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Principle 8: Investment

Managing agents should ensure syndicate investment risk is effectively controlled, informed by wider business strategy and adheres to the Prudent Person Principle (PPP) requirements.

To support this, managing agents should ensure their syndicates:

Have a clear articulation of investment objectives and risk appetites, with rationale having regard to high level business or solvency strategy ​​

Have clear investment parameters and guidelines with robust processes to monitor and report positioning against limits  ​

Integrate investment stress testing into investment management

Ensure investment performance and risk, including that of outsourced arrangements, are effectively overseen through monitoring and reporting ​​

Develop and embed a Responsible Investment Policy

Have Asset-Liability Modelling (ALM) capabilities consistent with Use Test Principles

Have robust investment governance

Below are some of the frequently asked questions about this Principle, including the questions that were asked in the Technical Briefing session(s).

If you have any further questions, please reach out to Oversight.Framework@lloyds.com

Not at this stage as we expect Syndicates to have the same processes in place although we expect the management of investment risk to be more sophisticated dependant on the portfolio mix and the guidance allows for this proportionality.

You can be assessed as meeting the maturity level above, however, your rating will remain “meets expectations”. Syndicates should be considering whether changes to their investment strategy would impact their materiality to ensure they are meeting the principles at the appropriate expectation.

This is a holistic approach where we combine qualitative and quantitative aspects, if we had any questions following review of your documentation, we would discuss certain elements of the portfolio with you and the managed exposure would be considered.

No, not at this stage. If a minimum will be implemented, we will inform the market.