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Lloyd's completes the Sanctions Market Review project

Lloyd’s International Regulatory Affairs team has now completed the fieldwork as part of its 18 month-long review of the market’s sanctions and financial crime systems and controls (‘the review’).

Mon 18 Aug 2014

The project process

The internal audit function of each managing agent completed the review using a work plan and scope set by Lloyd’s, covering key areas of sanctions and financial crime risk. Lloyd’s attended key interviews (covering compliance, delegated underwriting, claims and underwriting) and provided feedback to internal audit. Lloyd’s also had oversight of the final audit report for each managing agent, to ensure consistency across the market.

The project ended with the Lloyd’s team feeding their review findings back to the market at an LMA presentation held on 30 June. This was followed by a similar presentation to the Lloyd’s broker community organised by the London & International Insurance Brokers' Association (LIIBA).  Feedback sessions have also been held with the market’s regulators, the FCA and HM Treasury.

Project findings

The project findings are derived from the findings in each managing agents’ audit reports and were benchmarked by the Lloyd’s team. To date, 40 internal audit reports have been finalised, covering 70% of the market. With the remaining audit reports still to be finalised and a few new managing agents to be reviewed later this year, the Lloyd’s team is now beginning work to update Lloyd’s guidance on sanctions.

Next steps

Lloyd’s sanctions guidance will focus on updating existing sanctions due diligence guidance, and developing new ‘practical’ guidance, including examples of best practice for compliance, delegated underwriting and claims areas. In addition to the guidance the Lloyd’s team will work on the following initiatives and tools:

  • Improving the Draft Compliance Manual for coverholders, as well as the Lloyd’s e-learning modules with a focus on updating the content and adding more depth and relevance to the questions.
  • Continued liaison with, who have offered a screening solution to the market at very competitive rates for Lloyd’s coverholders. gives managing agents the ability to monitor their coverholders’ frequency and volume of screening.
  • Looking at central screening options for risks bound by coverholders in Italy and Canada, where Lloyd’s receives the required data centrally.
  • Looking at introducing e-Learning modules for third party administrators of claims.
  • Issuing further guidance on key problem areas for sanctions purposes in claims, and in areas such as the use of sanctions clauses.

Lloyd’s is keen to have feedback from the market on its guidance work, and therefore invites market participants to join its dedicated working groups which will develop new guidance covering compliance, delegated underwriting and claims. 

If you are interested in participating in any of these working groups, please contact Jacqueline Sinclair

Jacqueline Sinclair

Compliance Director, CFC Underwriting