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Principle 11: Regulatory and Financial Crime

Managing agents should have robust frameworks in place to assess and address regulatory and financial crime risks arising from their UK and international businesses. Frameworks should support compliance with law, regulation and guidance, and allow for well informed, transparent relationships with Lloyd’s and applicable regulators.

To support this, managing agents should:

Embed a culture of transparency, regulatory and financial crime compliance, and an understanding of the benefits of this across their managed businesses

Have a robust understanding of their regulatory and financial crime risk exposure and appetite, which is subject to appropriate challenge

Have appropriate systems and controls, including training, in place to manage regulatory responsibilities and financial crime risk

Useful information

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.

The high-risk jurisdictions for financial crime purposes and sanctioned territories and sanctioned entities are fairly transparent, and there shouldn’t be any difference between how Lloyd’s perceives them compared to how the market does.

The sources we’ve used are: FATAF, CPI, Basel AML Index, EU Non-Cooperative Tax Jurisdictions.

Managing agents are not subject to Anti-Money Laundering regulations.

High risk classes of business are ones that are assessed higher financial crime risks. As an example, Kidnap and Ransom would be more of a concern from an anti-money laundering, or counter terrorism perspective.

The way we would look at it is, given the materiality of financial crime for your business, we would want to know are you comfortable that you have the right level of oversight of your financial crime exposures. That might mean having a standalone financial crime committee, or it might mean something else.