Lloyd’s capacity auctions

Auction newsletter No 8

Transactions permitted in the fourth auction under Auction Rule 4

Transactions generally permitted

Following the approval by Lloyd’s during October 2014 of the relevant unaligned syndicate business plans for 2015, it has been determined that transactions will be permitted in the fourth auction to be held on 11 and 12 November 2014 in capacity on the following syndicates

Managing agent/syndicate

Hiscox Syndicates Limited – 33

ERS Syndicate Management Limited – 218

Beazley Furlonge Limited – 623

Canopius Managing Agents Limited – 958

R&Q Managing Agency Limited - 1991

Asta Managing Agency Ltd. – 2526

ANV Syndicates Limited – 5820

 

In the case of syndicate 623 the capacity of the syndicate for the 2015 year of account, as shown in the syndicate’s approved business plan, exceeds the amount indicated in the syndicate’s business forecast pursuant to paragraph 4(3)(a) of the Auction Rules 2014.

In the case of syndicates 33, 958, 1991 and 5820 there has been a material change, as defined in paragraph 4(3)(c)(i) of the Auction Rules 2014, in their capital assessments.

In the case of syndicate 5820 the syndicate business plan approved by Lloyd’s contained material changes, as defined in paragraph 4(4)(b)(v) of the Auction Rules 2014, from the equivalent information communicated to members’ agents and direct corporate members on or before 16 September 2014.

It has been agreed by the Auction Official that transactions will be permitted in the fourth auction in capacity on syndicates 218 and 2526.

Tender and Subscription Orders

Members and prospective members of the above syndicates are permitted to tender any or all of their capacity on those syndicates in the fourth auction except for syndicate 623 which is solely in the fourth auction because the syndicate has met the criteria set out in paragraph 4(3)(a) of the Auction Rules 2014, where only the capacity that represents the difference between the amount shown in the syndicate’s business forecast and the syndicate’s approved business plan (referred to as “excess entitlement”) will be eligible to be bought and sold in the fourth auction.  Disposals of such capacity by a syndicate member are limited to the member’s share of that excess entitlement.

Auction Rules 7(4)(b) and (c) generally prohibit members from tendering and subscribing for capacity on the same syndicate in the same year.  In the context of any proposed transaction for permitted syndicates in the fourth auction, members, their advisers and issuers are reminded that such prohibition will not apply.

Disclosures

The deadline for disclosures for the fourth auction is midday on Friday 7 November.  The managing agent of each syndicate included in the above list is expected to give very careful consideration as to whether it is appropriate to issue a disclosure to set out the reasons for their participation in the fourth auction.

Peter Spires
Head of Legal & Compliance and Auction Official

06 November 2014

Contact Information:
Telephone: +44 (0)20 7327 6170
Email: peter.spires@lloyds.com