience – sales, claims and complaints management
  • Outsourcing – managing third parties with delegated authority

Download MS9: Customer

  • Relationship with regulators in an open and transparent manner
  • Conduct business in accordance with Lloyd’s UK and international licensing permissions and with due regard to applicable laws and regulations
  • Compliance with all applicable financial crime legislation, including that related to anti-money laundering, anti-bribery and corruption, and international sanctions

Download MS10: Regulatory

  • IT Security, infrastructure and operational processes
  • Completion of all returns required to Lloyd's and the PRA
  • Effective systems and controls for managing, recording and reporting data to management and to Lloyd's

Download MS11: Cyber Resilience and Data Management

  • Model Scope
  • External models and data
  • Use and understanding of the internal model
  • P&L Attribution
  • Expert Judgement
  • Model Change
  • Internal model documentation

Download MS12: Scope, Change and Use

Model Change reporting requirements are detailed in the guidance here. Templates are also provided for reporting to Lloyd's.

  • Calibration
  • SCR Calculation
  • Adjustments to model output
  • Statistical Quality Methodology
  • Statistical Quality Assumptions
  • Statistical Quality Consistency
  • Internal Model Data

Download MS13: Modelling, Design and Implementation

  • Validation Policy
  • Validation governance -  independence and objective challenge
  • Validation tools
  • Validation Report
  • Risk Indicators

Download MS14: Validation

  • Investment strategy consistent with the investment risk policy
  • Maintain comprehensive investment risk documentation
  • Effective governance and control framework for the management of syndicate investment assets
  • Appropriate oversight and control and outsourcing

Download MS15: Investment Management

Self-assessment templates are provided to assist managing agents with their internal processes to comply with Minimum Standards. There is no current requirement to submit self-assessment templates to Lloyd's unless requested.

Download Self Assessment Template 2021 - Collated ALL

Download Self Assessment Template 2021 - Separate TABS

Mapping documents are provided to enable a comparison of Solvency II IMAP requirements to Lloyd's Minimum Standards and understand the updates for 2019 including a separate document for MS9 Customer which consolidates the previous Minimum Standards for Claims, Conduct and Delegated Authority.

Download Mapping Minimum Standards 1,2,3,and 9 Update 2020-21

Download Mapping Minimum Standards excl 1,2,3 and 9 Update 2020-21

Each managing agent must have a Senior Nominated Person (SNP) who is a Board member, or a member of the Senior Management Team (SMT) who regularly reports to the Board on compliance with Lloyd’s Minimum Standards. The SNP is the key liaison point at the managing agent, for Lloyd’s, on matters relating to Lloyd’s Minimum Standards including reporting and communications.

The primary responsibilities of the SNP are as follows:

  • To ensure appropriate robust processes exist in relation to the adherence to Lloyd’s Minimum Standards
  • Issues raised by the Lloyd’s Oversight Manager or Lloyd’s oversight teams are addressed in a timely manner
  • Issues raised by Lloyd’s are appropriately escalated to the CEO and/or Non-Executive Directors as required
  • Relevant documentation is submitted and approved as required.

The following are not expectations of the SNP:

  • To be an expert on the Lloyd’s Minimum Standards Requirements
  • To solely undertake and complete all Lloyd’s Minimum Standards review activity
  • To be solely responsible for the adherence to Lloyd’s Minimum Standards.

Managing agents should submit this form to and discuss with their Oversight Manager if the SNP is proposed to change.

Download Change of Senior Nominated Person SNP Template

All managing agents are required to submit a formal Board attestation for each syndicate managed by close of business on 31 March 2021, confirming their current position against the requirements of all Lloyd’s Minimum Standards.

Download 2021 Minimum Standards Board Attestation Guidance