Application to Lloyd's
Solvency II application to Lloyd's
Directive Article 17(1) says that:
“The home Member State shall require every undertaking for which authorisation is sought under Article 14 to adopt one of the forms set out in Annex III.”
Annex III lists the legal forms of undertakings by EU member state. For the UK, this list includes “the association of underwriters known as Lloyd’s”.
This means that “the association of underwriters known as Lloyd’s” (the association) can be an authorised EU insurer. The concept of the association appears in existing EU insurance directives and means that a single authorisation may be granted that covers all Lloyd’s members. The association is not the same as the Society of Lloyd’s, although its members are identical.
The association is therefore already authorised to carry on insurance business in the EU. A single collective authorisation is granted and applies to all Lloyd’s members. The collective authorisation is managed by the Society of Lloyd’s. Solvency II’s provisions therefore apply to the association as a collective entity, although the PRA decides precisely how it wishes to apply particular regulatory provisions to Lloyd’s and its members.
Solvency II does not make provision for the authorisation as insurers of Lloyd’s members or syndicates on their own behalf.