Special Purpose Arrangement

The SPA is a flexible model that can be used by existing market players or new entrants to the market.

SPA’s have been established for a variety of reasons, including:

• Capital management: a means of introducing third party capital support to the host syndicate Business Plan, reinsuring the whole account or selected classes of business. This model allows the SPA capital providers to participate in the host syndicate’s business without requiring the infrastructure associated with a full syndicate.
• Capacity management: a means for the host syndicate to secure third party capital support and thus manage exposures within it’s risk appetite.
• Partnership: a third party introduces business to the host syndicate, which is then reinsured to the SPA. The SPA may be capitalised by a third party. Such an arrangement may be a first step towards developing a standalone syndicate. Lloyd’s agreement to this model does not necessarily mean Lloyd’s will accept a standalone syndicate application in the future.

Lloyd’s has established overarching criteria for the assessment of all new entrants; these criteria are provided for by the Underwriting Byelaw and are set out in full in the requirements made pursuant to the Underwriting Byelaw.

More broadly, Lloyd’s will also consider the extent to which the applicant’s proposed business adds value to the Lloyd’s market, having regard to criteria including:

• the nature of the applicant’s business;
• the fitness and propriety of the applicant’s directors, officers and key personnel;
• the collective suitability of the applicant’s board of directors and of each of its committees;
• the ability of the applicant to comply with Lloyd’s cultural requirements and targets including those relating to diversity
• the ability of the applicant to comply with Lloyd’s requirements for sustainability;
• the applicant’s capability and readiness to engage in and make changes required by Lloyd’s market transformation initiatives.

• Application fee is £75,000 (VAT is not applicable)
• The application fee invoice will be issued once the application has been recommended to the Council by the Business Opportunities Committee.
• Please note the application fee is non-refundable.
• Further information on charges payable by members to operate in the Lloyd’s market can be found in the Triage Quantitative submission.
• We review our charges annually and every September we release a Market Bulletin confirming the charges for the following year