The Insurance Accounts Directive (Lloyd's Syndicate and Aggregate Accounts) Regulations 2008
2008 No. 1950
Insurance
The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008
Made 22th July 2008
Laid before Parliament 22th July 2008
Coming into force 15th August 2008
The Treasury, being a government department designated1for the purposes of section 2(2) of the European Communities Act 19722in relation to the authorisation of the carrying on of insurance business and the regulation of such business and its conduct, in exercise of the powers conferred on them by that section, make the following Regulations:
PART 1
GENERAL
Citation, commencement and application
1.—(1) These Regulations may be cited as the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008.
(2) These Regulations come into force on 15th August 2008 and apply in relation to financial years beginning on or after 1st January 2009.
Interpretation
2.—(1) In these Regulations—
“the 2006 Act” means the Companies Act 20063;
“the 2008 Regulations” means the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 20084;
“appropriate audit authority” means—
(a) the Secretary of State, or
(b) if the Secretary of State has delegated functions under section 1252 of the Companies Act 2006 (delegation of the Secretary of State’s functions) to a body whose functions include receiving notice that an auditor of a syndicate or of the aggregate accounts has ceased to hold office, that body;
“the Authority” means the Financial Services Authority;
“the Council of Lloyd’s” means the Council constituted by section 3 of Lloyd’s Act 1982 (the Council);
“financial year” means the period of 12 months beginning on 1st January;
“Lloyd’s byelaws” means the byelaws made under Lloyd’s Acts 1871 to 19825;
“managing agent” means a person who is permitted by the Council of Lloyd’s, in the conduct of his business as an underwriting agent, to perform, for a member of Lloyd’s, one or more of the following functions—
(a) underwriting contracts of insurance at Lloyd’s;
(b) reinsuring such contracts in whole or in part;
(c) paying claims on such contracts;
“syndicate” means one or more persons, to whom a syndicate number has been assigned by or under the authority of the Council of Lloyd’s, carrying out or effecting contracts of insurance written at Lloyd’s;
“syndicate’s annual accounts” means the accounts prepared in accordance with regulation 5(2)(a) of these Regulations.
(2) In these Regulations any reference to a person being “in default” in relation to a requirement of these Regulations means a person who authorises or permits, participates in, or fails to take all reasonable steps to prevent, a contravention of that requirement.
(3) For the purposes of these Regulations an underwriting year of account is closed—
(a)
(a) at the time when a contract of reinsurance to close that year of account, which complies with the requirements in the Lloyd’s byelaws, takes effect; or
(b)
(b) in the case of a syndicate which consists of a single corporate member, at the time when an amount representing the provision for all known and unknown liabilities attributable to the closing year of account, is included in the underwriting account for the following underwriting year.
(4) Except as otherwise provided in these Regulations, words and expressions used in the 2006 Act have the same meaning in these Regulations as they have in that Act.
Senior Statutory Auditor
3.—(1) In these Regulations, “senior statutory auditor” means the individual identified by a firm as senior statutory auditor in relation to an audit in accordance with the standards or guidance mentioned in section 504(1) of the 2006 Act (senior statutory auditor).
(2) The person identified as senior statutory auditor must be eligible for appointment as auditor of the syndicate in question under Chapter 2 of Part 42 of the 2006 Act (statutory auditors: individuals and firms).
(3) The senior statutory auditor is not, by reason of being named or identified as senior statutory auditor or by reason of his or her having signed the auditor’s report, subject to any civil liability to which he or she would not otherwise be subject.
Summary proceedings
4. Sections 1127 and 1128 of the 2006 Act (summary proceedings: venue and time limit for proceedings) apply to an offence under these Regulations as they apply to an offence under the Companies Acts (as defined by section 2(1) of the 2006 Act).
PART 2
SYNDICATE ACCOUNTS
Preparation of syndicate’s annual accounts
5.—(1) Managing agents must prepare or cause to be prepared the accounts and reports required by paragraph (2), in respect of—
(a)
(a) each syndicate that they manage on 31st December; and
(b)
(b) any syndicate that they were the last managing agent to manage during the preceding year and which has no managing agent on 31st December.
(2) Managing agents must, for the financial year preceding 31st December, in respect of each syndicate—
(a)
(a) prepare annual accounts;
(b)
(b) prepare an annual report; and
(c)
(c) cause to be prepared an auditor’s report.
(3) The accounts and annual report required by paragraph (2) must—
(a)
(a) be prepared within a period of 3 months beginning immediately after the end of the syndicate’s financial year;
(b)
(b) state that they are prepared under this regulation; and
(c)
(c) comply with the requirements in Schedule 1 to these Regulations.
(4) The accounts required by paragraph (2)(a) must also contain the information on auditor remuneration required by Schedule 2 to these Regulations.
(5) Schedules 1 and 2 to these Regulations have effect.
Preparation of syndicate underwriting year accounts
6.—(1) Managing agents must, in respect of each syndicate to which regulation 5(1) refers, prepare or cause to be prepared underwriting year accounts in accordance with paragraph (2), unless—
(a)
(a) no underwriting year of that syndicate has been closed in the preceding financial year or is being closed at the end of that financial year; or
(b)
(b) the members of the syndicate for each underwriting year included in the underwriting year accounts, agree unanimously, in writing, that no underwriting year accounts shall be prepared in respect of that syndicate.
(2) The underwriting year accounts must be an account which—
(a)
(a) is prepared on an underwriting year basis; and
(b)
(b) gives a true and fair view of the result of that underwriting year at closure.
(3) The accounts required by this regulation must—
(a)
(a) be prepared within a period of 3 months beginning immediately after the end of the syndicate’s financial year; and
(b)
(b) state that they are prepared under this regulation.
(4) Managing agents must cause to be prepared an auditor’s report on the underwriting year accounts required by this regulation stating whether a true and fair view is given of the result of the underwriting year at closure.
(5) Part 42 of the 2006 Act (statutory auditors) applies to an auditor appointed for the purposes of this regulation subject to any necessary modifications to take account of the fact that the syndicate is unincorporated, as it applies to the person appointed for the purposes of regulation 5 or the person appointed to report on the aggregate accounts under section 1210 of the 2006 Act (meaning of “statutory auditor”)6.
Approval and signing of accounts
7.—(1) A syndicate’s annual accounts must be approved and signed by the syndicate’s managing agent and, where the managing agent is a body corporate or a partnership, the accounts must be approved by the board of directors or partners and signed by a director or partner of the managing agent, authorised to sign on its behalf.
(2) The signature must be on the syndicate’s balance sheet.
(3) Every copy of the balance sheet which is circulated, published, issued or delivered to the Authority must state the name of the person who signed it on behalf of the syndicate’s managing agent.
Accounts to be sent to syndicate members, the Council of Lloyd’s and the Authority
8.—(1) The managing agent responsible for the preparation of the accounts of a syndicate must send a copy of the accounts and reports prepared under regulations 5 and 6 to every member of Lloyd’s who participates in that syndicate and to the Council of Lloyd’s, within 3 months from the end of the financial year.
(2) The managing agent responsible for the preparation of the accounts of a syndicate must send a copy of the accounts and reports prepared under regulations 5 and 6 to the Authority within 6 months from the end of the financial year.
(3) References in this regulation to sending documents to a person include references to using electronic communications for sending copies of those documents to such address as may for the time being be notified to the managing agent by that person for that purpose.
Publication of syndicate accounts and reports
9. Where a managing agent has sent accounts and reports to the Council of Lloyd’s under regulation 8, the Council must—
(a) make available, on reasonable notice, those accounts and reports for inspection by any person without charge and during business hours at the Council’s head office for a period of three years from the date of signature of each document; and
(b) supply to any person upon request a copy of those accounts and reports (or such part of those accounts and reports as may be requested) at a price not exceeding the administrative cost of making the copy, for a period of three years from the date of signature of each document.
Auditor’s report
10.—(1) A...
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