1.1 Frameworks within the London markets

Domestic market and global market

1. Serves customers in own territory
2. Customers comes from countries

London had remained as largest globally for premium volume though put 10% market share $160bn then US $80bn

Lloyds customer base in the USA and canada is higher than it is for the company market due to distribution network? why the difference?

why client choose a domestic market over a global market insurance

1. served well historically and loyalty
2. clients needs broker might not offer global market option
3. local market have set capacity to handle risk or not in appetite
4. domestic might be leader and global followers

No choice but use domestic markets only

State/national insurers have stifled competition in certain markets EG LATAM

Underwriting platforms in CHINA
Looking to...

Singapore and Dubia:
service companies (sister company to syndicate and managing agency)

licensing and regulation

1. companies obtain permission to accept risk (Lloyds central licensing)

1.1.1 Market regulation

UK regulation

1. FCA & PRA for insurers & Society of lloyds
2. FCA for lloyds broker only
   Insurance distribution directive
   doing business in EU
   EU passporting: Authorisation in an insurer’s EU Home State generally permits business across the EU without additional local financial or solvency requirements.

An insurer can trade through a local branch (“establishment”) or directly across borders from its Home State (“services”), while complying with local policyholder-protection rules.

UK insurers reaction to brexit

FCA PRIN (Principle for business)
High level principles in the FCA hand book applicable:
integrity, skill, risk management, financial resources, fair treatment EXT
FCA ICOBS ( Insurance conduct of business)

1. distance marketing products
2. advising clients clearly to inform purchasing decision
3. Rights to cancel anf effects of cancellation
4. handling claim
   Alignment of the regulators’ expectations with the CII Code of Ethics & Vulnerable customers

FCA Consumer Duty
• Products and services. • Price and value. • Consumer understanding. • Consumer support

PRA Rulebook
allocation of responsibilities; • conduct standards; • fitness and propriety; • senior insurance management functions; and • Lloyd’s – special provisions.

PRA insurance - allocate responsibility via SM&CR

PRA insurance - fitness and propriety

PRA insurers
2. risk management, compliance, internal audit, actuarial, anything concerning the effective running of the firm, or anything else which is of specific importance to the sound and prudent management of the firm.

REQUIRMENTS of Senior Managers and Certification Regime (SM&CR) and

SM&CR applies to both insurers and brokers/intermediaries.
Senior Managers Regime - need FCA or PRA approval for need additions
each senior manager needs a statement of responsibilities
prescribed responsibilities

Certification Regime
not senior managers but role mean for them to cause ‘significant harm’ to the firm or its customers

Conduct rules

1. Individual conduct rules = integrity, cooperative with REGs, standards of market conduct
2. Senior manager conduct rules = business complies with REGs standards, delegation of responsibilities
3. Reasonably expect notice is disclosed appropriately information

UK Corporate Governance Code

Board leadership and company purpose
principle

1. Led by board to generate value, purpose values and strategy, REPORTING + Engagement of the board, workforces policies and practices are consistent
   Provisions

Division of responsibilities

Composition succession and evaluation

Audit, risk and internal control

Remuneration

European Regulations

Solvency II UK equivalent
Financial service and markets (FSMA) act 2023
...

1.2 Intermediary

Reminder of types

1. single - offer customer product from single insurer
2. multi - different product from 1 insurer
3. independent - search market for best insurer for client
4. coverholder - Authority to insurer or client
5. managing general agent - have been delegated authority by insurer or broker (DUAL by howden)
6. open market - certain regions (Canada, israel, italy, nambia, portugal, south africa, spain and switzerland)

Regulatory environment

Brokers and coverholder regulated by FCA for prudential and conduct matter

IDD - insurance distribution directive
SETS consumer protection provisions in insurance + regulation

1. Professionalism
2. Commission disclosure
3. New product governance requirements
4. Ancillary insurance intermediaries
5. Insurance product information documents

remember WHY?

Client money
trust accounts
risk transfer

Broker obtain risk for insurers and they chose panel + leaders

intermediaries play a large part in the planning, underwriting, pricing and documentation of risks written in the London Market