A warm Welcome to the December market Breakfast Group.
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Transcript of A warm Welcome to the December market Breakfast Group.
Control Framework
Breakfast Group agenda
9:00 Arrival, breakfast & networking All
9:15 Festive welcome! Ali Dove
9:20 Canopius Coverholder Framework Jane Zonnenberg
9:40 Phase II project update Approach to Phase III
Jaana RouvariAli Dove
10:00 Trading advice and compliance tools: Christmas update
Giles Taylor
10:15 Q & A All
10:30 Close
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Control Framework
Celebrating Success
Ark Syndicate Management Ltd
Beaufort Underwriting Agency Ltd
Marketform Managing Agency Limited
R&Q Managing Agency Limited
Canopius Coverholder Framework 2014
The Canopius Journey, so far… Where Are We Currently? What’s Next?
Bite-Sized Chunks
Identify risk factors Coverholder data iro the
risk factors Application of the risk
factors Overall rating mechanism
for inherent risk Approach for assessing risk Audit results template Bordereaux gap analysis Update DA Audit Policy Design BAU process
Risk Factors
Number of territories in which the coverholder writes business
Principal regional complexity (i.e. business written in Australia, Canada, Greece, Ireland, Italy or USA
Multiple classes of business (specifically cargo or bloodstock)
Method of introducing business (prior submit, coverholder discretion over pre-determined rates, no coverholder referral)
Route of business (direct, via broker, via master coverholder)
Overall rating mechanism for inherent risk
Excel spreadsheet High/Medium/Low per risk factor Assign values to H/M/L per risk factor
Rating
Complexity of business written -
Risk rating: Binding
Authority - Single or multiple
territories
Complexity of business written -
Risk rating: Principal Regional
Complexity
Complexity of business written -
Risk rating: Lines of Business
NEW: Class of Business
NEWMethod of introducing business -
Risk rating:Prior Submit
NEWRoute of business -
Risk rating:Direct/Broker/S
ub-delegated
Complexity of business written -
Risk rating: Binding
Authority - Single or multiple
territories
Complexity of business written -
Risk rating: Principal Regional
Complexity
Complexity of business written -
Risk rating: Lines of Business
NEW: Class of Business
NEWMethod of introducing business -
Risk rating:Prior Submit
NEWRoute of business -
Risk rating:Direct/Broker/S
ub-delegated
Total Score Rating
Located/ Domiciled
Class of Business/ Sub Class
Underwriting Authority
Route of Business
Low
Coverholder writes bus iness in one
terri tory only. This i s a lso the
coverholders phys ica l/ domici led
location
Coverholder writes bus iness in a s ingle country which is not: Austral ia , Canada,
Greece, Ireland, Ita ly or US
Coverholder writes only reinsurance
bus iness or only one l ine of bus iness excl . cargo and bloodstock
Al l ri sks are prior submit or rates are set and coverholder
discretion is not permitted
Direct to underwriter 7 10 7 2 4 30 Low
Medium
Coverholder has offi ces in multiple
locations and writes risks only in these
terri tories
Coverholder writes bus iness in one of
the fol lowing countries : Austral ia ,
Canada, Greece, Ireland, Ita ly or US
Coverholder writes multiple l ines of
bus iness excl . cargo and bloodstock
Pre-determined rates exist but Coverholder
has authori ty to exercise discretion
within agreed parameters
Via Broker 14 20 14 4 8 60 Medium
High
Coverholder writes bus iness across borders and/or
global ly
Coverholder writes bus iness worldwide
Coverholder writes multiple l ines of
bus iness including cargo and/or bloodstock
Coverholder has ful l authori ty to set rates
without referral
Via Master Coverholder(take from lead/fol low)
21 30 21 6 12 90 High
Comments
Coverholder Name
Audit results template
Lloyd’s 2014 audit scope converted to a template to grade audit reports
Converting the results of the audits into an assessed risk rating:• New reports received after template introduced• Retrospectively applied to reports received earlier in 2014
Appendix0
Y 0 0 0
N 0 0 0
N/A 0 No score 0
1 EXECUTIVE SUMMARY Covered in the Audit?Issue - Y, N or N/A
Section Score
1.11.1. The auditor is expected to provide an executive summary to the managing agent. These should provide details of the main findings and issues, an indication of the coverholder's general suitability, culture and openness and a review of any previous recommendations.
TOTALS & AUDIT SCORE
Bordereaux gap analysis
Bordereau template prepared based on data coverholder typically expected to provide
Gap analysis performed on each bordereau per BA Simple yes/no answers on whether/not specific data is
regularly provided Values assigned to each data field according to
significance Total rating applied per binder
Desktop review - used for adhoc performance monitoring or where rating is marginal
Where Are We Currently?
Delegated Authority Audit Policy has been updated
Currently embedding the process of ongoing rating of a fluid coverholder population
Scoping out Control Framework recording and reporting mechanisms on BDX
What’s Next?
Review of the audit scope – removing possible duplications, or questions that we (as the Managing Agent) can answer
Identification of those cases where brokers are involved in the coverholders’ data
Identifying any possible areas of overlap with Conduct Risk questionnaire
Test and refine practical application of audit frequency decision process against backdrop of topical regulatory focus
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Control Framework
1. 2014 round up
2. Market progress
3. Broker questionnaire
4. Lloyd’s support for Control Framework in 2015
5. Approach to Phase III – Open Market
Today…
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Control Framework
The 2014 Christmas Breakfast Group Quiz
Q1: What cuts of pork make bacon? (Hint: two answers!)
Q2: What is the traditional casing for a pork sausage?
Q3: To the nearest 10 – How many bacon and sausage sarnies have we gone through in 2014?
Q4: The history of the mince pie can be traced to the 13th century, what were the three key traditional fillings for this original pie?
Q5: How many market breakfast meetings have we had in 2014?
Q6: To the nearest 10 – How many people in total have attended the market breakfast group meetings?
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Control Framework
Achievements and progress… on a more serious note
• Lloyd’s market support through nearly 300 managing agent and broker meetings
• Celebrating a few more sign-offs today, with rest progressing well
• Some delays experienced due to renewals, changes in staff, other regulatory initiatives
Managing agent sign-off outlook
Q4 2014
30%
Q1 2015
50%
Q2 2015
80%
Q3 2015
90%
Q4 2015
100%
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Control Framework
Broker questionnaire
• Developed by LMA’s Delegated Authorities Operations Committee
• Looks to make the processing an intermediary undertakes transparent
• Acts as a conversation opener between managing agents and those brokers who undertake processing of tax and regulatory information
• Lloyd’s role is to facilitate the process of requesting and disseminating information
• Lloyd’s will not take a view on the information provided by brokers
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Control Framework
Control Framework Support in 2015For managing agents yet to sign off
Your normal Lloyd’s Delegated Authorities contact
For brokers
Martin Baker
Queries
Track progress through 6-monthly review meetings and additional catch ups
Communications
Queries
Broker questionnaire
Communications
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Control Framework
What about Phase III- Open Market?• Analysis and market consultation carried out over the past 6 months
• Control Framework evaluated in light of a number of existing initiatives
• Consideration given to ongoing market modernisation initiatives changing open market process and controls
• Everything in the context of taking a pragmatic approach
• Further mitigation of the Control Framework risks addressed through building robust central services
• Addressed at the same time as LMG market modernisation initiatives
• Negates the need for a separate managing agent sign-off
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Crystal/RLT updateControl Framework Breakfast, 9th December
Giles Taylor, Lloyd’s
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Key items
► Service standards and usage
► New content
► LITA vision & 2015
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Service standards & usage
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The headlines…
• 12,000 Crystal pages
• 15,000 Crystal users
• c. 55,000 Crystal reports pcm
• Still only 25% of users log in
• c. 500 RLT reports
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Non-US consumer information
Subjects
► General
Definition of ‘consumer’
Consumer protection legislation
► Insurance documentation
Pre-contractual notification and disclosure
Insurance documents
► Processing and servicing of risks
Cancellation and non-renewal
Tacit renewal
Claims handling
Definition of ‘complaint’
Complaints handling (internal procedures)
Details of ombudsman (external procedures)
Jurisdictions
Australia
Canada*
France
Germany
Italy
New Zealand
South Africa
Spain
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* At provincial level, Alberta, British Columbia, Manitoba, Ontario, Quebec
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US consumer information
Consumer complaints Posted: California, Florida, Illinois, Louisiana, Maryland, New Jersey, New York, North Carolina, South Carolina, Texas
By y.e. 2014: Connecticut, Delaware, Kentucky, Pennsylvania, USVI
2015: All remaining states
Homeowners Cancellation & Non-renewal
Posted: California, Connecticut, Delaware, Florida, Georgia, Illinois, Louisiana, Maryland, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Texas
Q1 2015: Massachusetts, Oklahoma, Virginia, Washington, Colorado, Tennessee, Ohio, Alabama, Missouri, Minnesota
2015: All remaining states
Claims handling California, Florida, New York, Texas
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Intermediary licensing
Completed for licensed territories
Drafts prepared for following priority countries, but not ‘live’
• Argentina
• Azerbaijan
• Brazil
• Chile
• China
• Colombia
• Czech Republic
• Ecuador
• Finland
• India
Remaining unlicensed territories drafted up to ‘U’, but not live
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• Indonesia
• Malaysia
• Mexico
• Nigeria
• Panama
• Paraguay
• Saudi Arabia
• South Korea
• Turkey
• Vietnam
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LITA vision and 2015
Key topics to address…
Risk Location Guidance – separate from coverholder approvals (Y4125)
US Law & Jurisdiction – reaffirm guidance (Y3406)
Renewal of online offering
Review current robustness of Crystal IT infrastructure
Consult with the market
Develop business case to overhaul Crystal, Risk Locator
LITA offering
Expanded provision of advice
Regulatory thought leadership
Above all, forward looking
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Control Framework
Further information on Control Framework [email protected]
www.lloyds.com/controlframework