What is the Control Framework?
The Control Framework is a structured, documented process for the application and testing of the controls in place to verify and evidence that Tax and Regulatory reporting information is of good quality, accurate and complete. For up-to-date information requirements, please refer to the Coverholder Reporting Standards for binding authority business, and Lloyd's Direct Reporting requirements for service company business. Board sign-off is required from each managing agent within the Lloyd’s market.
The initiative, mandated by Lloyd’s, encourages continuous improvement in this area and is Lloyd’s response to ensuring it can satisfy increasing requests for more granular tax and regulatory evidence from the Supervisory Authorities into the future. The Programme is being rolled out in three phases:
|Phase||Distribution channel||Sign-off deadline|
|1||Service Companies||30 June 2013|
|2||Coverholders||31 December 2015|
|3||Open Market||Not applicable - see Phase 3 section below|
Managing agents will benefit as Lloyd’s will continue to act as the primary respondent to regulatory and tax reporting queries for Lloyd’s business.
Fundamentally, the objectives are to:
- “Raise the bar” on quality across our market
- Protect managing agents from direct regulatory investigations and penalties for non-compliance
- Maintain and enhance the Lloyd’s brand and reputation
- Minimise the risk to the overall Lloyd’s licences
- Protect and potentially improve the competitive position of the platform.
Instead of being treated as a separate project requiring managing agent board sign-off, Control Framework requirements for Open Market will be absorbed into the work of the Central Services Refresh Programme, as part of the requirements for post-bind submission.
This decision was based on an extensive period of market consultation, assessment of the tax and regulatory risk associated with the Open Market, and analysis of the many existing controls around Open Market processes. Taking a pragmatic view, it made little sense to burden our managing agents with another change project, particularly when Open Market processes will be undergoing significant changes over the next few years.