Lloyd's Acts and Bye-laws

 

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1. Lloyd’s Act 1871 (34 Vict. c. xxi)

Arrangement of Original Sections

Section

            1.         Short title.

            2.         Cessor of existing constitution.

            3.         Incorporation of Lloyd’s.

            4.         Property, &c., vested in Society.

            5.         Contracts, &c., to remain in force.

            6.         Actions, &c., not to abate.

            7.         Debts to be paid and received by the Society.

            8.         Officers continued.

            9.         General saving for rights and liabilities.

            10.       Objects of the Society.

            11.       Committee—number and quorum.

            12.       First Committee.

            13.       Retirement of Members of Committee.

            14.       Rotation of Committee–men.

            15.       Elections of Committee–men.

            16.       Re–eligibility of Members (of Committee).

            17.       Casual vacancies.

            18.       Voting at meetings.

            19.       Fundamental rules in schedule.

            20.       Exclusion from membership for violation of fundamental rules, &c.

            21.       Exclusion from membership for fraud, &c.

            22.       Exclusion from membership for bankruptcy, &c.

            23.       Exclusion from membership for non–payment of subscription, &c.

            24.       Power to make bye-laws.

            25.       No exclusion from membership by bye-laws.

            26.       Allowance of bye-laws by Recorder.

            27.       Printing and proof of bye-laws.

            28.       Continuance and annulling of existing bye-laws.

            29.       Powers to be exercised by Committee.

            30.       Application of parts of Companies Clauses Act.

            31.       Penalty on imitation of stamp, &c.

            32.       Provision respecting protection of interest of members in shipping, &c.

An Act for incorporating the members of the Establishment or Society formerly held at Lloyd’s Coffee House in the Royal Exchange in the City of London, for the effecting of Marine Insurance, and generally known as Lloyd’s; and for other purposes.

[25th May, 1871]

WHEREAS there has long existed in the Royal Exchange in the City of London an Establishment or Society formerly held at Lloyd’s Coffee House in the Royal Exchange, for the effecting of marine insurance, and generally known as Lloyd’s:

 And whereas the Society is regulated by a deed of association, dated on or about the thirtieth day of August one thousand eight hundred and eleven, which deed, or a deed of accession referring thereto, has usually been from time to time executed by the several members of the Society, and the Society is governed by rules or regulations from time to time made under that deed:

  And whereas the affairs of the Society, and the business conducted by its members as such, are of large and increasing magnitude and importance, but the constitution of the Society is imperfect, and difficulties arise therefrom in relation to legal proceedings, and the management of the affairs of the Society and the incorporation of its members with proper powers would be of great benefit to the shipping and mercantile interests of the United Kingdom, and it is therefore expedient that they be incorporated, and that provision be made for the government of the Society and the conduct of its affairs:

  And whereas by section four hundred and forty-eight of the Merchant Shipping Act, 1854, it is enacted to the effect that any receiver of wreck, or in his absence any justice of the peace, shall, as soon as conveniently may be, examine on oath any person belonging to any ship which may be or may have been in distress on the coast of the United Kingdom, or any other person who may be able to give an account thereof or of the cargo or stores thereof, as to the matters in that section specified, and that the receiver or justice shall take the examination down in writing, and shall make two copies of the same, of which he shall send one to the Board of Trade and the other to the Secretary of the Committee for managing the affairs of Lloyd’s in London, and such last-mentioned copy shall be placed by the said Secretary in some conspicuous situation for the inspection of persons desirous of examining the same:

  And whereas it will be necessary on the incorporation of the Society to secure the continuance of the operation of the said section:

  And whereas the capital stock of the Society consisted on the first day of December 1870 of the sum of forty-eight thousand pounds three pounds per centum consolidated annuities standing in the names of four persons being trustees for the Society:

  And whereas in or about the year 1799 a vessel of war of the royal navy, named the Lutine, was wrecked on the coast of Holland with a considerable amount of specie on board, insured by underwriters at Lloyd’s, being members of the Society, and others, and Holland being then at war with this country the vessel and cargo were captured, and some years afterwards the King of the Netherlands authorized certain undertakers to attempt the further salvage of the cargo on the conditions (among others) that they should pay all expenses, and that one half of all that should be recovered should belong to them, and that the other half should go to the Government of the Netherlands, and subsequently the King of the Netherlands ceded to King George the Fourth on behalf of the Society of Lloyd’s, the share in the cargo which had been so reserved to the Government of the Netherlands:

  And whereas from time to time operations of salving from the wreck of the Lutine have been carried on, and a portion of the sum recovered, amounting to about twenty-five thousand pounds, is by virtue of the cession aforesaid in the custody or under the control of the Committee for managing the affairs of Lloyd’s:

  And whereas, by reason of the mode in which the business of insurance has always been carried on by members of the Society, the names of those who underwrite a particular policy cannot, when a considerable time has elapsed, be traced with certainty, if at all, especially as regards policies anterior in date to one thousand eight hundred and thirty-eight, in which year the books and papers relating to the affairs of the Society were lost in the fire which destroyed the Royal Exchange:

  And whereas it is expedient that the operations of salving from the wreck of the Lutine be continued, and that provision be made for the application in that behalf, as far as may be requisite, of money that may hereafter be received from those operations, and for the application to public or other purposes of the aforesaid sum of twenty-five thousand pounds, and of the unclaimed residue of money to be hereafter received as aforesaid:

  And whereas it is expedient that various powers be conferred on the Society as incorporated, and that its functions be as far as may be defined:

 And whereas it is expedient that provision be made for the incorporation, from time to time, by agreement, with the Society, of other societies, associations, companies, or corporations instituted for purposes connected with shipping or marine insurance:

  And whereas the objects aforesaid cannot be attained without the authority of Parliament:

 May it therefore please Your Majesty that it may be enacted; and be it enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows; (that is to say),

Short title

  1. This Act may be cited as Lloyd’s Act, 1871.

Cessor of existing constitution

  2. On the passing of this Act, the deed of association, dated on or about the thirtieth day of August one thousand eight hundred and eleven, executed by members of the Establishment or Society of Lloyd’s as existing before the passing of this Act, and any deed executed by other members by way of accession thereto, shall be and the same are and each of them is hereby annulled.

Incorporation of Lloyd’s

  3. The Right Honourable George Joachim Goschen, William Simpson, James Leverton Wylie, William Young, Henry Caspar Heintz, Frederic Bernstein Bernard Natusch, James Bischoff, George Dorman Tyser, Michael Wills, William Wilson Saunders, Leonard Charles Wakefield, and Thomas Chapman, and all persons admitted as members of Lloyd’s before or after the passing of this Act, are hereby united into a Society and Corporation for the purposes of this Act, and for those purposes are hereby incorporated by the name of Lloyd’s, and by that name shall be one body corporate, with perpetual succession and a common seal, and with power to purchase, take, hold, and dispose, of lands and other property (which incorporated body is hereafter in this Act referred to as the Society).

Property, &c., vested in Society

  4. All property and rights of or to which the Committee for managing the affairs of Lloyd’s, or any person on their behalf, or any trustee for that Committee, or for the members of Lloyd’s, are or is possessed or entitled at law or in equity at the passing of this Act, shall by virtue of this Act belong to the Society to the same extent and for the same estate and interest as the same respectively is and are at the passing of this Act vested in that Committee, person, or trustee, and may be held used, and enjoyed accordingly; and all trustees for the Establishment or Society as it existed before the passing of this Act, or for that Committee, shall be and continue trustees for the Society, as nearly as may be as if this Act had not been passed.

Contracts, &c., to remain in force

  5. Notwithstanding the annulling by this Act of the aforesaid deeds of association and accession, and the incorporation by this Act of the Society, all deeds of trust, leases, mortgages, bonds, contracts, agreements, securities, transfers, and other acts and things before the passing of this Act made, entered into, executed, or done by or with the Committee for managing the affairs of Lloyd’s, or any person or trustee as aforesaid, shall be as good, valid, and effectual to all intents for, against, and with reference to the Society as they would have been for, against, or with reference to such Committee if this Act had not been passed, and may be proceeded on, executed, used, dealt with, and enforced accordingly, the Society being only substituted in or in relation thereto respectively for such Committee.

Actions, &c., not to abate

  6. Notwithstanding the annulling and incorporation aforesaid, any action, suit, prosecution, or other proceeding instituted before the passing of this Act by or against the Committee for managing the affairs of Lloyd’s, or any person or trustee as aforesaid, shall not abate or be discontinued or be prejudicially affected by this Act, but on the contrary, shall continue and take effect both in favour of and against the Society, as it would have done in favour of or against that Committee, or the members thereof, or any of them, or any person or trustee as aforesaid, if this Act had not been passed, the Society being only substituted in or in relation thereto respectively for that Committee or the members thereof, or any one or more of them, or such person or trustee.

Debts to be paid and received by the Society

  7. All debts due to the Committee for managing the affairs of Lloyd’s, or to any person or trustee as aforesaid, with all interest (if any) due or to accrue due thereon, shall be paid to the Society, and shall be recoverable by them, and all debts due by such Committee person, or trustee as aforesaid, with all interest (if any) due or to accrue due thereon, shall be paid by the Society and shall be recoverable from them.

Officers continued

  8. All officers of and persons employed by the Committee for managing the affairs of Lloyd’s, in office or employment at the passing of this Act, shall continue in their respective offices and employments, according to the tenure of their respective offices and employments, and as if they had been appointed by the Society, and be deemed to be officers of or persons employed by the Society, and they and their respective sureties shall be liable as if they respectively had been appointed by and had become bound to the Society.

General saving for rights and liabilities

  9. Notwithstanding the annulling and incorporation aforesaid, and except as by this Act otherwise expressly provided, everything before the passing of this Act done or suffered by or with reference to the Committee for managing the affairs of Lloyd’s, or any person or trustee as aforesaid, shall be as valid as if this Act had not been passed, and the annulling and incorporation aforesaid and this Act respectively shall accordingly be subject and without prejudice to everything so done or suffered, and to all rights, liabilities, claims, and demands, both present and future, which if this Act had not been passed would be incident to and consequent on any and everything so done or suffered, and with respect to all such rights, liabilities, claims and demands the Society shall to all intents represent and be deemed a continuation of the Establishment or Society constituted or regulated by the deeds of association and accession aforesaid, and the generality of this enactment shall not be restricted by any other provision of this Act.

Objects of the Society

  10. The objects of the Society shall be:—

The carrying on by Members of the Society of the business of insurance of every description including guarantee business;

The advancement and protection of the interests of Members of the Society in connection with the business carried on by them as Members of the Society and in respect of shipping and cargoes and freight and other insurable property or insurable interests or otherwise;

The collection publication and diffusion of intelligence and information;

The doing of all things incidental or conducive to the fulfilment of the objects of the Society.

NOTE

Committee—number and quorom

  11. [Repealed by Lloyd’s Act 1982, Sch. 3.]

First Committee

  12. [Repealed by Lloyd’s Act 1982, Sch. 3.]

Retirement of Members of Committee

  13. [Repealed by Lloyd’s Act 1925, s. 4, as from 25 July, 1966.]

Rotation of Committeemen

  14. [Repealed by Lloyd’s Act 1925, s. 4, as from 25 July, 1966.]

Elections of Committeemen

  15. [Repealed by Lloyd’s Act 1925, s. 4, as from 25 July, 1966.]

Re-eligibility of members

  16. [Repealed by Lloyd’s Act 1925, s. 4, as from 25 July, 1966.]

Casual vacancies

  17. [Repealed by Lloyd’s Act 1925, s. 4, as from 25 July, 1966.]

Voting at meetings

  18. [Repealed by Lloyd’s Act 1982, Sch. 3.]

Fundamental rules in schedule

  19. [Repealed by Lloyd’s Act 1982, Sch. 3.]

Exclusion from membership for violation of fundamental rules, &c.

  20. If any member of the Society—

            1.         Violates any of the fundamental rules of the Society; or,

            2.         Is guilty of any act or default discreditable to him as an underwriter or otherwise in connexion with the business of [ . . . ] insurance—

he shall be liable to be excluded from membership of the Society by the votes of four-fifths of such members of the Society as are present at a meeting of the Society specially convened for the purpose, with notice of the object by circular issued to every member six days at least before the day appointed for the meeting, there being present and voting at the meeting one hundred members at least, but a member shall not in any case be deemed for the purposes of this section to have violated any fundamental rule, or to be guilty of any act or default as aforesaid, unless the fact of such violation or guilt has been first ascertained and determined by the award of two arbitrators (each of them being a merchant or shipowner or underwriter, and one of them being nominated by the Committee and the other by the member complained of), or, in case of difference between the arbitrators, by the award of the Recorder of the City of London, or, failing the Recorder, then of one of Her Majesty’s Counsel nominated by him as umpire; and the provisions of [the Arbitration Act 1950 or any statutory modification or re-enactment thereof for the time being in force] shall apply in every such case, and the arbitrators and umpire respectively shall take into consideration all the circumstances of the case, moral as well as legal.

NOTE

Exclusion from membership for fraud, &c.

  21. [Repealed by Lloyd’s Act 1982, Sch. 3.]

Exclusion from membership for bankruptcy, &c.

  22. [Repealed by Lloyd’s Act 1982, Sch. 3.]

Exclusion from membership for non–payment of subscription, &c.

  23. [Repealed by Lloyd’s Act 1982, Sch. 3.]

Power to make byelaws

  24. [Repealed by Lloyd’s Act 1982, Sch. 3.]

No exclusion from membership by byelaws

  25. [Repealed by Lloyd’s Act 1982, Sch. 3.]

Allowance of byelaws by Recorder

  26. [Repealed by Lloyd’s Act 1982, Sch. 3.]

Printing and proof of byelaws

  27. [Repealed by Lloyd’s Act 1982, Sch. 3.]

Continuance and annulling of existing byelaws

  28. The general rules and regulations or byelaws for the management of the affairs of Lloyd’s, passed at a general meeting of the members of Lloyd’s held on the fourth and confirmed at a subsequent meeting held on the eleventh day of January one thousand eight hundred and seventy-one, may be annulled by byelaws under this Act, and, as far as the same are not inconsistent with this Act, the same (except those numbered ninety-three to ninety-nine inclusive) shall continue in force for four months after the passing of this Act (unless sooner so annulled), and no longer, and while so in force shall apply to the Society as incorporated by this Act, and the members thereof; but nothing in this Act shall give any validity or force to any such general rule, regulation, or byelaw as aforesaid, made before the passing of this Act, further or other than it would have had if this Act had not been passed.

Powers to be exercised by Committee

  29. [Repealed by Lloyd’s Act 1982, Sch. 3.]

Application of parts of Companies Clauses Act

  30. Sections ninety-seven to one hundred of The Companies Clauses Consolidation Act, 1845, relating to contracts by and proceedings of and liabilities of directors, are hereby incorporated with this Act, and shall apply to the Committee, and the Society in like manner, mutatis mutandis, as they apply to directors and a company.

Penalty on imitation of stamp, &c.

  31. If any person, without the authority of the Society, or without other lawful excuse (proof whereof respectively shall lie on him) does any of the following things (namely) imitates or copies any stamp, mark, or other thing for the time being used by the Society to distinguish forms of policies of [ . . . ] insurance underwritten by members of the Society or offers or utters or uses any form of policy bearing any such stamp, mark, or other thing as aforesaid, he shall for every such offence be liable, on summary conviction before two justices, to a penalty not exceeding twenty pounds.

NOTE

Provision respecting protection of interest of members in shipping, &c.

  32. [Repealed by Lloyd’s Act 1982, Sch. 3.]

Publication of information under Merchant Shipping Act, &c.

  33. Section four hundred and forty-eight of The Merchant Shipping Act, 1854, shall have effect as if the secretary of Lloyd’s were therein mentioned instead of the secretary of the Committee for managing the affairs of Lloyd’s, and the secretary of the Society shall accordingly continue to receive and publish in manner therein directed the documents therein mentioned, and shall also at all times receive and publish all such information relative to shipping and cargoes as is from time to time sent to him for the purpose by the Board of Trade or by their direction.

Power to undertake recovery of wreck, &c.

  34. The Society may from time to time aid in or undertake in such manner as to them seems fit the discovery, recovery, protection, and restoration or other disposal of property before or after the passing of this Act wrecked, sunk, lost, or abandoned, or found or recovered in, on, or beneath the sea or on the shore, at home or abroad.

Salvage operations as to wreck of Lutine

  35. The Society may from time to time do or join in doing all such lawful things as they think expedient with a view to further salving from the wreck of the Lutine, and hold, receive and apply for that purpose so much of the money to be received by means of salving therefrom as they from time to time think fit, and the net money produced thereby, and the said sum of twenty-five thousand pounds, shall be applied for purposes connected with shipping or marine insurance, according to a scheme to be prepared by the Society, and confirmed by Order of Her Majesty in Council, on the recommendation of [ [[the Financial Services Authority]] ], after or subject to such public notice to claimants of any part of the money aforesaid to come in, and such investigation of claims, and such barring of claims not made or not proved, and such reservation of rights (if any), as [ [[the Financial Services Authority]] ] think fit.

NOTE

Trusts of capital stock

  36. [Repealed by Lloyd’s Act 1911, s. 6.]

Indemnity to trustees

  37. [Repealed by Lloyd’s Act 1911, s. 6.]

Trustees individually responsible

  38. [Repealed by Lloyd’s Act 1911, s. 6.]

Agreements for incorporation of other Societies, &c.

  39. The Society, and any other society, association, or corporation instituted for purposes connected with shipping or [ . . . ] insurance, may from time to time enter into and carry into effect such agreements as they think fit for the incorporation with the Society of such other society, association, or corporation, and for the transfer to the Society of the property and funds, rights and liabilities, and officers and servants, of such other society, association, or corporation, and for other the incidents and consequences of such incorporation; but no such agreement shall have effect unless and until it is confirmed by Order of Her Majesty in Council, on the recommendation of [ [[the Financial Services Authority]] ], whereupon it shall have the like operation as if the terms thereof had been enacted in this Act; and no such agreement shall be recommended for confirmation as aforesaid if by virtue thereof the Society would acquire any power or authority different from the powers and authorities conferred on the Society by this Act.

NOTE

Saving for liability of members, &c.

  40. Nothing in this Act shall confer limited liability on the members of the Society, or in any manner restrict the liability of any member thereof in respect of his individual undertakings, or make any member of the Society as such responsible in any manner for any of the undertakings, debts, or liabilities of any other member of the Society as such, or affect or interfere with or empower the Society or the Committee to interfere with any business whatever other than the business of [ . . . ] insurance carried on by any member of the Society.

NOTE

Saving for rights and powers of Crown, Board of Trade, &c., as to wreck

  41. Nothing in this Act shall take away, abridge, or prejudicially affect any right, title, power, or authority vested in Her Majesty, her heirs or successors, or in any admiral, vice-admiral, or lord of a manor, or in any person or corporation, or in the Board of Trade, or in any receiver of wreck or other officer under The Merchant Shipping Act, 1854, or otherwise in relation to wreck, as defined in The Merchant Shipping Act, 1854, or any interest or right of dealing of any shipowner or other person in or with any property before or after the passing of this Act wrecked, sunk, lost, or abandoned, or found or recovered in, on, or beneath the sea or on the shore, at home or abroad.

Savings respecting exclusion from membership

  42. Nothing in this Act shall confer on the Society as incorporated by this Act any right or power to exclude, by or under any byelaw or resolution or otherwise, any person from membership of the Society by reason of anything done or omitted before the passing of this Act, or confirm or enlarge any such right or power, if existing at the passing of this Act, in the Establishment or Society of Lloyd’s, and on the other hand nothing in this Act shall take away from the Society as incorporated by this Act any such right or power if so existing, or abridge or weaken the same, or prevent the Society as incorporated by this Act from exercising the same, but on the contrary such right or power if and as so existing shall remain in and be exercisable by the Society as incorporated by this Act, in the same cases and in like manner (if any) in which the same would have existed in and been exercisable by the Establishment or Society of Lloyd’s if this Act had not been passed, but not further or otherwise.

Expenses of Act

  43. The costs, charges, and expenses preliminary to and of and incidental to the preparing, applying for, obtaining, and passing of this Act shall be paid by the Society.

The Schedule. The Fundamental Rules of the Society

  1. There shall be underwriting members and non-underwriting members.

  2. A non-underwriting member shall not underwrite in his own name at Lloyd’s, or empower another person to underwrite for him at Lloyd’s.

  3. All underwriting business transacted at Lloyd’s shall be conducted in the underwriting rooms, and not elsewhere.

  4. An underwriting member shall not, by himself or by any partner or other substitute, directly or indirectly, underwrite in the city of London a policy of insurance as follows:

            (1)        In the name of a partnership, or otherwise than in the name of one individual (being an underwriting member of the Society) for each separate sum subscribed; or,

            (2)        For the account, benefit, or advantage, or any company or association, unless they are subscribers to the Society, nor unless every policy underwritten for their account, benefit, or advantage is underwritten in their ordinary place of business.

  5. A member shall not open an insurance account in the name of any person not being a member or subscriber.

NOTE

2. Lloyd’s Act 1888 (51 Vict. c. ii)

NOTE

3. Lloyd’s Signal Stations Act 1888 (51 & 52 Vict. c. xxix)

NOTE

4. Lloyd’s Act 1911 (1 & 2 Geo. V, c. lxii)

Arrangement of Original Sections

Section.

                        Preamble.

            1.         Short and collective titles.

            2.         Definition.

            3.         Extension of objects.

            4.         Objects of Society.

            5.         Amendment of Act of 1871.

            6.         Transfer to Society by Trustees of capital stock.

            7.         Purposes for which capital stock &c. to be held by Society.

            8.         Society may act as Trustee for certain purposes.

            9.         Powers to the Society with reference to guarantees.

            10.       Power to apply capital stock &c. to meet deficiency of guarantors &c.

            11.       Provision respecting protection of interests of Members in shipping &c.

            12.       Power to Committee to temporarily suspend Members.

            13.       Amendment of Section 24 of Act of 1871.

            14.       Notices to Members.

            15.       Costs of Act.

                        Schedule.

An Act to Extend the Objects of and confer Further Powers on Lloyd’s and to Amend Lloyd’s Act 1871.

[18th August, 1911]

WHEREAS by Lloyd’s Act 1871 (in this Act referred to as “the Act of 1871”) certain persons were united into a Society or Corporation for the purposes of that Act and were incorporated by the name of Lloyd’s (which incorporated body was in the Act of 1871 and is in this Act referred to as “the Society”) and various powers were conferred on the Society by the said Act:

  And whereas by the Act of 1871 the objects of the Society were declared inter alia to be the carrying on of the business of marine insurance by Members of the Society and the protection of the interests of Members of the Society and the collection publication and diffusion of intelligence and information:

  And whereas further powers were conferred on the Society and further provisions made with reference to the Society by Lloyd’s Act 1888 and Lloyd’s Signal Stations Act 1888:

  And whereas the Members of the Society have in the past carried on at Lloyd’s insurance business other than marine insurance and it is expedient that the objects of the Society should be extended to the carrying on of the business of insurance other than marine insurance by Members of the Society and that further powers should be conferred on the Society and the Committee of Lloyd’s as hereinafter in this Act provided:

  And whereas by the Act of 1871 it was directed that the capital stock of the Society should be transferred to and kept in the names of four Members of the Society as Trustees for the Members of the Society and such capital stock now stands in the names of certain Members of the Society (hereinafter in this Act called “the Trustees of the capital stock”) as Trustees for the Society and its Members as in the said Act mentioned and it is expedient that the capital stock should be transferred to and held by the Society:

  And whereas in pursuance of the Assurance Companies Act 1909 or the regulations or requirements for the time being of the Society or the Committee or otherwise Members of the Society furnish security in the form of either a deposit with a trust deed or a guarantee or guarantees or partly in the one form and partly in the other which security is available solely for the purpose of meeting their liabilities in respect of policies underwritten by them or on their account at Lloyd’s and the Society have in the past acted as Trustee of certain of such trust deeds and guarantees either solely or jointly with others and doubts have arisen as to the power of the Society to so act and it is expedient that the action of the Society in acting as such Trustee in the past should be confirmed and that the Society should be authorised to act as Trustee of any trust deed or guarantee furnished by any Member of the Society as aforesaid:

  And whereas it is expedient that the Society should be authorised itself to act as guarantor either solely or jointly with any other guarantor or guarantors as hereinafter in this Act provided and that the Society should in certain cases be authorised to make good any deficiency arising by reason of the default of any guarantor or the insufficiency of any security furnished by Members of the Society as aforesaid:

  And whereas the purposes aforesaid cannot be effected without the authority of Parliament:

MAY IT THEREFORE PLEASE YOUR MAJESTY

  That it may be Enacted AND BE IT ENACTED by the King’s Most Excellent Majesty by and with the advice and consent of the Lords Spiritual and Temporal and Commons in this present Parliament assembled and by the authority of the same as follows:—

Short and collective titles

  1. This Act may be cited as Lloyd’s Act 1911 and the Act of 1871 Lloyd’s Signal Stations Act 1888 and this Act may be cited and are hereinafter in this Act referred to as Lloyd’s Acts 1871 to 1911.

Definition

  2. In this Act the expression “the Committee” shall mean the Committee of Lloyd’s constituted under the Act of 1871.

Extension of Objects

  3. The objects of the Society are hereby extended so as to include the carrying on of the business of insurance of every description including guarantee business by Members of the Society and the Act of 1871 shall be read and have effect accordingly.

Objects of Society

  4. Section 10 of the Act of 1871 and Lloyd’s Act 1888 are hereby repealed and in lieu thereof the following provision is hereby enacted and shall have effect accordingly:—

  The objects of the Society shall be:—

The carrying on by Members of the Society of the business of insurance of every description including guarantee business;

The advancement and protection of the interests of Members of the Society in connection with the business carried on by them as Members of the Society and in respect of shipping and cargoes and freight and other insurable property or insurable interests or otherwise;

The collection publication and diffusion of intelligence and information;

The doing of all things incidental or conducive to the fulfilment of the objects of the Society.

Amendment of Act of 1871

  5. Sections 20 24 31 39 and 40 of the Act of 1871 shall be read and have effect as if the word “marine” had been omitted from such sections wherever the same occurs in such sections and as if the word “insurance” where the same occurs in those sections included guarantee business.

Transfer to Society by Trustees of capital stock

  6. Within six months after the passing of this Act the capital stock of the Society shall be transferred by the Trustees of the capital stock to the Society and such Trustees shall on the request of the Society execute and do all such acts and deeds as may be necessary to effect and carry out such transfer and on such transfer being duly made the said Trustees shall be released and discharged from their trust and cease to act as such Trustees and Sections 36 37 and 38 of the Act of 1871 shall be repealed.

Purposes for which capital stock, &c. to be held by Society

  7. The Society shall hold the funds and property of the Society and the income therefrom for all or any of the following purposes:—

            (a)        for defraying the costs, charges and expenses incurred by the Society, the Council or otherwise in the execution and carrying out of Lloyd’s Acts 1871 to 1982;

            (b)        for furthering the objects of the Society;

            (c)        for making good any default by any member of the Society under any contract of insurance underwritten at Lloyd’s which in the opinion of the Council it is in the interests of the members of the Society to make good;

            (d)        for guaranteeing or securing, in such manner as the Council think fit, any debt or obligation of or binding on the Society, any of its subsidiaries or any other person;

            (e)        for such other purposes (if any) as may from time to time be prescribed by byelaw;

and subject thereto for the benefit of the members of the Society jointly.

NOTE

[Society may act as Trustee for certain purposes]

  8.—(1) It shall be lawful and shall be deemed always to have been lawful for the Society to act as trustee either solely or jointly with any other person of any trust deed or guarantee or other document relating to the insurance business carried on at Lloyd’s by Members of or Annual Subscribers to the Society.

  (2) Any trustee or trustees of any such trust deed or guarantee or other document as aforesaid may transfer any trust fund subject to any such trust deed guarantee or document to the Society and assign to the Society the benefit or advantage to which he or they are entitled under any such trust deed guarantee or document and on the execution of such transfer or deed of assignment the Society shall be entitled to such trust fund and to all benefits and advantages under any such trust deed guarantee or document in the same manner and to the same extent and on the same trusts as such trustees held or were entitled to the same.

NOTE

Powers to Society with reference to guarantees

  9. Without prejudice to the provisions of section 7 of this Act the Society may either by itself or jointly with any other guarantor or guarantors guarantee the payment of claims and demands upon contracts of insurance underwritten at Lloyd’s and the Society may for such purposes enter into contracts and may apply the funds and property of the Society and the income therefrom or any part thereof for the purpose of discharging any liabilities of the Society under any guarantees or contracts as aforesaid and the powers conferred on the Society by this section may be exercised by the Council in accordance with byelaws made under Lloyd’s Act, 1982.

NOTE

Power to apply capital stock, &c., to meet deficiency of guarantors, &c.

  10. [Repealed by Lloyd’s Act 1982, Sch. 3.]

Provision respecting protection of interests of Members in Shipping, &c.

  11. [Repealed by Lloyd’s Act 1982, Sch. 3.]

Power to Committee to temporarily suspend Members

  12.—(1) If it be established to the satisfaction of the Committee at any meeting to be held by them in accordance with the Act of 1871 or the bye-laws made thereunder that any Member of the Society has been guilty of any act or default discreditable to him as an underwriter or otherwise in connection with the business of insurance including guarantee business the Committee may by a resolution of a majority of not less than five-sixths of the Members of the Committee present at any meeting duly convened for the purpose at which not less than ten Members of the Committee are present resolve that such Member shall for such period not exceeding two years as they shall determine be suspended from carrying on insurance business including guarantee business as a Member of the Society and on the passing of any such resolution and on notice in writing thereof being given to any such Member so suspended such Member shall cease to carry on as a Member of the Society any insurance business including guarantee business for such period as may be fixed by such resolution of the Committee Provided that any such Member so suspended may within seven days of receipt of notice of any such resolution give notice in writing to the Committee of his desire to appeal to a General Meeting of the Society against the resolution of the Committee under this section and if such notice of appeal be given by such Member the Committee shall summon a General Meeting of the Society to be held within forty-two days after the receipt of such notice of appeal but not before the expiration of a period of twenty-one days after the Committee shall have given notice of such General Meeting to such Member by letter delivered to him personally or addressed to him by post at Lloyd’s and the resolution of the Committee shall be submitted to the Meeting for confirmation and the Meeting shall have power to confirm the same and the decision of the Meeting shall be final and in the event of any such appeal and pending such confirmation the resolution of the Committee shall be inoperative. If within fifteen minutes after the time appointed for the Meeting one hundred Members of the Society are not present the Meeting shall be adjourned to a day and hour (not less than seven days nor more than fourteen days after the day of adjournment) to be fixed and declared by the Chairman of the Meeting and no further notice of the adjourned Meeting need be given and the adjourned Meeting shall be held on the day and at the hour so fixed and declared and if within fifteen minutes after the time appointed for the adjourned Meeting one hundred Members of the Society are not present then the resolution of the Committee shall be deemed not to have been confirmed and shall be inoperative in all respects as if it had never been passed by the Committee.

  (2) No resolution of the Meeting or adjourned Meeting confirming the resolution of the Committee shall be effective unless the same shall be passed at such Meeting or adjourned Meeting or on any ballot taken in pursuance of a demand made thereat (which demand may be made by the Member himself or by six or more Members present) by a majority of not less than three-fourths of the Members present and voting at such Meeting or on such ballot and if no effective resolution shall be passed at such Meeting or adjourned Meeting or on such ballot confirming the resolution of the Committee then such resolution of the Committee shall be deemed to be revoked and shall be inoperative in all respects as if it had never been passed by the Committee.

  (3) A declaration by the Chairman of any General Meeting or adjourned General Meeting held in pursuance or for the purposes of this section as to the number of Members of the Society present or as to the insufficiency of the number of those present to form a quorum or as to the passing or otherwise of a resolution at any such General Meeting shall be final and conclusive.

  (4) The Committee shall publish in the rooms at Lloyd’s the effect of any resolution passed by them under the provisions of this section after the date of the expiration of the time limited for appealing against such resolution and in the event of there being no such appeal and in the event of there being an appeal the Committee shall in like manner publish the confirmation or non-confirmation (as the case may be) of such resolution.

NOTE

Amendment of section 24 of Act of 1871

  13. [Repealed by Lloyd’s Act 1982, Sch. 3.]

Notices to Members

  14. All notices summoning General Meetings and other notices to Members of the Society under the provisions of Lloyd’s Acts 1871 to 1911 or of any bye-laws under any of such Acts not specially directed by any such Acts or bye-laws thereunder to be otherwise given shall be given by posting the same in the rooms at Lloyd’s or in such other manner as may be prescribed by the bye-laws of the Society.

Costs of Act

  15. The costs charges and expenses of and incidental to the preparing applying for obtaining and passing of this Act shall be borne and paid by the Society.

The Schedule

  [Repealed by Lloyd’s Act 1951, s. 6(2).]

5. Lloyd’s Act 1925 (15 & 16 Geo. V, c. xxvi)

NOTE

6. Lloyd’s Act 1951 (14 & 15 Geo. Vi—c. viii)

Arrangement of Original Sections

Section.

            1.         Short and collective titles.

            2.         Interpretation.

            3.         Powers of Society to borrow.

            4.         Saving for powers of Treasury.

            5.         Society may act as trustee for certain purposes.

            6.         Extension of powers of Society with reference to guarantees.

            7.         Miscellaneous amendments of Lloyd’s Acts.

            8.         Costs of Acts.

An Act to confer further powers on Lloyd’s to amend Lloyd’s Acts 1871 to 1925 and for other purposes.

[26th April 1951]

WHEREAS by Lloyd’s Act 1871 (in this Act referred to as “the Act of 1871”) certain persons were united into a society or corporation for the purposes of that Act and were incorporated by the name of Lloyd’s (which incorporated body was in the Act of 1871 and is in this act referred to as “the Society”) and various powers were conferred upon the Society by the said Act:

  And whereas by Lloyd’s Act 1911 the objects of the Society were extended and now include the carrying on by members of the Society of the business of insurance of every description including guarantee business the advancement and protection of the interests of members of the Society in connection with the business carried on by them as members of the Society and in respect of shipping and cargoes and freight and other insurable property or insurable interests or otherwise the collection publication and diffusion of intelligence and information and the doing of all things incidental or conducive to the fulfilment of the objects of the Society:

  And whereas further powers were conferred on the Society and further provisions were made with reference to the Society by Lloyd’s Signal Stations Act 1888 Lloyd’s Act 1911 and Lloyd’s Act 1925:

  And whereas the number of and the business carried on by members of the Society and the activities of the Society have increased and are increasing and the Society desires to erect and fit up new premises for its accommodation and the accommodation of its members and for other purposes and to borrow money but doubts have arisen as to whether it has power to borrow for that or any other purpose and it is expedient that the provisions of this Act with respect thereto be enacted:

  And whereas in addition to members there are annual subscribers to and associates of the Society and others who may be granted admission to the rooms of the Society and who enjoy such privileges as the committee of the Society from time to time determine:

  And whereas under section 8 of Lloyd’s Act 1911 the Society may act as trustee either solely or jointly with any other person of any trust deed or guarantee or other document furnished to the Society by any member of the Society as security for meeting his liabilities under policies underwritten by him or on his account at Lloyd’s and it is expedient to extend the powers of the Society under that section in manner provided by this Act:

  And whereas under section 9 of Lloyd’s Act 1911 the Society may for the purposes mentioned in that section either by itself or jointly with any other guarantor or guarantors guarantee the payment of claims and demands upon policies of insurance including guarantees underwritten by members of the Society or on their account at Lloyd’s subject as mentioned in the said section and it is expedient to extend the powers of the Society under that section in manner provided by this Act:

  And whereas it is expedient that the other provisions of this Act be enacted:

  And whereas the objects of this Act cannot be effected without the authority of Parliament:

  May it therefore please Your Majesty that it may be enacted and be it enacted by the King’s most Excellent Majesty by and with the advice and consent of the Lords Spiritual and Temporal and Commons in this present Parliament assembled and by the authority of the same as follows:—

Short and collective titles

  1.—(1) This Act may be cited as Lloyd’s Act 1951.

  (2) Lloyd’s Acts 1871 to 1925 and this Act may be cited together as Lloyd’s Acts 1871 to 1951.

Interpretation

  2. In this Act unless there is something in the subject or context repugnant to such construction—

  “the Act of 1871” means Lloyd’s Act 1871;

  “the Act of 1911” means Lloyd’s Act 1911;

  “the committee” means the Committee of Lloyd’s constituted under the Act of 1871;

  “the society” means the society incorporated by the Act of 1871 by the name of Lloyd’s.

Powers of Society to borrow

  3.—(1) The Society may raise or borrow money and secure the same and any interest thereon upon any property of the Society either in order to acquire any land or to develop and turn to account any land acquired by or in which the Society is interested (and in particular by constructing altering pulling down reconstructing decorating furnishing fitting up maintaining and improving buildings and whether the same shall be intended for occupation or part occupation of the Society or its members or subscribers or otherwise) or for any other purpose of the Society.

  (2) The powers conferred on the Society by this section may be exercised by the committee: [ . . . ]

NOTE

Saving for powers of Treasury

  4. [Repealed by Lloyd’s Act 1982, Sch. 3.]

Society may act as trustee for certain purposes

  5.—(1) It shall be lawful and shall be deemed always to have been lawful for the Society to act as trustee either solely or jointly with any other person of any trust deed or guarantee or other document [ . . . ].

NOTE

  (2) Any trustee or trustees of any such trust deed or guarantee or other document as aforesaid may transfer any trust fund subject to any such trust deed guarantee or document to the Society and assign to the Society the benefit or advantage to which he or they are entitled under any such trust deed guarantee or document and on the execution of such transfer or deed of assignment the Society shall be entitled to such trust fund and to all benefits and advantages under any such trust deed guarantee or document in the same manner and to the same extent and on the same trusts as such trustees held or were entitled to the same.

  (3) Section 8 (Society may act as trustee for certain purposes) of the Act of 1911 is hereby repealed.

  (4) (a) Notwithstanding the repeal of the said section 8 any trust deed guarantee document transfer deed of assignment or other instrument of whatsoever nature entered into or made under the powers of that section and in force immediately before the passing of this Act shall continue in full force and effect in every respect and may be enforced as fully and effectually as if that section had not been repealed.

  (b) The mention of particular matters in this subsection shall not be held to prejudice or affect the general application of section 38 (Effect of repeal in future Acts) of the Interpretation Act 1889 with regard to the effect of repeals.

Extension of powers of Society with reference to guarantees

  6.—(1) Section 9 (Powers to Society with reference to guarantees) of the Act of 1911 shall have effect subject to the following amendments:—

            (a)        In subsection (1) the following provisions shall be and are hereby repealed:—

                          (i) the words from the beginning of the subsection to the words “member of the Society” where those words first occur;

                          (ii) paragraphs (A) and (B) of the proviso;

            (b)        The following subsection shall be substituted for subsection (3):—

                          “(3) The Society shall notify the Board of Trade of any guarantee given by the Society pursuant to this section and shall furnish to the Board of Trade such further information (if any) in relation to such guarantee as the Board may at any time require.”

  (2) The schedule to the Act of 1911 is hereby repealed.

NOTE

Miscellaneous amendments of Lloyd’s Acts

  7.—(1) In section 20 (Exclusion from membership for violation of fundamental rules &c.) of the Act of 1871 the words “the Arbitration Act 1950 or any statutory modification or re-enactment thereof for the time being in force” shall be substituted for the words “the Common Law Procedure Act 1854 relative to arbitrations.”

  (2) In section 10 (Power to apply capital stock &c. to meet deficiency of guarantors &c.) of the Act of 1911 the words “and the Assurance Companies Act 1946 or any statutory modification or re-enactment thereof for the time being in force” shall be inserted after the words “the Assurance Companies Act 1909” wherever those words occur.

Costs of Act

  8. The costs charges and expenses of and incidental to the preparing applying for obtaining and passing of this Act shall be paid by the Society.

7. Lloyd’s Act 1982 (Chapter XIV)

Arrangement of Sections

Section.

            1.         Citation.

            2.         Interpretation.

            3.         The Council.

            4.         The Chairman and Deputy Chairmen of Lloyd’s.

            5.         The Committee.

            6.         Powers of the Council and of the Committee.

            7.         The Disciplinary Committee and the Appeal Tribunal.

            8.         Insurance business.

            9.         Cessation of membership on bankruptcy.

            10.       Restrictions affecting Lloyd’s brokers.

            11.       Restrictions affecting managing agents.

            12.       Interpretation of sections 10 and 11.

            13.       Application of certain provisions of Companies Act 1948.

            14.       Liability of the Society, etc.

            15.       Repeals and amendments.

            16.       Existing byelaws to continue in force.

            17.       Transitional provisions.

            18.       Costs of Act.

SCHEDULES:

Schedule 1—Classification of members of the Society.

Schedule 2—Purposes for which byelaws may be made.

Schedule 3—Repeals.

Schedule 4—Transitional provisions—

Part I—The first members of the Council.

Part II—Other transitional provisions.

An Act to establish a Council of Lloyd’s; to define the functions and powers of the said Council; to amend and repeal certain provisions of Lloyd’s Acts 1871 to 1951; and for other purposes.

[23rd July, 1982]

WHEREAS—

  (1) By Lloyd’s Act 1871 certain persons were united into a society or corporation for the purposes of that Act and were incorporated by the name of Lloyd’s (hereinafter referred to as “the Society”) and various powers were conferred upon the Society by the said Act:

  (2) By the said Act of 1871 there was established a committee of members of the Society called the Committee of Lloyd’s to have the management and superintendence of the affairs of the Society and to exercise all the powers of the Society (except as in the said Act provided), subject to control and regulation by a general meeting of the members of the Society:

  (3) By the said Act of 1871 the members of the Society in general meeting were empowered to make byelaws for the purposes provided in that Act and generally for the better execution of the Act and the furtherance of the objects of the Society, and byelaws have from time to time been so made:

  (4) Further powers were conferred on the Society and on the members of the Society in general meeting by Lloyd’s Act 1911, Lloyd’s Act 1925 and Lloyd’s Act 1951:

  (5) Since 1968 the number of persons resident outside the United Kingdom admitted as members of the Society and the total number of members of the Society have both greatly increased so that it is no longer practical or expedient for the members of the Society to exercise in general meeting the powers reserved to them by the Acts hereinbefore mentioned:

  (6) It is expedient in order to enable the Society to regulate the management of its affairs in accordance with both present-day requirements and practice and the interests of Lloyd’s policyholders that—

            (a)        there should be established a Council of Lloyd’s to have control over the management and regulation of the affairs of the Society;

            (b)        the said Council should have power to make byelaws for the purposes of such management and regulation, including byelaws making provision for and regulating the admission, suspension and disciplining of members of the Society, Lloyd’s brokers, underwriting agents and others; and

            (c)        certain provisions in Lloyd’s Acts 1871 to 1951 should be amended or repealed:

  (7) It is expedient that the other provisions contained in this Act should be enacted:

  (8) The purposes of this Act cannot be achieved without the authority of Parliament:

  May it therefore please Your Majesty that it may be enacted, and be it enacted, by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—

Citation

  1.—(1) This Act may be cited as Lloyd’s Act 1982.

  (2) Lloyd’s Acts 1871 to 1951 and this Act may be cited together as Lloyd’s Acts 1871 to 1982.

Interpretation

  2.—(1) In this Act, unless the context otherwise requires—

“the Act of 1871” and “the Act of 1911” mean respectively Lloyd’s Act 1871 and Lloyd’s Act 1911;

“annual subscriber” means a person admitted to the Room as an annual subscriber;

“Appeal Tribunal” means the appeal tribunal established pursuant to section 7 (1) (b) of this Act;

“associate” means a person admitted to the Room as an associate;

“the Committee” means the committee constituted by section 5 of this Act;

“the Council” means the council constituted by section 3 of this Act;

“director” includes any person occupying the position of director by whatever name called;

“Disciplinary Committee” means a disciplinary committee established pursuant to section 7 (1) (a) of this Act;

“external member of the Council” means a member of the Council elected pursuant to section 3 (2) (b) of this Act;

“external member of the Society” means a member of the Society who is not a working member of the Society;

“Lloyd’s broker” means a partnership or body corporate permitted by the Council to broke insurance business at Lloyd’s;

“manager” in relation to a Lloyd’s broker or underwriting agent, means a person who exercises managerial functions under the immediate authority of the board of directors, or any member thereof, or of the partners, or any one of them, as the case requires, of the Lloyd’s broker or underwriting agent;

“member of the Society” means a person admitted to membership of the Society;

“nominated member of the Council” means a member of the Council appointed pursuant to section 3 (2) (c) of this Act;

“non-underwriting member” means a member of the Society who is not an underwriting member;

“related company”, in relation to any company, means any body corporate—

            (a)        which is that company’s subsidiary; or

            (b)        of which that company is a subsidiary; or

            (c)        which is a subsidiary of that company’s holding company;

and “holding company” shall have the meaning given by section 154 of the Companies Act 1948 which shall be construed with any necessary modifications where applied to a company incorporated under the law of a country outside the United Kingdom;

“the Room” means the principal room or rooms in the Society’s premises in the city of London for the time being designated by the Council for the purposes of underwriting;

“the Society” means the society incorporated by the Act of 1871 by the name of Lloyd’s;

“special resolution” means a resolution of the Council passed by separate majorities of both—

            (a)        all the working members of the Council for the time being; and

            (b)        all the members for the time being of the Council who are not working members of the Council as aforesaid, that is to say, the external members of the Council and the nominated members of the Council;

“subsidiary” shall have the meaning given by section 154 of the Companies Act 1948 which shall be construed with any necessary modifications where applied to a company incorporated under the law of the country outside the United Kingdom;

NOTE

“underwriting agent” means a person permitted by the Council to act as an underwriting agent at Lloyd’s;

“underwriting member” means a person admitted to the Society as an underwriting member;

“working member of the Council” means a member of the Council elected pursuant to section 3 (2) (a) of this Act;

“working member of the Society” means—

            (a)        a member of the Society who occupies himself principally with the conduct of business at Lloyd’s by a Lloyd’s broker or underwriting agent; or

            (b)        a member of the Society who has gone into retirement but who immediately before his retirement so occupied himself.

  (2) For the purposes of this Act (except sections 10, 11 and 12)—

            (a)        a person controls a partnership or body corporate if—

            (i)         the partners of the partnership, or the directors of the body corporate, or the directors of another company of which the body corporate is a subsidiary, are accustomed to act in accordance with that person’s directions or instructions (otherwise than by reason only that they act on advice given in a professional capacity); or

            (ii)         in the case of a body corporate that person either alone or with any associate or associates (as defined in section 7 (8) of the Insurance Companies Act 1981) is entitled to exercise or control the exercise of one-third or more of the voting power at any general meeting of the body corporate or of another company of which the body corporate is a subsidiary;

            (b)        a partnership or body corporate is connected with Lloyd’s if it is a Lloyd’s broker or an underwriting agent, or controls or is controlled by a Lloyd’s broker or an underwriting agent, or is owned or controlled by a person who also controls a Lloyd’s broker or an underwriting agent.

The Council

  3.—(1) There shall be a Council of Lloyd’s.

  (2) Subject to subsection (3) below, the members of the Council shall be—

            (a)        sixteen working members of the Council elected from among the working members of the Society by those members of the Society whose names are shown on Part I of the Register referred to in Schedule 1 to this Act as working members of the Society;

            (b)        eight external members of the Council elected from among the external members of the Society by those members of the Society whose names are shown on Part II of such Register as external members of the Society;

            (c)        three nominated members of the Council appointed by the Council by special resolution, whose appointments shall not take effect unless and until confirmed by the Governor for the time being of the Bank of England:

                          Provided that a person who is a member of the Society or an annual subscriber or an associate shall not be eligible for appointment as a nominated member of the Council.

  (3) The Council may by byelaw increase or decrease the number of its members and specify the manner in which such increase or decrease may be effected:

  Provided that the number of places available to working members of the Society at any election to the Council shall be such that if filled by such members not more than two-thirds of the members of the Council would be working members of the Council.

  (4) The Council may by byelaw limit the number of places which at any election to the Council shall be available to working members of the Society who are—

            (a)        engaged (as a partner, director or employee) or interested in any way (directly or indirectly) in any one partnership or body corporate which is connected with Lloyd’s, and for the purposes of this paragraph and any byelaw made hereunder—

            (i)         a body corporate which is controlled by a partnership connected with Lloyd’s or by any partner or partners therein shall be deemed to form part of that partnership; and

            (ii)         a related company of a body corporate connected with Lloyd’s shall be deemed to form part of that body corporate;

            (b)        principally occupied with such class or classes of insurance business at Lloyd’s or in such capacities as the Council may by byelaw specify.

  (5) Subject to the provisions of this section, the Council shall by byelaw regulate—

            (a)        the conduct of elections of members of the Council, including inter alia the system of voting at any such election;

            (b)        the number of members of the Council to be elected at each election;

            (c)        eligibility and nomination for membership of the Council;

            (d)        the term of office of members of the Council;

            (e)        any other matter connected with any of the aforesaid matters:

Provided that—

            (i)         the term of any duly elected or appointed member of the Council shall not be extended during the term of office of such member;

            (ii)         subject to paragraph (iii) below, a working member of the Council shall not be eligible for re-election as a working member of the Council for a term commencing sooner than one year after the expiry of his last previous term as a working member of the Council; and

            (iii)        the Chairman of Lloyd’s and each of the Deputy Chairmen of Lloyd’s shall, if the Council shall from time to time so determine in respect of any one (but not more) of their number, be eligible for immediate re-election once only.

The Chairman and Deputy Chairmen of Lloyd’s

  4. The council shall annually elect from among the working members of the Council a Chairman of the Council, who shall be called the “Chairman of Lloyd’s”, and two or more Deputy Chairmen of the Council, each of whom shall be called a “Deputy Chairman of Lloyd’s”.

The Committee

  5.—(1) There shall be a Committee of Lloyd’s.

  (2) The working members of the Council shall constitute the Committee.

  (3) The Committee shall annually elect—

            (a)        the Chairman of the Council, or such other member of the Committee as it thinks fit, to be the Chairman of the Committee; and

            (b)        the Deputy Chairmen of the Council, or such two or more members of the Committee as it thinks fit, to be the Deputy Chairmen of the Committee.

Powers of the Council and of the Committee

  6.—(1) The Council shall have the management and superintendence of the affairs of the Society and the power to regulate and direct the business of insurance at Lloyd’s and it may lawfully exercise all the powers of the Society, but all powers so exercised by the Council shall be exercised by it in accordance with and subject to the provisions of Lloyd’s Acts 1871 to 1982 and the byelaws made thereunder.

  (2) The Council may—

            (a)        make such byelaws as from time to time seem requisite or expedient for the proper and better execution of Lloyd’s Acts 1871 to 1982 and for the furtherance of the objects of the Society, including such byelaws as it thinks fit for any or all of the purposes specified in Schedule 2 to this Act; and

            (b)        amend or revoke any byelaw made or deemed to have been made hereunder.

  (3) Any byelaw made under this Act and any amendment or revocation of any byelaw so made or deemed to have been so made shall be made by special resolution.

  (4) (a) If, within 60 days of the promulgation of any byelaw or the promulgation of any amendment to or revocation of any byelaw, or within such longer period as the Council may determine, a notice in writing signed by not less than 500 members of the Society is served upon the Council requesting that such byelaw, amendment or revocation be submitted to the members of the Society in general meeting, the Council shall convene a general meeting of the Society for that purpose.

  (b) If, at a meeting of the members of the Society convened pursuant to paragraph (a) above, a resolution to revoke such byelaw or amendment or to annul such revocation is passed by a majority of members voting in person or by proxy and the number of members voting in favour of such resolution represents at least one-third of the total membership of the Society, such byelaw, amendment or revocation shall thereby be revoked or annulled, as the case may be.

  (c) A resolution passed pursuant to paragraph (b) above shall not affect anything done or omitted to be done before the resolution is passed, and in particular—

            (i)         in the case of a resolution revoking a byelaw or amendment, shall not affect the previous operation of the byelaw or amendment;

            (ii)         in the case of a resolution annulling the revocation of a byelaw, shall revive the byelaw only from the date of the resolution.

  (d) The Council shall by byelaw regulate the calling and conduct of meetings convened pursuant to paragraph (a) above and the system of voting thereat.

  (5) Subject to subsections (6) and (10) of this section, the Council may, by special resolution, delegate the exercise of such of its powers or functions under this Act as are not required to be exercised by special resolution to any one or more of the following, that is to say:—

            (a)        the Chairman of Lloyd’s;

            (b)        a Deputy Chairman of Lloyd’s;

            (c)        the Committee;

            (d)        the Chairman of the Committee;

            (e)        a Deputy Chairman of the Committee;

  (6) The Council may, by special resolution, delegate—

            (a)        to the Committee but not otherwise—

            (i)         the making of regulations regarding the business of insurance at Lloyd’s; and

            (ii)         the carrying out or exercise of any duties, responsibilities, rights, powers or discretions imposed or conferred upon the Council by any enactment (other than an enactment in this Act) or regulation made in pursuance thereof or by any other instrument having the effect of law or by any other document or arrangement whatsoever, whether or not such enactment, regulation, instrument, document, or arrangement shall be in force or in existence on the day when this Act comes into force, in so far as such delegation is not prohibited by any enactment, regulation, instrument, document or arrangement;

            (b)        to the Committee or to the Chairman of the Committee or to a Deputy Chairman of the Committee but not otherwise the giving of directions regarding the business of insurance at Lloyd’s to any member of the Society, Lloyd’s broker, underwriting agent, director or partner of a Lloyd’s broker or underwriting agent or person who works for a Lloyd’s broker or underwriting agent in such capacity as may be specified by the Council (whether or not the acts required to be done or not done by such direction are already required to be done or not done by the provisions of Lloyd’s Acts 1871 to 1982, or of byelaws made thereunder, or of such regulations as are referred to in paragraph (a) (i) above).

  (7) Nothing in subsections (5) and (6) above shall operate to limit the power of the Council or of the Committee to act by persons, committees, sub-committees or other bodies of persons, whose members may include persons who are not members of the Society, or by the employees of the Society.

  (8) (a) Within 7 days of the making of any regulation by the Committee in the exercise of powers delegated pursuant to subsection (6) above, the Committee shall give notice thereof to the Council and within 60 days of the making of such regulation a member of the Council may, by notice in writing to the Council, request that such regulation be ratified by the Council by special resolution, but, subject to the provisions of paragraph (b) below, such regulation shall remain in full force and effect and nothing done in pursuance of it shall be invalidated.

  (b) If, upon a vote of the Council pursuant to a request under paragraph (a) above, such regulation is not ratified by special resolution it shall thereupon cease to have effect provided that if no vote pursuant to such request is taken within 60 days following the receipt by the Council of such request such regulation shall upon the expiry of such period cease to have effect.

  (c) A regulation ratified by the Council by special resolution shall be deemed for the purposes of subsection (4) above to be a byelaw made by the Council in the exercise of its powers under subsection (2) above.

  (9) A direction given by the Chairman of the Committee or a Deputy Chairman of the Committee in the exercise of powers delegated pursuant to paragraph (b) of subsection (6) above shall cease to have effect after 7 days unless continued by the Committee.

  (10) A delegation under this section is revocable by special resolution of the Council and shall not prevent the exercise of a power or the performance of a function by the Council itself.

  (11) No act or proceeding of the Council or Committee shall be invalidated in consequence only of there being—

            (a)        a vacancy or vacancies in the membership of the Council or Committee at the time of such act or proceeding being done or taken; or

            (b)        some defect in the election or appointment of any member of the Council or Committee.

The Disciplinary Committee and the Appeal Tribunal

  7.—(1) The Council shall by byelaw—

            (a)        (i)establish, provide for the constitution of and define the powers of a Disciplinary Committee or Committees, provided that the majority of the members of any such Disciplinary Committee shall be members of the Society (who need not be members of the Council); and

                        (ii)subject to subsection (3) below, specify the grounds upon which in furtherance of the objects of the Society disciplinary proceedings may be instituted against and penalties or sanctions may be imposed upon any member of the Society, annual subscriber, Lloyd’s broker, underwriting agent or such other class of persons as may be so specified;

            (b)        (i)establish, provide for the constitution of and define the powers of an Appeal Tribunal to hear and determine appeals (whether or not in the exercise of its disciplinary powers and functions), provided that the President and Deputy President of such Appeal Tribunal, who shall both be appointed by the Council, shall not be members of the Society; and

                        (ii)specify the class or classes of decisions, findings, orders, acts or omissions against which there shall lie a right of appeal to such Appeal Tribunal.

  (2) All disciplinary powers and functions of the Council, except the power to confirm, modify or grant dispensation in respect of any penalty or sanction imposed by a Disciplinary Committee or the Appeal Tribunal, shall be exercisable only by a Disciplinary Committee and, in respect of appeals which lie from decisions, findings, orders, acts or omissions of a Disciplinary Committee, only by the Appeal Tribunal.

  (3) The grounds upon which disciplinary proceedings may be instituted and penalties or sanctions may be imposed by virtue of byelaws made pursuant to subsection (1) above, may include breach of or failure to observe any regulation or direction made or given pursuant to subsection (6) of section 6 (Powers of the Council and of the Committee) of this Act, provided that:

            (a)        no penalty or sanction shall be imposed for any breach of or failure to observe any regulation made by the Committee which has ceased to have effect in the circumstances specified in subsection (8) of the said section 6;

            (b)        no penalty or sanction shall be imposed for any breach of or failure to observe any direction given by the Chairman of the Committee or a Deputy Chairman of the Committee unless and until such direction has been ratified by the Committee;

            (c)        any person in relation to whom a direction is given may, by notice in writing to the Council, request that the same be ratified by the Council, by special resolution as soon as practicable, and in default of such ratification no penalty or sanction shall be imposed for such breach or failure, provided that pending such ratification the direction shall remain in full force and effect and nothing done in pursuance of it shall be invalidated.

  (4) (a) For the purpose of any proceedings before a Disciplinary Committee or the Appeal Tribunal the Disciplinary Committee or the Appeal Tribunal may administer oaths, and any party to the proceedings may sue out writs of subpoena ad testificandum and duces tecum, but no person shall be compelled under any such writ to produce any document which he could not be compelled to produce on the trial of any action.

  (b) The provisions of section 36 of the Supreme Court Act 1981 (which provide a special procedure for the issue of such writs so as to be in force throughout the United Kingdom) shall apply in relation to any proceedings before a Disciplinary Committee or the Appeal Tribunal as they apply in relation to causes or matters in the High Court.

  (5) Any person other than a member of the Society in respect of whom disciplinary proceedings are taken under this Act shall be deemed for the purposes of paragraph 8 of Part II of the Schedule to the Defamation Act 1952 to be a person who is subject by virtue of a contract to the control of the Society.

Insurance business

  8.—(1) An underwriting member shall be a party to a contract of insurance underwritten at Lloyd’s only if it is underwritten with several liability, each underwriting member for his own part and not one for another, and if the liability of each underwriting member is accepted solely for his own account.

  (2) An underwriting member (not being himself an underwriting agent) shall underwrite contracts of insurance at Lloyd’s only through an underwriting agent.

  (3) An underwriting member shall in the course of his underwriting business at Lloyd’s accept or place business only from or through a Lloyd’s broker or such other person as the Council may from time to time by byelaw permit.

  (4) Breach of any of subsections (1) to (3) above shall constitute an act or default in respect of which disciplinary proceedings may be brought in accordance with byelaws made under section 7 (The Disciplinary Committee and the Appeal Tribunal) of this Act.

Cessation of membership on bankruptcy

  9. In the event of a member of the Society being adjudicated bankrupt, or being adjudicated or declared insolvent, by the due process of law of a country within the

European Economic Community the Council shall forthwith declare his membership to have ceased:

  Provided that if such adjudication or declaration is set aside on appeal or otherwise the Council shall take immediate action to cancel its declaration.

Restrictions affecting Lloyd’s brokers

  10.—(1) Save as provided in subsections (3) and (4) of this section, the Council shall not permit a person to act as a Lloyd’s broker if that person is a managing agent or is associated with a managing agent.

  (2) A person is for the purposes of this section associated with a managing agent if that person is a partner in or, subject to paragraph (h) of subsection (1) of section 12 (Interpretation of sections 10 and 11) of this Act, owns any interest in a managing agent or if that person supplies the services of any individual who works regularly or from time to time in a relevant capacity for a managing agent.

  (3) If at the date of commencement of this Act a person who is a Lloyd’s broker is associated with a managing agent subsection (1) above shall not apply by reason of such association to that Lloyd’s broker for five years from that date:

  Provided that if during such period of five years any change shall occur in the factors by reason of which the Lloyd’s broker is so associated (other than a change which results in a termination of such association), which the Council shall determine to be a change which is relevant for the purpose of this section, subsection (1) above shall thereupon apply to that Lloyd’s broker by reason of such association.

  (4) If at any time after the date of commencement of this Act a Lloyd’s broker becomes associated with a managing agent, the Council may permit the Lloyd’s broker to continue to broke insurance business at Lloyd’s for such period not exceeding six months as the Council may specify on terms that the Lloyd’s broker shall, on or before the expiry of such period, either cease to be associated with such managing agent or cease to be a Lloyd’s broker:

  Provided that in an exceptional case, in which a longer period than six months is shown to the satisfaction of the Council to be necessary for the purpose of the due administration of the estate of a deceased individual, the Council may permit a further continuance of the association only for such period as is necessary for such purpose.

Restrictions affecting managing agents

  11.—(1) Save as provided in subsections (4) and (5) of this section, the Council shall not permit a person to act as a managing agent if that person is a Lloyd’s broker or is associated with a Lloyd’s broker.

  (2) A person being a partnership or body corporate is for the purposes of this section associated with a Lloyd’s broker if that person is a partner in, or, subject to paragraph (h) of subsection (1) of section 12 (Interpretation of sections 10 and 11) of this Act, owns any interest in a Lloyd’s broker.

  (3) A person being an individual is for the purposes of this section associated with a Lloyd’s broker if that individual is a partner in, or is a director of, or subject to paragraph (h) of subsection (1) of the said section 12, owns any interest in a Lloyd’s broker.

  (4) If at the date of commencement of this Act a person who is a managing agent is associated with a Lloyd’s broker subsection (1) above shall not apply by reason of such association to that managing agent for five years from that date:

  Provided that if during such period of five years any change shall occur in the factors by reason of which the managing agent is so associated (other than a change which results in a termination of such association), which the Council shall determine to be a change which is relevant for the purpose of this section, subsection (1) above shall thereupon apply to that managing agent by reason of such association.

  (5) If at any time after the date of commencement of this Act a managing agent becomes associated with a Lloyd’s broker, the Council may permit the managing agent to continue to act as such managing agent for such period not exceeding six months as the Council may specify on terms that the managing agent shall, on or before the expiry of such period, either cease to be associated with such Lloyd’s broker or cease to be a managing agent:

  Provided that in an exceptional case, in which a longer period than six months is shown to the satisfaction of the Council to be necessary for the purpose of the due administration of the estate of a deceased individual, the Council may permit a further continuance of the association only for such period as is necessary for such purpose.

Interpretation of sections 10 and 11

  12.—(1) For the purposes solely of section 10 (Restrictions affecting Lloyd’s brokers) and section 11 (Restrictions affecting managing agents) of this Act:—

            (a)        “managing agent” shall mean a person who is permitted by the Council in the conduct of his business as an underwriting agent to perform for an underwriting member one or more of the following functions:—

            (i)         underwriting contracts of insurance at Lloyd’s;

            (ii)         reinsuring such contracts in whole or in part;

            (iii)        paying claims on such contracts;

                        and references to a “managing agent” shall include in addition—

            (A)        if a managing agent is a body corporate, any holding company and any person who controls the managing agent or any holding company;

            (B)        if a managing agent is a partnership, any person who is a partner in such partnership, and any person who controls such partnership or a partner in such partnership;

            (b)        in addition to the meaning set out in section 2 (1) of this Act, references to a “Lloyd’s broker” shall include—

            (i)         if the Lloyd’s broker is a body corporate, any holding company and any person who controls the Lloyd’s broker or any holding company;

            (ii)         if the Lloyd’s broker is a partnership, any person who is a partner in such partnership and any person who controls such partnership or a partner in such partnership;

            (c)        references to “that person” when applied to a body corporate shall include, in addition to that body corporate—

            (i)         any related company;

            (ii)         any person who controls or is controlled by that body corporate or any related company;

            (iii)        any director of that body corporate or of any related company;

            (d)        references to “that person” when applied to a partnership shall include, in addition to that partnership—

            (i)         any partner in that partnership;

            (ii)         any person who controls or is controlled by that partnership;

            (iii)        any body corporate which any partner in that partnership controls;

            (iv)        any body corporate which is a related company of a partner in that partnership;

            (v)        any director of any body corporate falling within sub-paragraph (iii) or (iv) or this paragraph;

            (e)        references to “that individual” shall include, in addition to that individual—

            (i)         the spouse of that individual;

            (ii)         the minor children and step-children of that individual;

            (iii)        the trustees of any settlement in relation to which that individual is a settlor;

            (iv)        the trustees of any settlement of which that individual or that individual’s spouse or minor children or step-children is or are beneficiaries;

            (v)        any body corporate which that individual or any of the persons specified in sub-paragraphs (i) to (iv) of this paragraph controls;

                          Provided that in any particular case the Council may determine that this paragraph shall not apply so as to include the spouse of an individual where that spouse is or proposes to become, or works or proposes to work substantially full-time for, a person who is, or who by this section is included as, a Lloyd’s broker or a managing agent;

            (f)         paragraph (e) above shall apply with all necessary modifications in relation to references to a “director” or to a “partner” where the director or partner is an individual;

            (g)        subject to paragraph (h) below, a person owns an interest in a body corporate if he has a beneficial interest in, or being the trustee of a settlement has an interest in, any of the stock, shares or other securities of the body corporate;

            (h)        a person shall not be treated as owning an interest in a body corporate by reason only of such person having an interest in not more than 5 per cent. in nominal amount of that body corporate’s stock, shares or other securities, or any class thereof, which are authorised to be dealt in on a stock exchange or are traded in any over-the-counter market, and in either case are so dealt in or traded regularly or from time to time and in ascertaining in any case whether this paragraph applies:—

            (i)         a person being a body corporate shall be treated as also having an interest in any stocks, shares or securities in which any related company, or in which any person who controls or who is controlled by that body corporate or related company has an interest;

            (ii)         a person being a partnership shall be treated as also having an interest in any stocks, shares or securities in which any person to whom in relation to such partnership reference is made in subparagraphs (i) to (iv) of paragraph (d) above has an interest;

            (iii)        a person, being an individual, who is a director or a partner, shall be treated as also having an interest in any stocks, shares or securities in which anyone to whom reference is made in relation to such person in paragraph (e) above has an interest;

            (i)         an individual works in a relevant capacity for a managing agent if he personally carries out one or more of the functions referred to in paragraph (a) above;

  (2) For the purposes of subsection (1) above—

            (a)        “securities” in relation to any body corporate means any debentures, debenture stock, loan stock or bonds, and any other securities under which the consideration given by the body corporate for the use of the principal secured is to any extent dependent on the results of the body corporate’s business or any part of it, or under which the consideration so given represents more than a reasonable commercial return for the use of that principal:

            (b)        “settlement” and “settlor” shall have the same meanings as in section 454(3) of the Income and Corporation Taxes Act 1970;

            (c)        a person controls a partnership or body corporate if—

            (i)         the partners in the partnership, or the directors of the body corporate, or the directors of another company of which the body corporate is a subsidiary are accustomed to act in accordance with the direction or instructions of such person or are accustomed or directed to act on the joint directions or instructions of such person and others (otherwise than by reason only that they act on advice given in a professional capacity);

                        or

            (ii)         in the case of a body corporate such person either alone or with any associate or associates is entitled to exercise or control the exercise of one-third or more of the voting power at any general meeting of the body corporate or of another company of which the body corporate is a subsidiary or such person has an associate or associates who are so entitled; and in this sub-paragraph—

            (A)        “associate” in relation to any individual means any person referred to in paragraph (e) of subsection (1) above;

            (B)        “associate” in relation to a body corporate means any related company of that body corporate, and any director of that body corporate or related company; and

            (d)        in determining whether a person controls a body corporate for the purposes of sub-paragraphs (A) and (B) of paragraph (a) and sub-paragraphs (i) and (ii) of paragraph (b) of subsection (1) above the words in paragraph (c) (ii) of this subsection “or such person has an associate or associates who are so entitled” shall not apply to cause a person to be associated unless the person or a subsidiary of the person owns an interest in the company.

  (3) This section, section 10 (Restrictions affecting Lloyd’s brokers) and section 11 (Restrictions affecting managing agents) of this Act shall be applied and construed with any necessary modifications with respect to any partnership, body corporate or other entity whatsoever created, in incorporated, in or under the law of a country outside the United Kingdom.

Application of certain provisions of Companies Act 1948

  13.—(1) Sections 34, 36 and 448 of the Companies Act 1948 (execution of deeds abroad, authentication of documents and relief for the liabilities of officers and auditors of a company) are hereby incorporated in this Act and shall apply to the Society, the Council, the Committee and officers and auditors of the Society in like manner mutatis mutandis as they apply to a company (as defined by the Companies Act 1948), its officers and auditors.

NOTE

  (2) For the purpose of this Act any member of the Council and any person to whom (whether individually or collectively) any powers or functions are delegated under this Act is to be regarded as an officer of the Society.

Liability of the Society, etc.

  14.—(1) This section shall only exempt the Society from liability in damages at the suit of a member of the Lloyd’s community.

  (2) For the purposes of this section a member of the Lloyd’s community shall be—

            (a)        a person who is—

            (i)         a member of the Society;

            (ii)         a Lloyd’s broker;

            (iii)        an underwriting agent;

            (iv)        an annual subscriber;

            (v)        an associate;

            (vi)        a director or partner of a Lloyd’s broker or an underwriting agent;

            (vii)       a person who works for a Lloyd’s broker or underwriting agent as a manager; or

            (b)        a person who has been a member of the Lloyd’s community in one or more of the capacities listed in paragraph (a) above; or

            (c)        a person who is seeking or who has sought to become a member of the Lloyd’s community in one or more of the capacities listed in paragraph (a) above.

  (3) Subject to subsections (1), (4) and (5) of this section, the Society shall not be liable for damages whether for negligence or other tort, breach of duty or otherwise, in respect of any exercise of or omission to exercise any power, duty or function conferred or imposed by Lloyd’s Acts 1871 to 1982 or any byelaw or regulation made thereunder—

            (a)        in so far as the underwriting business of any member of the Society or the costs of his membership or the business of any person as a Lloyd’s broker or underwriting agent may be affected; or

            (b)        in so far as relates to the admission or non-admission to, or the continuance of, or the suspension or exclusion from, membership of the Society; or

            (c)        in so far as relates to the grant, continuance, suspension, withdrawal or refusal of permission to carry on business at Lloyd’s as a Lloyd’s broker or an underwriting agent or in any capacity connected therewith; or

            (d)        in so far as relates to the exercise of, or omission to exercise, disciplinary functions, powers and duties; or

            (e)        in so far as relates to the exercise of, or omission to exercise, any powers, functions or duties under byelaws made pursuant to paragraphs (21), (22), (23), (24) and (25) of Schedule 2 to this Act;

unless the act or omission complained of—

            (i)         was done or omitted to be done in bad faith; or

            (ii)         was that of an employee of the Society and occurred in the course of the employee carrying out routine or clerical duties, that is to say duties which do not involve the exercise of any discretion.

  (4) Nothing in this section shall affect any liability of the Society in respect of the death of or personal injury to any person, and for the purposes of this section the expression “personal injury” means bodily injury, any disease and any impairment of a person’s physical or mental condition.

  (5) Nothing in this section shall exempt the Society from liability for libel or slander.

  (6) For the purposes of this section “the Society” means the Society itself and also any of its officers and employees and any person or persons in or to whom (whether individually or collectively) any powers or functions are vested or delegated by or pursuant to Lloyd’s Acts 1871 to 1982.

Repeals and amendments

  15.—(1) Subject to the provisions of Schedule 4 to this Act—

            (a)        the enactments specified in Schedule 3 to this Act are hereby repealed to the extent specified in that Schedule;

            (b)        for section 7 (Purposes for which capital stock &c. to be held by Society) of the Act of 1911 there shall be substituted the following section:—

  “7. The Society shall hold the funds and property of the society and the income therefrom for all or any of the following purposes:—

            (a)        for defraying the costs, charges and expenses incurred by the Society, the Council or otherwise in the execution and carrying out of Lloyd’s Acts 1871 to 1982;

            (b)        for furthering the objects of the Society;

            (c)        for making good any default by any member of the Society under any contract of insurance underwritten at Lloyd’s which in the opinion of the Council it is in the interests of the members of the Society to make good;

            (d)        for guaranteeing or securing, in such manner as the Council think fit, any debt or obligation of or binding on the Society, any of its subsidiaries or any other person;

            (e)        for such other purposes (if any) as may from time to time be prescribed by byelaw;

and subject thereto for the benefit of the members of the Society jointly.”;

            (c)        for section 9 (Powers to Society with reference to guarantees) of the Act of 1911 there shall be substituted the following section:—

  “9. Without prejudice to the provisions of section 7 of this Act the Society may either by itself or jointly with any other guarantor or guarantors guarantee the payment of claims and demands upon contracts of insurance underwritten at Lloyd’s and the Society may for such purposes enter into contracts and may apply the funds and property of the Society and the income therefrom or any part thereof for the purpose of discharging any liabilities of the Society under any guarantees or contracts as aforesaid and the powers conferred on the Society by this section may be exercised by the Council in accordance with byelaws made under Lloyd’s Act 1982.”;

            (d)        in subsection (1) of section 5 (Society may act as trustee for certain purposes) of Lloyd’s Act 1951 the words “relating to the insurance business carried on at Lloyd’s by members of or annual subscribers to the Society” shall be omitted.

  (2) Subject to the provisions of this Act—

            (a)        any enactment (other than an enactment in this Act) or any other instrument having the effect of law; and

            (b)        any other document or arrangement whatsoever;

which is in existence before the first meeting of the Council held pursuant to paragraph 7 of Schedule 4 to this Act and which refers or relates to the Society or to the business carried on by persons as members of the Society or as Lloyd’s brokers or underwriting agents shall on and after such meeting have effect subject to any necessary modifications as if for any reference however worded and whether express or implied—

            (i)         to the Committee of Lloyd’s constituted by the Act of 1871 there were substituted a reference to the Council; and

            (ii)         to the Chairman or a Deputy Chairman of that Committee or to the Chairman or a Deputy Chairman of Lloyd’s there were substituted a reference to the Chairman of the Council or a Deputy Chairman of the Council, as the case may be:

  Provided that any such reference shall be a reference to the Committee of Lloyd’s constituted by this Act or to the Chairman or a Deputy Chairman of the Committee so constituted in any case where, having regard to the power or any exercise of the power of delegation conferred on the Council by this Act, the context so requires.

Existing byelaws to continue in force

  16. Any byelaw made under Lloyd’s Acts 1871 to 1951 shall be deemed to have been made by the Council in the exercise of its power under this Act and subject to the provisions of Schedule 4 to this Act such byelaws shall continue in full force and effect unless and until revoked by the Council pursuant to the said power.

Transitional provisions

  17. The transitional provisions contained in Schedule 4 to this Act shall have effect.

Costs of Act

  18. The costs, charges and expenses of and incidental to the preparing, applying for, obtaining and passing of this Act shall be paid by the Society.

Schedules

Schedule 1. Classification of Members of the Society

  1. The Council shall keep and maintain a Register to be revised as at the first day of July in each year (or such other day or days as the Council may by byelaw provide) which shall be divided into two parts and shall show in Part I thereof the names of all those members of the Society who were classified as working members of the Society as at that date and in Part II thereof the names of all those members of the Society who were classified as external members of the Society as at that date.

  2. A member of the Society may object to his or another member’s classification on the Register and the Council shall by byelaw make provision for the determination of such an objection.

  3. A member of the Society may appeal against a determination under paragraph 2 above to a committee of the Council consisting of one working member, one external member and one nominated member of the Council whose decision shall be conclusive and the Council shall by byelaw make provision for the hearing and determination of such an appeal.

  4. In any election to the Council a member of the Society shall be entitled and only entitled to vote as a working member of the Society or as an external member of the

Society according to his classification on the Register on the date on which notice of such election is given.

  5. Such Register shall be available for inspection by a member of the Society upon request at the premises of the Society in the city of London, or such other place as the Council shall specify.

Schedule 2. Purposes for Which Byelaws May Be Made

  Without prejudice to the generality of the powers vested in the Council by subsection (2) of section 6 (Powers of the Council and of the Committee) of this Act, the Council may pursuant to that section make byelaws for the following purposes:—

            (1)        For regulating the admission to the Society of members as either underwriting members or non-underwriting members, for regulating continuing membership of the Society and for regulating the manner and circumstances in which members may be excluded from membership of the Society, and so that any byelaws made for such purposes may impose or provide for conditions and requirements to be satisfied or complied with on admission or during membership, which conditions and requirements—

            (a)        may from time to time be added to, altered or withdrawn;

            (b)        may include the requirement to give undertakings;

            (c)        may apply to all or any class of underwriting members and as to the whole or any class of their underwriting business; and

            (d)        may be imposed notwithstanding any inconsistency therein with any contract subsisting at the commencement of this Act between the Society and any member of the Society:

                          Provided that, without prejudice to the powers of the Council to require an underwriting member to cease or reduce the level of his underwriting at Lloyd’s, a member of the Society shall not be excluded from membership for breach of a byelaw or failure to satisfy a condition, requirement or undertaking where such breach or failure consists solely of his inability to satisfy a financial qualification contained in such byelaw, conditions, requirement or undertaking, which was not applicable on the date he became an underwriting member or, where he has subsequently increased the level of his underwriting, on the date his application to do so was duly accepted;

            (2)        For requiring an underwriting member to cease to be a member of the Society or to cease underwriting, temporarily or indefinitely, in the event that—

            (a)        a receiving order in bankruptcy is made against such member by the due process of law of any country; or

            (b)        such member makes or proposes any composition with his creditors or otherwise acknowledges his insolvency; or

            (c)        by the due process of law of a country outside the European Economic Community such member is adjudicated bankrupt or is adjudicated or declared insolvent;

                        and for regulating the procedure to be followed in such event;

            (3)        For providing for admission to the Room of annual subscribers, associates, and other persons, for enabling the Council to impose conditions and requirements (including the requirement to give undertakings) as to admission and as to continuing right to admission to the Room and for the grant of tickets for the purpose of conducting business in the Room and the renewal and revocation of such tickets;

            (4)        For regulating the fees, subscriptions and other sums to be paid by members of the Society, annual subscribers, associates, Lloyd’s brokers, underwriting agents and others;

            (5)        For regulating the mode, time and place of summoning and holding general meetings of the Society and the mode of voting and the conduct of proceedings thereat;

            (6)        For regulating the mode, time and place of summoning and holding meetings of the Council and of the Committee and the quorum and manner of proceedings at meetings of the Council and of the Committee;

            (7)        For regulating:—

            (a)        the manner in which byelaws and the amendment and revocation of byelaws shall be promulgated; and

            (b)        the mode in which the Committee shall make regulations and the manner in which such regulations shall be promulgated;

            (8)        For regulating the appointment, powers and functions of the Chairman and Deputy Chairmen of Lloyd’s and the Chairman and Deputy Chairmen of the Committee;

            (9)        For regulating the remuneration and indemnification of all or any of the members of the Council;

            (10)      For regulating:—

            (a)        the appointment of other committees of the Council or of sub-committees of the Committee;

            (b)        the appointment of any person or body of persons with a duty to report to the Council or the Committee;

            (c)        the inclusion of persons who are not members of the Society, Lloyd’s brokers or underwriting agents in such committees, sub-committees or bodies of persons;

            (d)        the functions of such committees, sub-committees, persons or bodies of persons and the manner in which such functions are to be executed; and

            (e)        the mode, time and place of summoning, and holding meetings of such committees, sub-committees or bodies of persons, and the quorum and manner of proceedings thereat;

            (11)      For determining and declaring the grounds upon which and for regulating the mode in which a member of the Council, the Committee or any other committee, sub-committee or other body of persons established by or pursuant to this Act shall cease to be a member thereof;

            (12)      For regulating the grant and renewal of permission to broke insurance business at Lloyd’s as a Lloyd’s broker, for regulating the continuing right to broke such business and for regulating the manner and circumstances in which such permission may be withdrawn, and so that any byelaws made for such purposes may impose or provide for conditions and requirements to be satisfied or complied with on the grant and during the continuance of such permission, which conditions and requirements—

            (a)        may from time to time be added to, altered or withdrawn;

            (b)        may include the requirement to give undertakings;

            (c)        may apply to all or any class of Lloyd’s brokers and as to the whole or any class of their business of broking insurance; and

            (d)        may have the effect that a partnership or body corporate shall not be permitted after a date to be prescribed by the Council to broke insurance business at Lloyd’s so long as it (or any related company)—

            (i)         is controlled by such person or class of persons as may be therein specified; or

            (ii)         owns any interest in any underwriting agent or an underwriting agent of such class as may be specified by the Council;

            (13)      For regulating the grant and renewal of permission to act as an underwriting agent for underwriting members in carrying on their underwriting business at Lloyd’s, for regulating the continuing right to act as such an underwriting agent and for regulating the manner and circumstances in which permission may be withdrawn, and so that any byelaws made for such purposes may impose or provide for conditions and requirements to be satisfied or complied with on the grant and during the continuance of such permission, which conditions and requirements—

            (a)        may from time to time be added to, altered or withdrawn;

            (b)        may include the requirement to give undertakings;

            (c)        may apply to all or any class of underwriting agents and as to the whole or any class of their business as underwriting agents; and

            (d)        may have the effect that a person shall not be permitted after a date to be prescribed by the Council to act as such agent so long as—

            (i)         that person owns any interest in an insurance broker; or

            (ii)         where that person is a body corporate, any related company owns any interest in an insurance broker; or

            (iii)        where that person is a body corporate or a partnership, it or any related company is controlled by, or any interest in it is owned by, such person or class of person as may be therein specified;

            (14)      For providing that permission to carry on business at Lloyd’s as a Lloyd’s broker or as an underwriting agent shall not be granted or renewed and that any such permission may be revoked unless the Council is satisfied as to all or any of the following matters:—

            (a)        that the person having control of the Lloyd’s broker or underwriting agent (being a partnership or body corporate) is, by reason of his character and suitability, a person who should have control of a Lloyd’s broker or such an underwriting agent;

            (b)        that each director or partner of the Lloyd’s broker or underwriting agent (being a partnership or body corporate) is, by reason of his character and suitability, a person who should be a director or partner of a Lloyd’s broker or such an underwriting agent;

            (c)        that each person who works for the Lloyd’s broker or underwriting agent in such capacity as may be specified by the Council is, by reason of his character and suitability, a person who should work in such capacity for a Lloyd’s broker or underwriting agent;

            (15)      For prescribing or regulating terms which are or are not to be included in agreements between underwriting agents and underwriting members or other underwriting agents;

            (16)      For requiring that accounts of underwriting syndicates be audited and that reports and audited accounts be furnished to members of the syndicate and for regulating the form and content of such reports and accounts;

            (17)      For prescribing or regulating information which is to be supplied by underwriting agents to persons applying to become members of the Society;

            (18)      For empowering the Council to nominate and appoint an underwriting agent (in this paragraph referred to as the “substitute agent”) to act as agent or sub-agent for an underwriting member as to the whole or any part of his underwriting business in any case where such member has no underwriting agent for the whole or such part of his underwriting business or where in the opinion of the Council—

            (a)        such appointment is in the interests of such member; or

            (b)        it is essential for the proper regulation of the business of insurance at Lloyd’s;

                        and to give such directions to any underwriting agent already acting for such member as may be desirable in connection with the appointment of the substitute agent;

            (19)      For regulating as among and between underwriting members, Lloyd’s brokers, underwriting agents and any other person transacting with underwriting members the business of insurance (whether as principal or agent) or interested therein, the mode in which insurance shall be effected with underwriting members and the periods at which settlements in respect of insurances so effected shall be made;

            (20)      For empowering the Council to take steps and give undertakings required by or under the law of any country in order to secure authorisation for underwriting members to transact insurance business in or emanating from that country and to require underwriting members, Lloyd’s brokers and underwriting agents to comply with undertakings so given;

            (21)      For requiring members of the Society, Lloyd’s brokers, underwriting agents, annual subscribers, associates and substitutes, or any director or partner of a Lloyd’s broker or underwriting agent or any person who works for a Lloyd’s broker or underwriting agent in such capacity as may be specified by the Council to supply such information to the Council as may be so specified;

            (22)      (a)For empowering the Council to order any inquiry, including an inquiry concerning the affairs of any member of the Society or syndicate of members or any Lloyd’s broker or any underwriting agent;

                        (b)For requiring any member of the Society or any director or partner of a Lloyd’s broker or underwriting agent or any person who works for a Lloyd’s broker or underwriting agent in such capacity as may be specified by the Council to give when required such information as may be in his or its possession or to produce such documents and material as may be in his or its possession or under his or its control relating to the subject-matter of the inquiry;

                        (c)For requiring any person whose affairs have been the subject of any inquiry to pay the costs incurred in connection with the inquiry or to make a contribution thereto;

            (23)      (a)For empowering the Council to order that in or in the course of any such inquiry as is referred to in paragraph (22) of this Schedule investigation be made into frauds or crimes, or circumstances having the appearance of frauds or crimes, practised or attempted or intended to be practised in connection with the business of insurance at Lloyd’s

                        (b)For empowering the Council to take or facilitate the taking of proceedings with a view to the punishment of persons appearing to be responsible for or concerned in any such frauds or crimes;

                        (c)For empowering the Council to supply to any police constable any information, documents or material in its possession, including any information, documents or material obtained pursuant to byelaws made for the purposes specified in paragraphs (21), (22) (b) and (24) of this Schedule;

            (24)      For regulating the circumstances in which members of the Society, Lloyd’s brokers, underwriting agents, annual subscribers, associates and substitutes, or any director or partner of a Lloyd’s broker or underwriting agent or any person who works for a Lloyd’s broker or underwriting agent in such capacity as may be specified by the Council may (without being required so to do) give information or produce documents or material to the Council;

            (25)      For requiring that, save in so far as the same may be used in disciplinary or criminal proceedings, due confidentiality is preserved with respect to any information supplied or documents or material produced pursuant to byelaws made for the purposes specified in paragraphs (21), (22) (b) and (24) of this Schedule, especially in so far as such information, documents or material relate to the affairs of any persons (including principals and clients of Lloyd’s brokers and of underwriting agents) other than those supplying or producing such information, documents or material;

            (26)      For empowering the Council to suspend (for such maximum period as may be specified by byelaw) any of the following from transacting, or being concerned or interested in the transaction of, the business of insurance at Lloyd’s or any class or classes of such business, that is to say:—

            (a)        a member of the Society;

            (b)        a Lloyd’s broker;

            (c)        an underwriting agent; or

            (d)        any person who works for a Lloyd’s broker or an underwriting agent in such capacity as may be specified by the Council;

            (27)      For regulating the grounds on which and the manner in which a member of the Society may by disciplinary proceedings be suspended or excluded from membership or required to cease underwriting temporarily, or indefinitely, or subjected to any lesser penalty prescribed by byelaws, including, but not limited to, a fine and the posting of a notice of censure in the Room;

            (28)      For regulating the grounds on which and the manner in which permission to broke insurance business at Lloyd’s as a Lloyd’s broker may by disciplinary proceedings be revoked or suspended, or a Lloyd’s broker may be subjected to any lesser penalty prescribed by byelaws, including, but not limited to, a fine and the posting of a notice of censure in the Room;

            (29)      For regulating the grounds on which and the manner in which permission to act as an underwriting agent may by disciplinary proceedings be revoked or suspended, or an underwriting agent may be subjected to any lesser penalty prescribed by byelaws, including, but not limited to, a fine and the posting of a notice of censure in the Room;

            (30)      For regulating the grounds on which and the manner in which the right of admission to the Room of an annual subscriber may by disciplinary proceedings be withdrawn or suspended, or an annual subscriber may be subjected to any lesser penalty prescribed by byelaws, including, but not limited to, a fine and the posting of a notice of censure in the Room;

            (31)      For requiring—

            (a)        a partner or director of a Lloyd’s broker or underwriting agent; or

            (b)        a person who works for a Lloyd’s broker or underwriting agent in such capacity as may be specified by byelaw;

                        to undertake to submit to the jurisdiction of the Council and for regulating the grounds on and the manner in which such persons may by disciplinary proceedings be subjected to any penalty prescribed by byelaws including, but not limited to—

            (i)         an order prohibiting or suspending him for being concerned in the conduct of business at Lloyd’s;

            (ii)         a fine; or

            (iii)        the posting of a notice of censure in the Room;

            (32)      For providing for the recovery of any fine or costs imposed pursuant to byelaws as a civil debt;

            (33)      For regulating the powers of a Disciplinary Committee and the Appeal Tribunal, including the power to—

            (a)        subject to or join in proceedings before a Disciplinary Committee or the Appeal Tribunal and to subject to any penalty prescribed by byelaws, a director or partner of a Lloyd’s broker or underwriting agent or a person who works for a Lloyd’s broker or underwriting agent in such capacity as may be specified by the Council;

            (b)        require any such person as aforesaid (whether or not such person is a party to or otherwise concerned in the proceedings) to appear before a Disciplinary Committee or the Appeal Tribunal to give evidence, or to produce documents and material, or both;

            (c)        award costs;

            (34)      For regulating the procedures of a Disciplinary Committee and the Appeal Tribunal provided that such byelaws shall provide for a right to a hearing and legal representation if so desired for any person upon whom a penalty may be imposed or against whom an order may be made;

            (35)      For regulating the procedure whereby the Council—

            (a)        confirms, modifies or grants dispensation in respect of any penalty imposed by a Disciplinary Committee or the Appeal Tribunal; and

            (b)        publishes its decision and any penalty imposed;

            (36)      For providing for the establishment and constitution of an Arbitration Panel to hear and determine disputes relating to the business of insurance at Lloyd’s, for determining the matters to be referred for arbitration to the Arbitration Panel, for requiring parties to such disputes to refer them to the Arbitration Panel for arbitration and for regulating the conduct of any such arbitration proceedings;

            (37)      For regulating the manner, terms and restrictions in, on and subject to which intelligence and information may be supplied to members of the Society and others;

            (38)      For providing for the establishment and maintenance of a scheme for the protection of Lloyd’s policyholders, underwriting members and others in the event of the default of a Lloyd’s broker and for empowering the Council to require Lloyd’s brokers and others to be parties to and to contribute to such scheme as a condition or requirement of the grant or renewal of permission to broke insurance business at Lloyd’s as a Lloyd’s broker or otherwise;

            (39)      For regulating the use of the Room by members of the Society and others;

            (40)      For regulating the investment of the funds and other property of the Society;

            (41)      For regulating the grant and operation of binding authorities, or any other means whereby authority to accept insurance on behalf of underwriting members is delegated;

            (42)      For regulating the appointments and duties of agents or correspondents of the Society at ports and other places;

            (43)      For regulating the appointment, terms of employment and remuneration of a Secretary General and other officers and employees of the Society.

Schedule 3. Repeals

 

 

Chapter            Short Title        Extent of repeal          

34 & 35 Vict. c. xxi       Lloyd's Act 1871          Sections 11 and 12.

Sections 18 to 27

Section 29.

The Schedule 

51 & 52 Vict. c. 29.      Lloyd's Signal Stations Act 1888          The whole Act.

1 & 2 Geo.5. c. lxii        Lloyd's Act 1911          Sections 10 to 13        

15 & 16 Geo 5. c. xxvi  Lloyd's Act 1925          The whole Act.

14 & 15 Geo 6. c. viii    Lloyd's Act 1951          The proviso to section 3 (2).

Section 4        

 

Schedule 4. Transitional Provisions

Part I. The First Members of the Council

  1. Any person who is, immediately prior to the commencement of this Act, a member of the Committee of Lloyd’s pursuant to Lloyd’s Acts 1871 to 1951 and byelaws made thereunder (in this Schedule referred to as “the Old Committee”) shall be a working member of the Council and a member of the Committee established by section 5 of this Act until such time as he would, but for this Act, have ceased to be a member of the Old Committee.

  2. The provisions of Schedule 1 to this Act shall be carried into effect by the Old Committee, which shall provide that a member of the Society may object to his or another member’s classification on such Register, and for the determination of such objection and for the right to appeal against such determination to a sub-committee of the Old Committee consisting of three members thereof whose decision shall be conclusive, and the election of a person to the Council shall not be challenged or otherwise declared to be invalid by reason of any proceedings pursuant to such provision by the Old Committee not being completed or for any other reason whatsoever.

  3. In lieu of the general meeting of members of the Society which would be held in November 1982 but for this Act a ballot to elect four working members of the Council shall be held at that time in accordance with byelaws for the time being in force provided, however, that the four persons to be elected shall be elected from among the working members of the Society by those members whose names are shown on Part I of the Register referred to in Schedule 1 to this Act as working members of the Society. Notwithstanding anything in the byelaws made under Lloyd’s Acts 1871 to 1951 the Old Committee shall appoint two or more members as scrutineers to take the vote and report the result.

  4. A ballot to elect eight external members of the Council shall be held to which the following provisions shall apply:—

            (a)        such ballot shall take place within four months of the day on which this Act is passed;

            (b)        the election shall be by postal ballot of all those members of the Society whose names are shown on Part II of the Register referred to in Schedule 1 to this Act as external members of the Society, and each such member who exercises his right to vote in such ballot shall cast one vote for each of eight of the persons duly nominated for election;

            (c)        the Old Committee shall give not less than 60 clear days’ notice of such ballot by notice in writing to each member of the Society entitled to vote at such ballot, addressed to such member’s last known place of business or abode and the notice shall state that the object of the ballot is to elect eight external members of the Council and the date and time by which nominations for such election are to be received in order to be valid;

            (d)        an external member of the Society shall be nominated for election as an external member by the Council by a requisition signed by not less than sixteen members of the Society entitled to vote at such ballot, which requisition shall be lodged with the Secretary General of Lloyd’s or other person duly authorised by the Old Committee at least 42 clear days before the day on which such ballot is to take place;

            (e)        if the number of persons duly nominated for election as external members of the Council in accordance with sub-paragraph (d) above does not exceed the number to be elected, the nominated candidates shall be declared to be elected and if the number of nominated candidates is reduced by withdrawal or otherwise to no more than that number, the remaining nominated candidates shall be declared to be elected;

            (f)         not less than 28 clear days before the day on which the ballot is to take place, the Secretary General of Lloyd’s or other person duly authorised by the Old Committee shall send to each of the members of the Society entitled to vote at such ballot—

            (i)         a ballot paper containing the name of each duly nominated candidate and stating that each such member shall cast one vote for each of eight of the candidates and the date and time by which ballot papers are to be received in order to be included in the ballot; and

            (ii)         particulars of each candidate including any statement he may wish to make concerning his candidature, the form and content of which shall have been approved by the Old Committee;

            (g)        a notice or ballot paper shall be deemed to have been properly sent by the Secretary General of Lloyd’s or other person duly authorised by the Old Committee if it is sent to a member at his last known place of business or abode but the result of a ballot under this Schedule shall not be invalidated by any failure by the Secretary General of Lloyd’s or other duly authorised person to send a ballot paper to any member of the Society entitled to vote at such ballot or by the non-receipt by any such member of a ballot paper;

            (h)        a member of the Society entitled to vote at such ballot may exercise his right to vote by posting or delivering his ballot paper duly completed to the Secretary General of Lloyd’s or other person duly authorised but only ballot papers received by the Secretary General of Lloyd’s or such person on or before the date and time stated on the ballot paper shall be included in the votes counted;

            (i)         subject to the provisions of any byelaws which may be made pursuant to section 3 (5) of this Act four of the persons elected in such ballot shall be external members of the Council until 31st December 1984, and four of the persons so elected shall be external members of the Council until 31st December 1986.

  5. Within 28 days after the election pursuant to paragraph 4 of this Schedule, the working members and the external members of the Council shall meet at a place, date and time determined by the Old Committee and shall, by resolution passed by separate majorities of both the working members of the Council and the external members of the Council, appoint the first three nominated members of the Council whose appointments shall be governed mutatis mutandis by the provisions of section 3 (2) (c) of this Act.

  6. Subject to the provisions of any byelaws which may be made pursuant to section 3 (5) of this Act the following provisions shall have effect with respect to the appointments made pursuant to paragraph 5 of this Schedule:—

            (a)        one of the persons appointed shall hold office until 31st December 1984, one shall hold office until 31st December 1985, and one shall hold office until 31st December 1986 (such persons, in default of agreement among the persons so appointed, to be determined by lot);

            (b)        no person shall be appointed a nominated member of the Council without his consent.

  7. The first meeting of the Council shall take place at such place, date and time not more than 28 days after the meeting referred to in paragraph 5 of this Schedule as may be decided at that meeting.

  8. Unless at its first meeting the Council shall otherwise determine, the persons who are immediately prior to such meeting the Chairman of Lloyd’s and the Deputy Chairmen of Lloyd’s pursuant to Lloyd’s Acts 1871 to 1951 and byelaws made thereunder shall be respectively the Chairman of Lloyd’s and the Deputy Chairmen of Lloyd’s as if appointed under section 4 of this Act and shall continue to hold such positions until the end of the year 1982.

Part II. Other Transitional Provisions

  9. Until the first meeting of the Council, Lloyd’s Acts 1871 to 1951 shall, subject to the provisions of this Schedule, continue to have effect as though this Act had not been passed.

NOTE

  10. The Council may in preferring any charge against any person refer to, and the Disciplinary Committee in hearing that charge may have regard to and take into account, any act, default or other event which takes place before this Act comes into force.

  11. Section 20 (Exclusion from membership for violation of fundamental rules, &c.) of the Act of 1871 (including the Schedule to that Act setting out the fundamental rules of the Society), section 12 (Power of Committee to temporarily suspend Members) of the Act of 1911 and byelaw 87 (vi) of the byelaws made pursuant to Lloyd’s Acts 1871 to 1951 shall continue to have effect until a Disciplinary Committee shall be established by byelaws made under this Act, and where proceedings have been commenced against any person under either of such sections or under such byelaw, they may be continued in all respects until concluded as if the section or byelaw under which the proceedings had been commenced continued in full force and effect.

 

Part II—Lloyd's Byelaws

A—Registration

This heading brings together all the provisions pertaining to the admission to and exclusion of entities and individuals from the Lloyd's market i.e. underwriting agents, Lloyd's brokers, individual members and corporate members. It is a means by which the Society seeks to control access to the Lloyd's market by ensuring that those allowed to transact insurance business are of a required standard. It will set out the application procedures and the conditions to be fulfilled in order to satisfy the Society that they will maintain the necessary criteria for admission. It also sets out the grounds and procedures by which the participation of the entities and individuals in the market can be terminated, as well as any rights and obligations that they and the Society may have on termination of their participation.

100. The Register of Members

Byelaw No. 22 of 1983, 19 December 1983

COMMENCEMENT

  This byelaw commenced on 19 December 1983.

AMENDMENTS

  This byelaw was amended by

Miscellaneous Administrative Provisions (No. 2) Byelaw (No. 1 of 1993)

Register of Members (Amendment) Byelaw (No. 3 of 1997).

  1. In this byelaw, unless the context otherwise requires:—

            (a)        where a period of days is specified for performing certain actions, giving notice or the like, that period of days shall be computed by excluding the day on which time begins to run;

            (b)        except as provided below the words and expressions listed in section 2 of Lloyd’s Act 1982 are to be construed according to the definitions there ascribed to them, which shall be deemed to be applicable for the purposes of this byelaw;

            (c)        “Chairman of Lloyd’s” has the meaning ascribed to it in section 4 of Lloyd’s Act 1982;

                          “member’s agent” means an underwriting agent which is listed on any part of the Register of Underwriting Agents at Lloyd’s as a member’s agent;

                          “Membership Committee” means the Membership Committee [ . . . ] constituted pursuant to the byelaw entitled “Quorums and Appointment of Committees and Sub-Committees”;

                          “year” means calendar year.

NOTE

  2. The Interpretation Act 1978 shall extend to and be applicable to this byelaw, which shall be deemed to be “subordinate legislation” within the meaning of that Act.  3. The Council shall compile, keep and maintain a Register in accordance with Schedule 1 to Lloyd’s Act 1982, which shall be divided into two parts and which shall show:—

            (a)        in Part I the names of all those members of the Society classified as working members of the Society as at the relevant date; and

            (b)        in Part II the names of all those members of the Society classified as external members of the Society as at the relevant date,

and references in this byelaw to a member’s classification shall be to his classification on the Register as a working or external member of the Society.  4. The Register shall be available for inspection during normal working hours by a member of the Society upon request at such part of the premises of the Society in the City of London or such other place as the Council shall specify.  5. Within twenty-eight days of a written request from the Council, a Lloyd’s broker or an underwriting agent shall supply the names of, and such other details as the Council may request in respect of, those individuals who are, or immediately before their retirement were, in the employ of such Lloyd’s broker or such underwriting agent and who are working members of the Society.  6.[(a)] The Council, from the information available to it, shall revise the Register [at each of the dates in each year referred to in sub-paragraph (b)]:—

            (a)        by transferring the name of a member of the Society from one part of the Register to the other; and

            (b)        by adding to or deleting from the Register the name of a person who is admitted as, or who ceases to be, a member of the Society;

as circumstances may require.

  [(b) The dates referred to in sub-paragraph (a) are:

            (i)         1 January;

            (ii)         1 July;

            (iii)        such other date or dates as the Council may from time to time prescribe (whether for the purpose of a proposed notice of election of members of the Council under the Council and Committee Byelaw (No. 18 of 1996, 521) or otherwise).]

NOTE

  7. (a) By the end of February in each year, a member of the Society may object to his or another member’s classification by lodging with the Secretary General or other person duly authorised by the Council a notice in writing and a statement of the grounds for his objection. Any objection shall be by reference to the facts existing as at the 1st January immediately preceding the objection. If the member is objecting to another member’s classification, the Secretary General or other person duly authorised by the Council shall, upon receipt of a notice under this paragraph, serve upon the other member a copy of the notice and statement. Within twenty-eight days of receipt of the copy of the notice and statement the other member shall be entitled to lodge with the Secretary General or other person duly authorised by the Council a reply to any of the matters contained in the statement.

  (b) Within forty-two days of receipt of a notice and statement, or of receipt of any reply thereto, lodged under sub-paragraph (a) of this paragraph, the Membership Committee shall consider and determine the objection and shall notify in writing:—

            (i)         the member of the Society whose classification is the subject of the objection and his member’s agent; and

            (ii)         if another member of the Society initiated the objection, that other member,

of its determination thereon and of the right to appeal in accordance with this byelaw and shall, if the determination so requires, direct that the Register be amended.

  (c) The Membership Committee may consider and determine the objection solely on the basis of the notice and statement and any reply thereto lodged under sub-paragraph (a) of this paragraph.  8. (a) Where the Membership Committee has determined that an objection made under paragraph 7 of this byelaw be upheld only the member of the Society whose classification is the subject of the objection may appeal against that determination, and where the Membership Committee has determined that such an objection be rejected only the member who has initiated the objection may appeal.

  (b) There shall be a committee to hear appeals from a determination by the Membership Committee under this byelaw which shall consist of one working member, one external member and one nominated member of the Council to be appointed from time to time by the Chairman of Lloyd’s, and such body is referred to in this byelaw as the “Classification Appeals Committee”.  9. (a) An appeal under this byelaw shall be made by the member of the Society (“the Appellant”) lodging with the Classification Appeals Committee within fourteen days of the receipt by the Appellant of the determination of the Membership Committee:—

            (i)         a notice that the Appellant appeals against the determination of the Membership Committee and the grounds for such appeal; and

            (ii)         particulars of any evidence upon which it is sought to rely.

  (b) If the Appellant is appealing against a determination of the Membership Committee on an objection initiated by or relating to the classification of another member of the Society (in this paragraph referred to as “the Respondent”), the Classification Appeals Committee shall upon receipt of the notice and other documents required under sub-paragraph (a) of this paragraph serve copies of the notice and other documents upon the Respondent.

  (c) Within twenty-eight days of the date of the service upon him of the copies of the notice and other documents under sub-paragraph (b) of this paragraph, the Respondent may lodge with the Classification Appeals Committee a reply to any of the matters contained in the notice and any other documents and particulars of any evidence upon which it is sought to rely.

   (d) An appeal shall be by way of hearing on documents, save that, if upon application the Classification Appeals Committee shall in its discretion so allow, the Appellant and, where there is a Respondent, the Respondent shall be entitled to an oral hearing before the Classification Appeals Committee and may be represented at that hearing by his member’s agent or another person of his choice.

  (e) Subject to sub-paragraph (d) above, the Classification Appeals Committee may conduct the hearing in such manner and at such time as it considers appropriate and may proceed with the hearing notwithstanding the failure by the Appellant or the Respondent to attend.

  (f) The Classification Appeals Committee shall within seven days of the hearing give to the Appellant and, where there is a Respondent, the Respondent written notice of its decision (but without being obliged to give any reason therefor) and shall, if the case so requires, direct that the Register be amended.

  (g) No appeal shall lie from a decision of the Classification Appeals Committee.

  10. (a) The Membership Committee may hear and determine all objections to the classification of a member of the Society at the same time.

  (b) The Classification Appeals Committee may upon its own motion consolidate and hear together all appeals against the determination of the Membership Committee as to the classification of a member of the Society.  11. The Membership Committee or the Classification Appeals Committee, as the case may be, may upon application, or on its own motion, extend or abridge as it thinks fit any time limit specified in this byelaw.  12. [Deleted on 6 January 1993 by Byelaw No. 1 of 1993.]  13. Any election to the Council shall not be challenged or otherwise declared to be invalid by reason of any process of objection or any appeal under paragraph 7 or 9 respectively of this byelaw not being determined or completed or for any other reason relating to the classification of a member of the Society.

101. The Underwriting Agents Byelaw

No. 4 of 1984, 14 May 1984

COMMENCEMENT

  This byelaw commenced on 14 May 1984.

AMENDMENTS

  This byelaw was amended by

Underwriting Agents (Amendment) Byelaw (No. 8 of 1987)

Underwriting Agents (Amendment No. 2) Byelaw (No. 4 of 1988)

Lloyd’s Market Certificate Byelaw (No. 6 of 1989)

Underwriting Agents (Amendment No. 3) Byelaw (No. 9 of 1989)

Underwriting Agents (Amendment No. 4) Byelaw (No. 14 of 1989)

Underwriting Agents (Amendment No. 5) Byelaw (No. 18 of 1989)

Underwriting Agents (Amendment No. 6) Byelaw (No. 4 of 1990)

Miscellaneous Administrative Provisions (Amendment No. 2) Byelaw (No. 1 of 1993)

Underwriting Agents (Amendment No. 7) Byelaw (No. 7 of 1993)

Annual Subscribers, Associates, Substitutes and Others Byelaw (No. 8 of 1993)

Information and Confidentiality Byelaw (No. 21 of 1993)

Underwriting Agents’ Qualifications (Miscellaneous Amendments) Byelaw (No. 32 of 1993)

Transitional and Conversion Arrangements (Corporate Member) Byelaw (No. 9 of 1994)

Underwriting Agents (Amendment No. 8) Byelaw (No. 13 of 1994)

Companies’ Accounts (Miscellaneous Amendments) Byelaw (No. 15 of 1994)

Syndicate Accounting Byelaw (No. 18 of 1994)

Underwriting Agents (Amendment No. 9) Byelaw (No. 3 of 1995)

Underwriting Agents (Amendment No. 10) Byelaw (No. 8 of 1995)

Underwriting Agents (Amendment No. 11) Byelaw (No. 15 of 1995)

Appeal Tribunal Byelaw (No. 18 of 1995)

Underwriting Agents (Amendment No. 12) Byelaw (No. 5 of 1996)

Conversion and Related Arrangements Byelaw (No. 22 of 1996).

Underwriting Agents (Amendment No. 13) Byelaw (No. 36 of 1996)

Underwriting Agents (Amendment No. 14) Byelaw (No. 20 of 1997)

Underwriting Agents (Amendment No. 15) Byelaw (No. 14 of 1998)

Captive Corporate Members Byelaw (No. 19 of 1998)

Premiums Trust Fund and Regulating Trustee Byelaw (No. 22 of 1998)

Training and Development Byelaw (No. 23 of 1998)

Proportional Reinsurance Syndicates Byelaw (No. 9 of 1999, 347)

Underwriting Agents (Amendment No. 16) Byelaw (No. 15 of 1999)

Revocation Byelaw (No. 16 of 1999)

Run-Off Years of Account (Revocation) Byelaw (No. 1 of 2000)

Lloyd’s Policy Signing Office Byelaw (No. 11 of 2000)

Lloyd’s Claims Byelaw (No. 12 of 2000)

Annual Subscribers Byelaw (No. 15 of 2000)

Lloyd’s Brokers Byelaw (No. 17 of 2000)

Underwriting Agents (Amendment No. 17) Byelaw (No. 2 of 2001)

Amendment Byelaw (No. 9 of 2001).

PART A—DEFINITIONS

PART B—REGISTRATION, RENEWAL AND WITHDRAWAL OF REGISTRATION

Registration

Clearance notification

Renewal and withdrawal of registration

PART C—RULES FOR UNDERWRITING AGENTS

Section I—Ownership and Control

  Managing Agents

Companies limited by shares registered under the Companies Acts

Companies registered under the Companies Acts (other than companies limited by shares)

General partnerships

Limited partnerships

  Members’ Agents

Companies limited by shares registered under the Companies Acts

Companies registered under the Companies Acts (other than companies limited by shares)

General partnerships

Limited partnerships

Section II—Operation

  Managing Agents

All Underwriting Agents

Section III—Miscellaneous

  All Underwriting Agents

Consent to, and notification of, changes

Accounts and financial statements

The Committee’s power to obtain information

  Substitute agents

  EEC underwriting agents

[Section IV—Audit

  All Underwriting Agents][Section V—Financial Resources

  All Underwriting Agents

    Financial Resources]

NOTE ON AMENDMENTS

  Byelaw No. 8 of 1987 amended this byelaw with the following words:

            “(a)       the registration of bodies as underwriting agents and the renewal and withdrawal of such registrations shall be under the control of the Council and accordingly all references to the Committee shall be construed as references to the Council provided that where any part of the procedure for the registration, or renewal or withdrawal of such registration, of a body as an underwriting agent has been performed by the Committee then the Council need not repeat the performance of such part of the procedure;”.

  Byelaw No. 15 of 1987 amended paragraphs 1(a) and 16(c)(iii) of this byelaw and stated that in so far as this byelaw applied to premium income in the calendar year 1987, the Committee would, until 31 December 1988 and where it appears expedient, exercise its powers under paragraph 16(e) of this byelaw as if the amendments to paragraphs 1(a) and 16(c)(iii) had not been made.

  Byelaw No. 14 of 1989 amended paragraph 56(b)(ii), (iii) and inserted (iv), and amended paragraph 61(c)(ii), such amendments to come into force on 1 July 1991 and which would apply to all accounts and financial statements which are delivered after that date and which have been prepared up to a date on or after 30 June 1991.

  Byelaw No. 4 of 1990 states that the requirement in paragraph 53(a)(i) of this byelaw shall not apply to any change in the articles of association of an underwriting agent being a company registered under the Companies Acts, which is made solely in consequence of the provisions of this byelaw or byelaw No. 18 of 1989.

Part A—Definitions

  1. (a) In this byelaw, the following expressions have the following meanings, unless the context otherwise requires:

“the Act” means Lloyd’s Act 1982

[“active underwriter” means, in relation to a syndicate, the person at or deemed by the Council or Committee to be at, the underwriting box with principal authority to accept risks on behalf of the members of the syndicate]

NOTE

[“approved transfer agreement” has the meaning given in the Transitional and Conversion Arrangements (Corporate Member) Byelaw (No. 9 of 1994)]

NOTE

“arrangement” includes any agreement or arrangement whether or not intended to be enforceable by legal proceedings and whether or not evidenced in writing

[“associate”, in relation to any person, means that person’s wife, husband, minor child, minor step-child, any body corporate of which that person is a director, any employee or partner of that person and, if that person is a body corporate, any subsidiary of that body corporate and any employee of any such subsidiary]

NOTE

“associated with a Lloyd’s broker” has the meaning in sections 11(2) and 11(3) of the Act and for the purposes of this definition, “Lloyd’s broker” has the meaning ascribed to it in section 12(1)(b) of the Act

“associated with a managing agent” has the meaning in section 10(2) of the Act

“body” means any firm, partnership, corporation, association, or other body of persons (whether corporate or unincorporate)

“byelaw 87” means byelaw 87 made on 18 November 1970 pursuant to Lloyd’s Acts 1871 to 1951

[“captive corporate member” has the meaning given in the Schedule to the Membership Byelaw (No. 17 of 1993, 111);

“captive syndicate” has the meaning given in the Schedule to the Membership Byelaw (No. 17 of 1993, 111);]

NOTE

“clearance notification” means a notification given by the Committee pursuant to paragraph 10 of this byelaw

“the Companies Acts” means one or more of the Companies Act 1862, the Companies (Consolidation) Act 1908, the Companies Act 1929, the Companies Acts 1948 to 1983 [and the Companies Act 1985]

NOTE

[“compliance officer” means the person appointed by an underwriting agent in accordance with paragraph 52A of this byelaw;]

NOTE

“constitution” means the memorandum of association, articles of association, deed, articles, agreement and other instrument from time to time constituting, regulating or defining the powers of a body

[“corporate adviser” means a members’ agent, as described in paragraph (iii) of the definition of “members’ agent”, and which is designated a corporate adviser or, where the context so admits, a body applying to be permitted by the Committee to act solely as a corporate adviser;

“corporate member” has the meaning given in the Membership Byelaw (No. 17 of 1993, 111);]

NOTE

“general partnership” means a partnership (other than a limited partnership) to which the Partnership Act 1890 applies

[“group company insurance business” has the meaning given in the Schedule to the Membership Byelaw (No. 17 of 1993, 111)];

NOTE

[“host syndicate” means a syndicate through which one or more members underwrite insurance business at Lloyd’s and which is reinsured by the members of a proportional reinsurance syndicate;]

NOTE

“interest” means:

            (i)         in relation to a company registered under the Companies Acts, any interest of any kind whatsoever in a share in such a company (disregarding any restraints or restrictions to which the exercise of any right attached to the interest in the share is, or may be, subject) and without limiting the meaning of “interest”, a person shall be taken to have an interest in a share if:

            (a)        he enters into a contract for its purchase by him (whether for cash or other consideration); or

            (b)        not being the registered holder, he is entitled to exercise any right conferred by the holding of that share or is entitled to control the exercise or non-exercise of any such right; or

            (c)        he has a right to call for delivery of the share to himself or to his order; or

            (d)        he has a right to acquire an interest in a share or is under an obligation to take an interest in a share,

                        whether in any case the contract, right or obligation is absolute or conditional, legally enforceable or not and evidenced in writing or not, and it shall be immaterial that a share in which a person has an interest is unidentifiable

            (ii)         in relation to a partnership share or a partnership, means any interest or right to participate, whether legally enforceable or not and whether actual, prospective or contingent, in that partnership share or in any profits or assets of that partnership, whether or not the right or interest is evidenced in writing

“limited partner” has the meaning in section 4 of the Limited Partnerships Act 1907

“limited partnership” means a partnership registered under the Limited Partnerships Act 1907

“managing agent” means an underwriting agent which performs for an underwriting member 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

or, if the context requires, a body applying to be permitted by the Committee to perform one or more of such functions

[“managing agent’s trustee” means, in regard to a managing agent, any trustee of one or more premiums trust deeds designated under the terms of that deed or those deeds as a or the managing agent’s trustee in respect of that managing agent;]

NOTE

[“member’s syndicate premium limit” has the meaning given in paragraph 1(a) of the Syndicate Premium Income Byelaw (No. 6 of 1984, 201)]

NOTE

“members’ agent” means an underwriting agent which:

            (i)         acts on behalf of an underwriting member in accordance with a direct contractual relationship with that underwriting member in respect of that underwriting member’s business at Lloyd’s but does not (or to the extent that it does not) perform any of the functions of a managing agent [(but this shall not prevent a members’ agent from acting as the underwriting agent through whom a transferor underwrites an approved transfer agreement)]; or

            (ii)         if the context requires, a body applying to be permitted by the Committee to act pursuant to such a contractual relationship [[; or

            (iii)        acts solely on behalf of a corporate member in accordance with the requirements of the Council and each such members’ agent shall be designated “corporate adviser”; or

            (iv)        if the context requires, a body applying to be permitted by the Committee to act solely as a corporate adviser.]]

NOTE

[“notifiable event” has the meaning, in regard to a managing agent’s trustee, given in the premiums trust deed or deeds for the purposes of which that trustee has been designated as a or the managing agent’s trustee;]

NOTE

[“notifiable holding” means voting rights or shares which, if acquired by any person, will result in his becoming a 10 per cent controller, a 20 per cent controller, a 33 per cent controller, a 50 per cent controller or a majority controller;]

NOTE

“partner” includes a general partner (as defined in section 3 of the Limited Partnerships Act 1907) but not a limited partner

“partnership” means a general partnership or a limited partnership, as the case may be

“partnership share” means the rights and interest of a partner or a limited partner, as the case may be, in an underwriting agent which is a partnership

[“premiums trust deed” has the meaning given in paragraph 1 of the Schedule to the Membership Byelaw (No. 17 of 1993, 111);

“premiums trust fund” has the meaning given in paragraph 1 of the Schedule to the Membership Byelaw (No. 17 of 1993, 111);]

NOTE

[“proportional reinsurance contract” has the meaning given in the Proportional Reinsurance Syndicates Byelaw (No. 9 of 1999, 347);

“proportional reinsurance syndicate” has the meaning given in the Proportional Reinsurance Syndicates Byelaw (No. 9 of 1999, 347);

“PRS Manager” means an underwriting agent which performs for an underwriting member the service of underwriting a proportional reinsurance contract, managing a proportional reinsurance syndicate and such other services as are ancillary thereto or, if the context so requires, a body applying to be permitted by the Committee to perform one or more of such functions;]

NOTE

  […]

NOTE

  […]

NOTE

“register” means the register of underwriting agents referred to in paragraph 3 of this byelaw

[“reinsurance to close” has the meaning given in Schedule 1 to the Syndicate Accounting Byelaw (No. [18 of 1994, 326])

“run-off account” has the meaning given in paragraph 1 to the Syndicate Accounting Byelaw (No. [18 of 1994, 326])

“run-off manager” means, in relation to a run-off syndicate, the person who has principal authority to negotiate or place contracts of reinsurance or negotiate and settle the payment of claims on contracts of insurance or reinsurance on behalf of the members of the syndicate

“run-off syndicate” means a syndicate which no longer accepts new or renewal insurance business (other than the variation or extension of risks previously underwritten, or reinsurance to close an earlier year of account of that syndicate)]

NOTE

“share” in relation to a company registered under the Companies Acts, includes stock

“substitute agent” means a body appointed in accordance with the byelaw entitled “Substitute Agents” (No. 20 of 1983, 300)

[“syndicate” means an underwriting member or group of underwriting members of Lloyd’s underwriting insurance business at Lloyd’s through the agency of a Lloyd’s underwriting agent to which member or group a particular syndicate number is assigned by the Council;]

NOTE

“syndicate allocated capacity” has the meaning given in paragraph 1(a) of the Syndicate Premium Income Byelaw (No. 6 of 1984, 201)]

NOTE

[“transferor” has the meaning given in relation to an approved transfer agreement in the [[Conversion and Related Arrangements Byelaw (No. 22 of 1996, 329)]]

NOTE

[“underwriting agent means—

            (i)         a managing agent;

            (ii)         a members’ agent;

            (iii)        a PRS manager; or

            (iv)        a person who acts in two or all of the capacities of managing agent, members’ agent and PRS manager,

  and includes, where the context so requires, a body applying to be permitted by the Committee to act as one of the above;]

 

NOTE

  (b) In paragraphs [. . .], 34(d), [. . .] and 49(d), “person”, when applied to a body corporate, a general partnership or a limited partnership has the meaning given to “that person” in section 12(1)(c), (e) and (f) or section 12(1)(d) to (f) of the Act, as the case may be, and when applied to an individual has the meaning given to “that individual” in section 12(1)(e) of the Act (but excluding the proviso to that section).

  [(c)(i) In this byelaw and in any conditions and requirements prescribed under this byelaw, except where it is expressly otherwise provided the several groups of underwriting members to which in different years a particular syndicate number is assigned by or under the authority of the Committee shall be treated as the same syndicate, notwithstanding that they may not comprise the same underwriting members with the same individual participations.

  (ii) Where a managing agent manages two or more syndicates which comprise the same members with the same individual participations, those syndicates may for the purposes of any conditions and requirements prescribed under this byelaw be grouped together and treated as a single syndicate.

  (d) For the purposes of this byelaw a year of account of a syndicate shall be treated as being closed at the time as from which reinsurance to close that year of account takes effect; and a year of account shall be treated as open until it is closed.

  (e) In paragraph 54, references to the accounts of underwriting agents or their ultimate holding companies being such as they are required to deliver to the registrar of companies or are required by law to prepare shall be construed without reference to sections 246 to 249 inclusive of the Companies Act 1985.]

NOTE

  The deletions from sub-paragraph (b) were made on 6 September 1995 by byelaw No. 15 of 1995 with effect from 10 September 1995.

  [(f) In this byelaw, “[[…]] controller” means:

            […]

            (ii)         in relation to a partnership—

            (aa)      any person in accordance with whose directions or instructions, either alone or with those of any associate or associates, the partners are accustomed to act (but disregarding advice given in a professional capacity); and

            (bb)      any person who, either alone or with any associate or associates, is entitled to exercise, or control the exercise of [[10]] per cent or more of the voting power at any meeting of the partners;

            (cc)       any person who, either alone or with any associate or associates, would, if the whole of the partnership profits were in fact distributed among the partners entitle him to receive [[10]] per cent or more of the amount so distributed;

            (dd)      any person who, either alone or with any associate or associates, has such rights as would, in the event of a winding up of the partnership or in any other circumstance, entitle him to receive [[10]] per cent or more of partnership’s assets available for distribution among partners [[; and “control” shall be construed accordingly.]]

NOTE

  (g) […]

NOTE

  (h) For the purposes of sub-paragraph (f)—

            (i)         “associate”, in relation to any person, means that person’s wife, husband or minor child or step-child, any body corporate of which that person is a director, any person who is an employee or partner of that person and, if that person is a body corporate, any subsidiary undertaking of that body corporate and any employee of any such subsidiary undertaking; and

            (ii)         “subsidiary undertaking” and “parent undertaking” have the respective meanings given in section 258 of the Companies Act 1985.

  (i) In this byelaw [:

“10 per cent controller” means a controller in whose case the percentage referred to in sub-paragraph (f) above is 10 or more but less than 20;

“20 per cent controller” means a controller in whose case the percentage is 20 or more but less than 33;

“33 per cent controller” means a controller in whose case the percentage is 33 or more but less than 50;

“50 per cent controller” means a controller in whose case that percentage is 50;

“majority controller” means a controller whose share holding is such that the body corporate is his subsidiary undertaking.]

NOTE

  (j) In this byelaw, “connected company” means, in relation to an underwriting agent, any person who is controlled by or is under common control with that under-writing agent.]

NOTE

Part B—Registration, renewal and withdrawal of registration [Review]

Registration [and review of registration]

  2. The registration of bodies as underwriting agents and the renewal [review] and withdrawal of such registrations shall be under the control of the Committee.

NOTE

  3. The Committee shall maintain a register of all underwriting agents for the time being permitted to act under this byelaw. [The register shall specify:

            (a)        the capacity or capacities in which an underwriting agent is permitted to act;

 

 

 

 

 

 

            (b)        in the case of a managing agent, the syndicates which that managing agent is permitted to manage;

            (c)        in the case of a PRS manager, the proportional reinsurance syndicates which that PRS manager is permitted to manage; and

            (d)        such other matters as the Committee may from time to time determine.]

NOTE

  4. [(a) Subject to paragraph 58 of this byelaw:

            (i)         no person may act as a managing agent, a members’ agent or a PRS manager unless it is a body registered as such under this byelaw;

            (ii)         no person may manage a syndicate other than a proportional reinsurance syndicate unless it is a managing agent permitted to manage that syndicate under this byelaw;

            (iii)        no person may manage a proportional reinsurance syndicate unless it is a PRS manager permitted to manage that proportional reinsurance syndicate under this byelaw.]

NOTE

  [(b)] The procedures for registration under byelaw 87 shall cease to have effect on the date of this byelaw. Any approval given to an underwriting agent under byelaw 87 shall automatically lapse on the registration of that underwriting agent under this byelaw or at the close of business on 22 July 1987, whichever is the earlier. Byelaw 87 (so far as previously unrevoked) is hereby revoked with effect from 22 July 1987.

NOTE

  5. Any body wishing to act as an underwriting agent [ . . . ] may apply to the Committee for its name to be entered in the register. Applications shall be made in accordance with such procedures and shall be accompanied by such documents and information as the Committee may from time to time determine. Applicants shall pay fees in accordance with such scale of charges as may from time to time be laid down by the Committee.

NOTE

  6. (a) The Committee shall have power to:

            (i)         consider applications for entry in the register and applications for renewal of any such entry;

            [(ii)        grant permission to bodies to act:

            (aa)      as a managing agent;

            (bb)      as a members’ agent;

            (cc)       as a PRS manager; or

            (dd)      in two or all of the capacities of managing agent, members’ agent and PRS manager;

                        and to grant permissions to a managing agent to manage specific syndicates and permissions to a PRS manager to manage specific proportional reinsurance syndicates;

            (iii)        on such grant, cause to be entered in the register the names of such underwriting agents and, where applicable, the identities of the syndicates which a managing agent is permitted to manage and any other matters which the Committee may determine in accordance with paragraph 3 of this byelaw;]

NOTE

            [(iiia)     conduct a review of any permission granted to any body [[to act as a managing agent, as a members’ agent, as a PRS manager or in two or all of such capacities, or to manage a specific syndicate or proportional reinsurance syndicate,]] in order to determine whether such agent continues [[[, or would (following any act or matter in respect of which the Council’s clearance, agreement, permission or consent is being sought whether under this byelaw or any other) continue,]]] to qualify for registration pursuant to paragraph 8 of this byelaw and whether grounds exist or may exist which would or might justify the exercise of any power granted to the Council by paragraph 9 or 11 of this byelaw and in connection with any such review, the Council shall (in addition to its powers under paragraph 57 of this byelaw) have power to require the underwriting agent

            (aa)      to provide such documents and information as the Council may from time to time determine, and

            (bb)      to comply with such requirements as the Council may from time to time determine relating to the procedures to be adopted for conducting any such review;]

            (iv)        give clearance notifications in accordance with paragraph 10 of this byelaw; and

            (v)        withdraw permissions to act in accordance with paragraph 11 of this byelaw.

  (b) Any permission granted under this byelaw shall be either for a specific period or expressed to be for an indefinite period of time. In the case of any permission for an indefinite period of time, the Committee shall have power (but without prejudice to the Committee’s power to withdraw any such permission at any time[, and whether or not as a consequence of any review]) at any time to decide that the permission shall expire on a specified date being not less than [[[[six months]]]] from such decision. Notice of such decision shall be given to the underwriting agent within 14 days thereof.

NOTES

 

  7. [Deleted on 6 January 1993 by Byelaw No. 1 of 1993.]

  8. [No body shall be registered as a managing agent, as a members’ agent, as a PRS manager or in two or all of such capacities, or be granted permission to manage a specific syndicate or proportional reinsurance syndicate, and no such registration or permission shall be renewed unless the Committee is satisfied that:]

            (a)        the constitution of the body is in form and substance acceptable to the Committee so as to enable the underwriting agent at all times to comply, and, where appropriate in the opinion of the Committee, to procure compliance, with the requirements and intent of Section I of Part C of this byelaw as from time to time amended and any other byelaw or regulation for the time being in force and applicable to it;

NOTE

            (b)        the body complies with the requirements and intent of Sections I and II of Part C of this byelaw as from time to time amended and any other byelaw or regulation for the time being in force and applicable to it; […]

            [(ba)     without prejudice to paragraph 14 of this byelaw, [[[there is no subsisting arrangement to which paragraph 8A, 8AA or 8AAA of this byelaw applies;]]] and which affects the body [[other than an arrangement in respect of which the Council has given its prior written consent]];] […]

NOTE

  The words in double square brackets were added with effect from 7 February 1996 by byelaw No. 5 of 1996. Those in treble square brackets were inserted with effect from 9 June 1999 by byelaw No. 9 of 1999, 347, dated 12 May 1999.

            [(bb)     the body possesses and maintains such financial resources as the Council may from time to time prescribe under paragraph 66 of this byelaw; and]

NOTE

            [(bba)   the body complies or will comply with the provisions of the Financial Services and Markets Act 2000 and any rule, direction, requirement, principle, evidential provision, code or guidance made given or issued by the Financial Services Authority applicable to the body if it is so registered or permission is granted or if such registration or permission is renewed; and]

NOTE

            [(bc)     in the case of a managing agent:

            (i)         the name, reputation or standing of the Society and of its members;

            (ii)         the general rating or ratings of the Lloyd’s market applying to policies of insurance underwritten by members of the Society; and

            (iii)        the authorisation of members of the Society to conduct insurance business overseas

                        neither are nor have been nor are at any time likely to be unduly adversely affected by the past, present or future underwriting performance of any syndicate while managed by that managing agent; and]

NOTE

            (c)        the body is fit and proper to be a managing agent [[a members’ agent, a PRS manager or to act in two or all of such capacities (as the case may be), or to be granted permission to manage a specific syndicate or proportional reinsurance syndicate. In deciding whether a body is fit and proper to be an underwriting agent of the relevant category or to manage a specific syndicate or proportional reinsurance syndicate, the Committee shall have regard to the following criteria:]]

NOTES

            (i)         the [character and] suitability of the directors (both individually and collectively) for the time being of, or the partners (both individually and collectively) for the time being in, the underwriting agent;

NOTE

            [(ia)      the character and suitability of the compliance officer for the time being of the underwriting agent;]

NOTE

            [(ib)      [[[in the case of a managing agent and a members’ agent,]]] the compliance of each director, compliance officer and active underwriter [[and other persons with requirements made under the Training and Development Byelaw (No. 23 of 1998, 343)]] and requirements made thereunder; and]

NOTE

[…]

NOTE

            [(ic)       in the case of a PRS manager, the compliance of each director, compliance officer, other employee and any person retained by the PRS manager to carry out any of the functions in subparagraph 8(c)(x)(C) of the Training and Development Byelaw (No. 23 of 1998, 343) and the requirements made thereunder;]

NOTE

            (iii)        in the case of a managing agent, the nature and number of the syndicates which that managing agent is seeking permission to manage;

 

            [(iiia)     in the case of a body seeking permission to manage a specific syndicate which at the time of application for such permission is managed by another body, the first-mentioned body’s ability to manage, should it become necessary, any years of account of such syndicates which have not been closed by reinsurance to close (including any run-off accounts of such syndicates);] and

NOTE

            [(iiib)     in the case of a PRS manager, the nature and number of the proportional reinsurance syndicates which that PRS manager is seeking permission to manage;]

NOTE

            (iv)        in the case of a managing agent, the [character and] suitability of the active underwriter of [[each syndicate which that managing agent manages or (as the case may be) is seeking permission to manage]];

NOTES

            [(iva)     in the case of a managing agent [[or PRS manager]], the character and suitability of the run-off manager of any run-off syndicate which that managing agent [[or PRS manager]] manages or (as the case may be) is seeking permission to manage;]

NOTE

            [(ivb)     the reputation, financial standing, character and suitability of any person who controls the underwriting agent;

            (ivc)      the reputation and financial standing of any connected company of the underwriting agent;]

NOTE

            (v)        the underwriting agent’s ability to supervise and service all of its activities and responsibilities and to be fully and properly accountable for those activities;

            (vi)        the location, adequacy and suitability of the staff of the underwriting agent;

            (vii)       the location of the books and other records of the underwriting agent relating to the conduct of its business at Lloyd’s;

            (viii)      conformity with such requirements as the Committee may from time to time stipulate with regard to errors and omissions insurance;

            (ix)        [the underwriting agent’s record of compliance (if any) with this byelaw and with the Core Principles for Underwriting Agents set out in Schedule 2 to the Core Principles Byelaw (No. 34 of 1996, 420) and any codes of practice relating to the Core Principles for Underwriting Agents and any other byelaw, regulation or requirement of the Council;]

NOTE

            [(ixa)     any condition imposed under paragraph 9; and]

NOTE

            (x)        any other matters which in the opinion of the Committee should be taken into account in deciding whether a body is fit and proper to be a managing agent [[[, a members’ agent, a PRS manager or to act in two or all of such capacities (as the case may be), or to manage or to continue to manage (as the case may be) specific syndicates or proportional reinsurance syndicates]]]

                        [and may have regard to the character and suitability of any manager of the underwriting agent, or any other person who works for the underwriting agent whether [[under a contract of service or for services or otherwise]] and

            (A)        in the case of a members’ agent is a person whose functions include advising underwriting members on whose behalf that members’ agent acts or is a person who has authority to effect or arrange the effecting of investment transactions on behalf of such members;

            (B)        in the case of a managing agent is a person who has authority to accept risks or negotiate or place contracts of reinsurance on behalf of the members of a syndicate managed by that managing agent or negotiate and settle the payment of claims on such contracts or effect or arrange the effecting of investment transactions on behalf of such members] [[[;

            (C)        in the case of a PRS manager is a person who has authority to accept risks or negotiate or place contracts of reinsurance on behalf of the members of a proportional reinsurance syndicate managed by that PRS manager and to assess and negotiate settlement amounts in respect of the commutation of liabilities under such contracts and negotiate and settle the payment of claims on such contracts and to effect or arrange the effecting of investment transactions on behalf of such members.]]]

NOTES

            [8A.      (a)The arrangements to which paragraph 8 (ba) applies are:

            (i)         subject to sub-paragraph (b) below, any arrangement the purpose or effect of which is to place any member of a Lloyd’s broker grouping in a position in which it is able to influence the conduct of the business of a managing agent including, but without limitation, any agreement or other arrangement with any of the shareholders or members of a managing agent, or any other person, under which a member of a Lloyd’s broker grouping has the power to control to any extent:

            (A)        the appointment or removal of any director of a managing agent;

            (B)        the exercise of any voting rights in a managing agent; or

            (C)        the conduct of the business of a managing agent by the directors or partners of the managing agent;

            (ii)         subject to sub-paragraph (b) below, any arrangement the purpose or effect of which is to place any member of a managing agent grouping in a position in which it is able to influence the conduct of the business of a Lloyd’s broker including, but without limitation, any agreement or other arrangement with any of the shareholders or members of a Lloyd’s broker, or any other person, under which a member of a managing agent grouping has the power to control to any extent:

            (A)        the appointment or removal of any director of a Lloyd’s broker;

            (B)        the exercise of any voting rights in a Lloyd’s broker; or

            (C)        the conduct of the business of a Lloyd’s broker by the directors or partners of the Lloyd’s broker; and

            (iii)        subject to sub-paragraph (c) below, any arrangement under which:

            (A)        a member of a managing agent grouping has a right to receive, or an expectation of receiving, any amount out of, or calculated by reference to, the general profits or earnings of a Lloyd’s broker including, but without limitation, any amount distributed among its shareholders by a Lloyd’s broker; or

            (B)        a member of a Lloyd’s broker grouping has a right to receive, or an expectation of receiving, any amount out of, or calculated by reference to, the general profits or earnings of a managing agent including but without limitation any amount distributed among its shareholders by a managing agent.

            (b)        Sub-paragraphs (a)(i) and (ii) above do not apply to a normal commercial arrangement that is an arrangement of a nature which may be expected to exist between independent persons dealing at arms length and the implementation of which would not, in the opinion of the Council, be expected to involve:

            (i)         a managing agent in an unacceptable conflict of interest with any underwriting member for whom that managing agent acts as such at Lloyd’s; or

            (ii)         a Lloyd’s broker in an unacceptable conflict of interest with any person for whom he acts as a Lloyd’s broker.

            (c)        Sub-paragraph (a)(iii) above does not apply to any sub-agency agreement between a members’ agent controlled by a Lloyd’s broker and a managing agent under which the managing agent shares in the salary and profit commission to which the members’ agent is entitled (and for this purpose sections 12(1)(e) and 12(2)(c) of the Act shall apply in determining whether a members’ agent is controlled by a Lloyd’s broker).

            (d)        In this paragraph 8A (except sub-paragraphs (b) and (e)):

            (i)         “Lloyd’s broker” has the meaning in section 12(1)(b) of the Act;

            (ii)         sub-paragraphs (A) and (B) of section 12(1)(a) of the Act shall apply to any reference to a “managing agent” (and for this purpose references in sections 12(1)(e) and 12(1)(a) to a managing agent shall be deemed to include the body applying for registration or renewal of registration);

            (iii)        “Lloyd’s broker grouping”, in relation to a Lloyd’s broker, means collectively each of the persons who are deemed to be included within the meaning of the words “that person” when applied to that Lloyd’s broker pursuant to section 12(1)(c) or 12(1)(d) of the Act, as the case may be; and

            (iv)        “managing agent grouping”, in relation to a managing agent, means collectively each of the persons who are deemed to be included within the meaning of the words “that person” when applied to that managing agent pursuant to section 12(1)(c) or 12(1)(d) of the Act, as the case may be.

            (e)        For the purposes of paragraph 8(ba), an arrangement falling within this paragraph affects a body applying for registration or renewal of registration if the body or any person who in relation to the body is treated by sub-paragraph (d)(ii) above as falling within the expression “managing agent”, participates in the arrangement.]

NOTE

[8AA (a) The arrangements to which paragraph 8(ba) applies are:

            (i)         subject to subparagraph (b) below, any arrangement the purpose or effect of which is to place any member of a Lloyd’s broker grouping in a position in which it is able to influence the conduct of the business of a PRS manager including, but without limitation, any agreement or other arrangement with any of the shareholders or members of a PRS manager or any other person, under which a member of a Lloyd’s broker grouping has the power to control to any extent:

            (A)        the appointment or removal of any director of a PRS manager;

            (B)        the exercise of any voting rights in a PRS manager; or

            (C)        the conduct of the business of a PRS manager by the directors or partners of the PRS manager;

            (ii)         subject to subparagraph (b) below, any arrangement the purpose or effect of which is to place any member of a PRS manager grouping in a position in which it is able to influence the conduct of the business of a Lloyd’s broker including, but without limitation, any agreement or other arrangement with any of the shareholders or members of a Lloyd’s broker, or any other person, under which a member of a PRS manager grouping has the power to control to any extent:

            (A)        the appointment or removal of any director of a Lloyd’s broker;

            (B)        the exercise of any voting rights in a Lloyd’s broker; or

            (C)        the conduct of the business of a Lloyd’s broker by the directors or partners of the Lloyd’s broker; and

            (iii)        subject to subparagraph (c) below, any arrangement under which:

            (A)        a member of a PRS manager grouping has a right to receive, or any expectation of receiving, any amount out of, or calculated by reference to, the general profits or earnings of a Lloyd’s broker including, but without limitation, any amount distributed among its shareholders by a Lloyd’s broker; or

            (B)        a member of a Lloyd’s broker grouping has a right to receive, or an expectation of receiving, any amount out of, or calculated by reference to, the general profits or earnings of a PRS manager including but without limitation any amount distributed among its shareholder by a PRS manager.

            (b)        Subparagraphs (a)(i) and (ii) above do not apply to a normal commercial arrangement that is an arrangement of a nature which may be expected to exist between independent persons dealing at arms length and the implementation of which would not, in the opinion of the Committee, be expected to involve:

            (i)         a PRS manager in an unacceptable conflict of interest with any underwriting member for whom that PRS manager acts as such at Lloyd’s; or

            (ii)         a Lloyd’s broker in an unacceptable conflict of interest with any person for whom he acts as a Lloyd’s broker.

 

            (c)        Subparagraph (a)(iii) above does not apply to any subagency agreement between a members’ agent controlled by a Lloyd’s broker and a PRS manager under which the PRS manager shares in the salary and profit commission to which the members’ agent is entitled (and for this purpose sections 12(1)(e) and 12(2)(c) of the Act shall apply in determining whether a members’ agent is controlled by a Lloyd’s broker).

            (d)        In this paragraph 8AA (except subparagraphs (b) and (e)):

            (i)         “Lloyd’s broker” has the meaning given in paragraph 8A(d)(i);

            (ii)         “Lloyd’s broker grouping” has the meaning given in paragraph 8A(d)(iii); and

            (iii)        “PRS manager grouping”, in relation to a PRS manager, means collectively each of the persons who are deemed to be included within the meaning of the words “that person” when applied to that PRS manager pursuant to section 12(1)(c) or 12(1)(d) of the Act, as the case may be.

            (e)        For the purposes of paragraph 8(ba), an arrangement falling within this paragraph affects a PRS manager applying for registration or renewal of registration.

  8AAA (a) The arrangements to which paragraph 8(ba) applies are:

            (i)         subject to subparagraph (b) below, any arrangement the purpose or effect of which is to place any member of a host syndicate managing agent grouping in a position in which it is able to influence the conduct of the business of a PRS manager which is the PRS manager of the proportional reinsurance syndicate reinsuring a member or members of the relevant host syndicate including, but without limitation, any shareholding, agreement or other arrangement with any of the shareholders or members of that PRS manager, or any other person, under which a member of that host syndicate managing agent grouping has the power to control to any extent:

            (A)        the appointment or removal of any director of that PRS manager;

            (B)        the exercise of any voting rights in that PRS manager; or

            (C)        the conduct of the business of that PRS manager by the directors or partners of that PRS manager;

            (ii)         subject to subparagrph (b) below, any arrangement the purpose or effect of which is to place any member of a PRS manager grouping in a position in which it is able to influence the conduct of the business of a managing agent which is the managing agent of the host syndicate reinsured by the members of the relevant proportional reinsurance syndicate including, but without limitation, any shareholding, agreement or other arrangement with any of the shareholders or member of that managing agent or any other person, under which a member of that PRS manager grouping has the power to control to any extent:

            (A)        the appointment or removal of any director of that managing agent;

            (B)        the exercise of any voting rights in that managing agent; or

            (C)        the conduct of the business of that managing agent by the directors or partners of the managing agent;

            (b)        Subparagraphs (a)(i) and (ii) above do not apply to a normal commercial arrangement that is an arrangement of a nature which may be experienced to exist between independent persons dealing at arms length and the implementation of which would not, in the opinion of the Committee, be expected to involve:

            (i)         a PRS manager in an unacceptable conflict of interest with any underwriting member for whom the PRS manager acts as such at Lloyd’s; or

            (ii)         a managing agent in an unacceptable conflict of interest with any person for whom he acts as managing agent.

            (c)        In this paragraph 8AAA (except subparagraphs (b) and (d)):

            (i)         “managing agent grouping” has the meaning given in 8A(d)(iv); and

            (ii)         “PRS manager grouping” has the meaning given in paragraph 8AA(d)(iii).

            (d)        For the purposes of paragraph 8(ba), an arrangement falling within this paragraph affects a PRS manager applying for registration or renewal of registration.]

NOTE

  [8B. In exercising any of the powers and discretions conferred on it under this byelaw the Council may

            (a)        subject to any contrary provision in any other byelaw, have regard to any information in its possession, from whatever source;

            (b)        consult with such persons and in relation to such matters as it may think fit; […]

            [(ba)     establish or appoint such persons, committees, or sub-groups as it may think fit; and]

            (c)        have regard to any business or activities of any body or person, whether at Lloyd’s or elsewhere.]

NOTE

  Subparagraph (ba) was inserted on 6 September 1995 by byelaw No. 15 of 1995 with effect from 10 September 1995.

  [8(C) No body shall act or be granted permission to act as managing agent of a captive syndicate if that body is an associate, controller or a connected company of the captive corporate member which underwrites or which will underwrite (as the case may be) through the captive syndicate.]

NOTE

            [9.        (a)In granting permission to a body to act as an underwriting agent, or to manage specific syndicates [[or proportional reinsurance syndicates]] or after a review of a body’s permission so to act or to manage, [or granting consent to the existence of an arrangement to which paragraph 8A [[, 8AA or 8AAA]] applies,] the Council may impose such conditions as it thinks [[[necessary or appropriate including but not limited to conditions to]]] ensure:

NOTE

            [[(i)       that the body is or will continue to be fit and proper to be a managing agent, a members’ agent, a PRS manager or to act in two or all of such capacities (as the case may be);

            (ii)         that the body is or will continue to be fit and proper to manage or to continue to manage (as the case may be) the specific syndicates or proportional reinsurance syndicates which it manages or is seeking permission to manage;]]

            [(iii)       that no unacceptable conflict of interest arises in relation to a managing agent with any underwriting member for whom that managing agent acts as such at Lloyd’s [[or in relation to a PRS manager with the managing agent of the host syndicate or in relation to a PRS manager with any underwriting member for whom that PRS manager acts as such at Lloyd’s;]]

            (iv)        that no unacceptable conflict of interest arises in relation to a Lloyd’s broker with any person for whom he acts as a Lloyd’s broker;

            (v)]       that the body will or will continue to comply with the requirements of Lloyd’s Acts 1871 to 1982, the byelaws and regulations made under those Acts and any conditions and requirements imposed under any such byelaw or regulation and for the time being applicable to it, and will pay or continue to pay due regard to any codes of practice issued by the Council or the Committee [[[;]]]

            [[[(vi)     that the body will or will continue to comply with the provisions of the Financial Services and Markets Act 2000 and any rule, direction, requirement, principle, evidential provision, code or guidance made given or issued by the Financial Services Authority applicable to the body in its capacity as an underwriting agent]]]

                        and may from time to time add to, alter or withdraw any condition so imposed.

NOTE

                        (b)Without prejudice to the generality of sub-paragraph (a) above, the Council may, as a condition of granting permission to a body to act as an underwriting agent or to manage specific syndicates [[[or proportional reinsurance syndicates]]] or after a review of a [person’s] permission so to act or to manage, [or granting consent to the existence of an arrangement to which paragraph 8A [[[, 8AA or 8AAA]]] applies,] require any [controller of the underwriting agent [[or any of the persons referred to in paragraph 8A]] to execute and deliver or otherwise become a party to such deeds, contracts, bonds, guarantees, undertakings and other documents as the Council may specify (whether generally or in relation to a particular case).

NOTE

                        (ba)Without prejudice to the generality of sub-paragraph (b) above, the Council may require a controller to execute any or all of the following:

            (i)         an undertaking that it will procure that there are no transactions, or no transactions of a class or classes specified in the undertaking involving both members of any syndicate managed by a managing agent [[or any proportional reinsurance syndicate managed by a PRS manager]] and the controller or any connected company;

            (ii)         an undertaking restricting the extent to which the controller or any connected company may directly or indirectly participate in or seek to influence the business of the managing agent [[or PRS manager]] or any decisions of the managing agent [[or PRS manager]] affecting the underwriting policies of any syndicate managed by that agent or the insurance transactions to be concluded or reinsurance programmes to be followed by such a syndicate.]

NOTE

            (c)        Without prejudice to the generality of sub-paragraph (a) above, the Council may as a condition of granting permission to a body to manage specific syndicates [or proportional reinsurance syndicates], require the body to execute such undertakings in such form in relation to such syndicates including without limitation:

            (i)         undertakings […] in relation to any run-off account of such syndicates as may be specified, as if the body were the managing agent [or PRS manager] responsible for the run-off account concerned;

            (ii)         undertakings that it will take such action and perform such services in relation to any years of account of such syndicates which have not been closed by reinsurance to close (including any run-off account of such syndicates),

                        as may be specified.]

NOTE

Clearance notification

  10. (a) Any underwriting agent which proposes to make any arrangement or take any other step (the “proposals”) so as to enable it to comply with all or any of the requirements of paragraphs 8(a) or (b) [or (ba)] of this byelaw and/or satisfy all or any of the criteria specified in paragraph 8(c)(v) to (ix) of this byelaw may, at any time before implementing the proposals, submit full details of the proposals to the Committee. The Committee shall notify the underwriting agent in writing whether the Committee is satisfied that, subject to implementation of the proposals without amendment and fulfilment of any conditions set out in the clearance notification, the underwriting agent will:

            (i)         comply with such of the requirements of paragraph 8(a) and (b) [or (ba)] of this byelaw; and/or

            (ii)         satisfy such of these criteria specified in paragraph 8(c)(v) to (ix) of this byelaw

as are specified in the clearance notification.

  (b) For the purposes of this byelaw, a clearance notification shall be conclusive proof of compliance with all the matters specified therein provided that full details of the proposals have been submitted to the Committee, the proposals are implemented without amendment and any conditions set out in the clearance notification have been fulfilled.

  [(c) Every clearance notification given in accordance with paragraph (a) above shall (if the proposals specified therein have not been implemented) expire three months or such longer period as the Council may specify after the date of the written notification thereof to the underwriting agent.]

NOTE

Renewal and withdrawal of registration

  11. [Subject to the provisions of paragraph 11A of this byelaw and without] prejudice to the powers of the Council or the Committee under any byelaw or regulation for the time being in force:

            (a)        upon expiry of any permission granted under this byelaw, the Committee shall remove the name of the underwriting agent concerned from the appropriate part of the register unless such permission has been renewed by the Committee under this byelaw;

            (b)        the Committee shall withdraw the permission of a managing agent to act as such and shall remove its name from the register if the managing agent ceases to comply with paragraph 14 of this byelaw;

            (c)        the Committee may at any time [and whether or not as a consequence of any review] withdraw the permission of a managing agent [[a members’ agent, a PRS manager or a person acting in two or all of such capacities (as the case may be)]] to act as such (and, on such withdrawal, shall remove its name from the appropriate part of the register) if it:

NOTES

  The second words in square brackets were inserted on 8 June 1988 by byelaw No. 4 of 1988 with effect from 1 July 1988.

  The words in double square brackets were inserted on 14 May 1999 by byelaw No. 9 of 1999, 347, with effect from 6 June 1999.

            (i)         ceases to comply with any of the requirements (other than paragraph 14) applicable to it and contained in Part C of this byelaw as from time to time amended; or

            [(ia)      makes any arrangement to which paragraph 8A [[[, 8AA or 8AAA]]] applies [[other than an arrangement in respect of which the Council has given its prior written consent]]; or]

NOTE

            (ii)         [is not in the opinion of the Committee a body which is fit and proper to be a managing agent, a members’ agent, a PRS manager or to act in two or all of such capacities (as the case may be)];

NOTE

            [(iia)      fails to maintain financial resources in accordance with the requirements prescribed under paragraph 66 of this byelaw; or]

NOTE

            (iii)        [ceases to act as a managing agent, a members’ agent, a PRS manager or in two or all of such capacities (as the case may be) at Lloyd’s;]

NOTE

            [(iiia)     fails to comply with any condition imposed upon it by the Council pursuant to paragraph 9 of this byelaw or with any condition or requirement imposed upon it under the [[Lloyd’s Claims Byelaw (No. 12 of 2000, 528),]] Central Accounting Byelaw (No. 20 of 1998, 525) or the Lloyd’s Policy Signing Office Byelaw (No. 11 of 2000, 527); or]

NOTE

            [(iiib)     fails to comply with the provisions of the Financial Services and Markets Act 2000 or any rule, direction, requirement, principle, evidential provision, code or guidance made given or issued by the Financial Services Authority applicable to it in its capacity as an underwriting agent; or]

NOTE

            (iv)        so requests;

            [(d)       the Council may at any time and whether or not as a consequence of any review withdraw the permission of a managing agent to manage a syndicate (and, on such withdrawal, shall amend the register accordingly) if:

            (i)         the managing agent is not in the opinion of the Council capable of managing that syndicate; or

            (ii)         the managing agent, or any underwriter acting on behalf of that syndicate, is in breach of the Multiple Syndicates Byelaw (No. 5 of 1989) or of a condition of any consent granted thereunder in relation to that syndicate; or

            [[(iia)     if the managing agent fails to comply with the provisions of the Financial Services and Markets Act 2000 or any rule, direction, requirement, principle, evidential provision, code or guidance made given or issued by the Financial Services Authority applicable to it in its capacity as a managing agent]]

            (iii)        the managing agent so requests;]

NOTE

            [(da)     the Council may at any time and whether or not as a consequence of a review withdraw the permission of a PRS manager to manage a proportional reinsurance syndicate (and, on such withdrawal, shall amend the register accordingly) if;

            (i)         the PRS manager is not, in the opinion of the Council, capable of managing that proportional reinsurance syndicate; [[…]]

            [[(ia)     if the PRS manager fails to comply with the provisions of the Financial Services and Markets Act 2000 or any rule, direction, requirement, principle, evidential provision, code or guidance made given or issued by the Financial Services Authority applicable to it in its capacity as a PRS manager; or]]

            (ii)         the PRS manager so requests;]

NOTE

            [(db)     the Council may at any time withdraw the permission of a managing agent to act as such (and, on such withdrawal, shall remove its name from the appropriate part of the register) if the Council considers that:

            (i)         the name, reputation or standing of the Society or of its members;

            (ii)         the general rating or ratings of the Lloyd’s market applying to policies of insurance underwritten by members of the Society; or

            (iii)        the authorisation of members of the Society to conduct insurance business overseas

                        is or has been or is at any time likely to be unduly adversely affected by the past, present or future underwriting performance of any syndicate while managed by that managing agent.]

NOTE

            (e)        where the Committee proposes to withdraw a permission to act under sub-paragraphs (b), (c) [(other than under sub-paragraph (c)(iv)), (d)(i), (da)(i) or (d)(ii) above,] the Committee shall give the underwriting agent concerned notice in writing of the Committee’s intention specifying the reasons why the Committee proposes to act and, before taking any action under any such sub-paragraph, the Committee shall take into account any representations made by or on behalf of the underwriting agent concerned within the period of 14 days beginning with the date of the notice. After taking account of such representations, the Committee shall decide, and shall notify the underwriting agent accordingly, whether to:

NOTE

            (i)         withdraw its permission to act and remove its name from the appropriate part of the register; or

            (ii)         withdraw its permission to manage the syndicate in question and amend the register accordingly; or

            (iii)        take no further action; or

            (iv)        take some other course of action open to it under any byelaw or regulation for the time being in force.

            [11A.    (a)Notwithstanding the provisions of paragraph 11 of this byelaw, the Council may, if it considers that there is good reason to do so:

            (i)         postpone the removal of the name of the underwriting agent from the register for such period as the Council shall specify from time to time or until the Council shall otherwise determine;

            (ii)         in connection with such a postponement at any time and from time to time give such directions as it may think fit, including without limitation:

            (aa)      a direction that the underwriting agent shall not carry on any business or activity, or business or activity of a specified class or description at Lloyd’s;

            (bb)      a direction that the underwriting agent shall not describe or hold itself out as having permission to act as an underwriting agent at Lloyd’s.

            (b)        Where the Council, having under sub-paragraph (a) above retained the name of an underwriting agent on the register, at any time thereafter considers that there is no longer good reason to postpone the removal of the name of the underwriting agent from the register, the Council may, subject to sub-paragraph (c) below, remove the name of the underwriting agent from the register with effect from such time as it may specify (but so that, where the Council has decided to retain the name of the underwriting agent on the register for a specified period, the removal shall not take effect before the expiry of that period).

            (c)        Where the Council proposes to remove the name of an underwriting agent from the register under paragraphs 11(a) or 11(c) (other than under paragraph 11(c)(iv)) of this byelaw, or to withdraw the permission of a managing agent to manage a syndicate under paragraph 11(d) (other than paragraph 11(d)(iii) [[or of a PRS manager to manage a proportional reinsurance syndicate under paragraph 11(da)(i)]]) of this byelaw, or to postpone the removal of the name of an underwriting agent from the register under sub-paragraph (a) above or to extend any such postponement under that sub-paragraph, the Council shall give to the underwriting agent concerned notice in writing of the Council’s intention specifying the reasons why the Council proposes to act and, before taking any action under any such paragraph or sub-paragraph, the Council shall take into account any representations made by or on behalf of the underwriting agent concerned within the period of 14 days beginning with the date of the service of the notice. After taking account of such representations, the Council shall decide whether to:

            (i)         take the course of action originally proposed;

            (ii)         take no further action; or

            (iii)        take some other course of action open to it under a byelaw or regulation for the time being in force and shall notify the underwriting agent of its decision.]

NOTE

  12. [. . .]

NOTE

Part C—Rules for Underwriting Agents

  13. (a) The requirements of Part C of this byelaw shall not apply to an underwriting agent which is at the date of this byelaw approved to act as such under byelaw 87 except in so far as the underwriting agent is applying to be registered under this byelaw or has been so registered.

  [(b) The requirements of Part C of this byelaw for managing agents and PRS managers shall also apply to an underwriting agent which acts as a managing agent, a members’ agent, a PRS manager or in two or all of such capacities (as the case may be).]

NOTE

Section I—Ownership and Control

[All Underwriting Agents

  13A. (a) No person shall, without the prior written consent of the Council, be a controller of an underwriting agent.

  (b) An underwriting agent shall, so far as lies within its powers, procure that no person who is a [[controller of the underwriting agent shall acquire a notifiable holding in that underwriting agent]] unless:

            (i)         that person has given notice to the Council stating that he intends to [[acquire such a holding]] and containing such particulars as the Council may require; and

            (ii)         either the Council has, before the expiry of the period of three months beginning with the date of service of the notice (or of such longer period beginning with that date as the Council may, before the expiry of the three month period, notify to him), notified him in writing that there is no objection to his [[proposed acquisition]] or that period has elapsed without the Council having served a written notice of objection.

  (c) A person who applies for consent under sub-paragraph (a) or makes a notification under sub-paragraph (b) shall supply, or procure the supply of, such information in connection with its application or notification (as the case may be) as the Council may require.

 

  (d) The Council may, in granting its consent under sub-paragraph (a) [[or giving its approval under sub-paragraph (b)]], impose such conditions and requirements as it thinks fit (including, without prejudice to the generality of the foregoing the execution by the person seeking to become a [[…]] controller [[or to acquire a notifiable holding in the underwriting agent]] of any of the undertakings described in paragraph 9(ba)).

  13B. If an underwriting agent becomes aware that a person [[has acquired or is proposing to acquire a notifiable holding in]] the underwriting agent, it shall forthwith notify the Council in writing of that fact and shall supply, or procure the supply of, such information in connection with its notification as the Council may require.]

NOTE

Managing Agents

  14. No managing agent shall be a Lloyd’s broker (as defined in section 12(1)(b) of the Act) or associated with a Lloyd’s broker unless the Committee otherwise agrees in accordance with section 11(5) of the Act.  15. [Deleted on 8 June 1988 by byelaw No. 4 of 1988 with effect from 1 July 1988.]

Companies limited by shares registered under the Companies Acts

  16. No share in a managing agent shall be registered in the name of more than one holder and each holder shall retain the entire beneficial interest in every share registered in his name for himself only and shall not create or permit to be created any interest in such share in favour of any other person, [without the prior written consent of the Council].

NOTE

  17. [Deleted on 4 April 1990 by byelaw No. 4 of 1990.]  [18. [. . .]

NOTE

  19. […]

NOTE

  […]

NOTE

  [21. [[[Save in the case of a captive syndicate or]]] [[Unless the prior written consent of the Council has been obtained]], the directors for the time being of a managing agent shall include the active underwriter of any syndicate managed by that managing agent which represents ten per cent or more of the aggregate of the syndicate allocated capacity of the syndicates managed by that managing agent.]

NOTE

  [. . .]

NOTE

  22. [Revoked on 27 April 1993 by byelaw No. 7 of 1993.]

  […]

NOTE

  24. A managing agent or, as the case may be, a holder of a share in a managing agent or a director of a managing agent, which fails to comply with:

            (a)        paragraph [16] of this byelaw by reason only of the transfer by operation of law of the beneficial interest in a share in the managing agent; or

NOTE

            (b)        [Revoked on 4 April 1990 by byelaw No. 4 of 1990];

            (c)        paragraphs 19, [[[ or ]]] [21, [[ . . . ]] [[[ . . . ]]]] of this byelaw by reason only of any director of the managing agent ceasing for whatever reason to be:

            (i)         [[[[ . . . ]]]]

            (ii)         a director; or

                        [[[ . . . ]]]

            (iv)        an active underwriter referred to in [paragraph 21] of this byelaw; or

                        [[ . . . ]]

NOTE

            (d)        paragraphs [21 [[ . . . ]] or 50B] of this byelaw by reason only of the active underwriter of any of the syndicates managed by the managing agent ceasing for whatever reason to be an active underwriter or (as the case may be) an active underwriter referred to in [paragraph 21 of this byelaw]

            [(e)       paragraph [ . . . ] 50B of this byelaw by reason only of the run-off manager of any of the run-off syndicates managed by the managing agent ceasing for whatever reason to be a run-off manager [ . . . ].

NOTE

shall not be regarded as being in breach of the relevant paragraph provided that such failure [does not arise in relation to a captive syndicate nor persists for] longer than 60 days (or such longer period as the Committee may determine in any particular case) from the date when the failure first occurs.

NOTE

Companies registered under the Companies Acts

(other than companies limited by shares)

  25. In the case of a company registered under the Companies Acts (other than a company limited by shares as defined by [section 1(2) of the Companies Act 1985]), [paragraphs 16 and [[19]] to 24] of this byelaw shall apply as if references to “holder” were replaced by references to “member” (as defined in [section 22 of the Companies Act 1985]) and references to “interest” in respect of a share by “right of membership”, [[. . .]]

NOTE

General partnerships

  26. The partnership share of a partner in a managing agent which is a partnership shall be beneficially held by such partner, who shall not create or permit to be created any interest in his partnership share in favour of any person, unless the Committee otherwise agrees; and every partner in such a managing agent shall procure (to the extent that by the exercise of his powers and votes as a partner he can so procure) that no interest in the partnership shall be created in favour of any other person, [without the prior written consent of the Council].

NOTE

  [. . .]

NOTE

  [. . .]

NOTE

  29. [. . . ]

NOTE

  [30. [[Save in the case of a captive syndicate or]] [Unless the prior written consent of the Council has been obtained], the partners for the time being in a managing agent shall include the active underwriter of any syndicate managed by that managing agent which represents ten per cent or more of the aggregate of the syndicate allocated capacity of the syndicates managed by that managing agent.]

NOTE

  [ . . . ]

NOTE

  31. [Revoked on 27 April 1993 by byelaw No. 7 of 1993.]

  [ . . . ]

NOTE

  33. A managing agent or, as the case may be, a partner in a managing agent which fails to comply with:

            (a)        paragraph [ . . . ] 26 [ . . . ] of this byelaw by reason only of the transfer by operation of law of a partnership share in the managing agent; or

NOTE

            (b)        paragraphs [[[[29 or 30]]]] of this byelaw by reason only of any partner in the managing agent ceasing for whatever reason to be:

            (i)         a partner; or

[[[[ . . . ]]]]

[[ . . . ]]

            (iv)        an active underwriter referred to in [paragraph 30] of this byelaw; or [[[ . . . ]]]; or

            (c)        paragraphs [30 [[[[ . . . ]]]] or 50B] of this byelaw by reason only of the active underwriter of any of the syndicates managed by the managing agent ceasing for whatever reason to be an active underwriter or (as the case may be) an active underwriter referred to in [paragraph 30 of this byelaw]; or

            [(d)       paragraph [[[ . . . ]]] 50B of this byelaw by reason only of the run-off manager of any of the run-off syndicates managed by the managing agent ceasing for whatever reason to be a run-off manager [[[ . . . ]]]],

shall not be regarded as being in breach of the relevant paragraph provided that such failure [does not arise in relation to a captive syndicate nor persists for] longer than 60 days (or such longer period as the Committee may determine in any particular case) from the date when the failure first occurs.

NOTE

Limited partnerships

  34. In the case of a limited partnership:

            (a)        paragraphs [[[[ . . . ]]]] 29, 30, [[[ . . . ]]], [[[[ . . . ]]]] and (as applicable to those paragraphs) 33 of this byelaw shall apply on the basis that references in those paragraphs to “partner” or “partners” shall be references to general partners only;

            (b)        paragraph 26 (and paragraph 33 insofar as it applies to paragraph 26) of this byelaw shall apply on the basis that references in those paragraphs to “partner” or “partners” shall be references to general partners or limited partners, as the case may be;

[…]

            (d)        no person shall, [without the prior written consent of the Council], be entitled to exercise more than [[10]] per cent.] of the votes for the time being exercisable on a resolution of (i) all the general and limited partners and (ii) all the general partners in a limited partnership which is a managing agent [. . .];

NOTE

            (e)        a limited partnership which fails to comply with:

            (i)         paragraphs 26, [[[[ 29 and 30 ]]]] (as amended by sub-paragraphs (a) or (b) of this paragraph) of this byelaw or with sub-paragraph (d) of this paragraph by reason only of its limited partners ceasing for whatever reason to be a limited partner and/or the limited partnership ceasing for whatever reason to be a limited partnership; or

            (ii)         sub-paragraph (d) of this paragraph by reason only of the transfer by operation of law of a partnership share in the managing agent

shall not be regarded as being in breach of the relevant paragraph or sub-paragraph (as the case may be) provided that such failure [does not arise in relation to a captive syndicate nor persists for] more than 60 days (or such longer period as the Committee may determine in any particular case) from the date when the failure first occurs.

NOTE

Members’ Agents

Companies limited by shares registered under the Companies Acts

  35. No share in a members’ agent shall be registered in the name of more than one holder and each holder shall retain the entire beneficial interest in every share registered in his name for himself only and shall not create or permit to be created any interest in such share in favour of any other person, [without the prior written consent of the Council].

NOTE

  36. [Revoked on 4 April 1990 by byelaw No. 4 of 1990 with effect from 5 April 1990.]  [. . .]

NOTE

  38. [ . . . ]

NOTE

  […]

NOTE

  40. [Revoked on 27 April 1993 by byelaw No. 7 of 1993.]  41. A members’ agent or, as the case may be, a holder of a share in a members’ agent or a director of a members’ agent, which fails to comply with:

            (a)        paragraph [35] of this byelaw by reason only of the transfer by operation of law of the beneficial interest in a share in the members’ agent: or

            (b)        [Revoked on 4 April 1990 by byelaw No. 4 of 1990 with effect from 5 April 1990];

            (c)        [[ paragraph 38 ]] of this byelaw by reason only of any director of the members’ agent ceasing for whatever reason to be:

[[[ . . . ]]]

            (ii)         a director [[ . . . ]]

shall not be regarded as being in breach of the relevant paragraph provided that such failure persists for no more than 60 days (or such longer period as the Committee may determine in any particular case) from the date when the failure first occurs.

NOTE

Companies registered under the Companies Acts

(other than companies limited by shares)

  42. In the case of a company registered under the Companies Acts (other than a company limited by shares as defined by [section 1(2) of the Companies Act 1985]), [paragraphs 35 and 3[[8]] to 41] of this byelaw shall apply as if references to “holder” were replaced by references to “member” (as defined in [section 22 of the Companies Act 1985]) and references to “interest” in respect of a share by “right of membership”, [. . .]

NOTE

General partnerships

  43. The partnership share of a partner in a members’ agent which is a partnership shall be beneficially held by such partner, who shall not create or permit to be created any interest in his partnership share in favour of any person, unless the Committee otherwise agrees; and every partner in such a members’ agent shall procure (to the extent that by the exercise of his powers and votes as a partner he can so procure) that no interest in the partnership shall be created in favour of any other person, [without the prior written consent of the Council].

NOTE

  […]

NOTE

  […]

NOTE

  46. [ . . . ]

NOTE

  47. [Revoked on 27 April 1993 by byelaw No. 7 of 1993.]

  48. A members’ agent or, as the case may be, a partner in a members’ agent which fails to comply with:

            (a)        [paragraph 43] of this byelaw by reason only of the transfer by operation of law of a partnership share in the members’ agent; or

NOTE

            (b)        paragraph [ . . . ] 46 of this byelaw by reason only of any partner in the members’ agent ceasing for whatever reason to be:

            (i)         a partner; or

                        […]

            (iii)        a Lloyd’s broker; or

            (iv)        [[…]]

shall not be regarded as being in breach of the relevant paragraph provided that such failure persists for no longer than 60 days (or such longer period as the Committee may determine in any particular case) from the date when the failure first occurs.

NOTE

Limited partnerships

  49. In the case of a limited partnership:

            (a)        paragraphs [[ . . . ]] [46] and (as applicable to those paragraphs) 48 of this byelaw shall apply on the basis that references in those paragraphs to “partner” and “partners” shall be references to general partners only;

            (b)        paragraph 43 (and paragraph 48 insofar as it applies to paragraph 43) of this byelaw shall apply on the basis that references in that paragraph to “partner” or “partners” shall be references to general partners or limited partners, as the case may be;

            […]

NOTE

            (d)        no person shall, [without the prior written consent of the Council], be entitled to exercise more than [[[10]] per cent.] of the votes for the time being exercisable on a resolution of (i) all the general and limited partners and (ii) all the general partners in a limited partnership which is a members’ agent […];

NOTE

            (e)        a limited partnership which fails to comply with:

            (i)         paragraphs 43 [[ . . . ]] [or 46] (as amended by sub-paragraphs (a) or (b) of this paragraph) of this byelaw or with sub-paragraph (d) of this paragraph by reason only of any of its limited partners ceasing for whatever reason to be a limited partner and/or the limited partnership ceasing for whatever reason to be a limited partnership; or

            (ii)         sub-paragraph (d) of this paragraph by reason only of the transfer by operation of law of a partnership share in the members’ agent

shall not be regarded as being in breach of the relevant paragraph provided that such failure persists for no more than 60 days (or such longer period as the Committee may determine in any particular case) from the date when the failure first occurs.

NOTE [PRS Managers

  49A. No PRS manager shall be a Lloyd’s broker (as defined in section 12(1)(b) of the Act) or associated with a Lloyd’s broker unless the Committee otherwise agrees.

Companies limited by shares registered under the Companies Acts

  49B. No share in a PRS manager shall be registered in the name of more than one holder and each holder shall retain the entire beneficial interest in every share registered in his name for himself only and shall not create or permit to be created any interest in such share in favour of any other person without the prior written consent of the Council.

  49C. […]

NOTE

  49D. A PRS manager or, as the case may be, a holder of a share in a PRS manager or a director of a PRS manager, which fails to comply with:

            (a)        paragraph 49B of this byelaw by reason only of the transfer by operation of law of the beneficial interest in a share in the PRS manager; or

            (b)        paragraph 49C of this byelaw by reason only of any director of the PRS manager ceasing for whatever reason to be:

            (i)         […]

            (ii)         a director; or

            (c)        paragraph 50B of this byelaw by reason only of the run-off manager of any of the run-off syndicates managed by the PRS manager ceasing for whatever reason to be a run-off manager,

shall not be regarded as being in breach of the relevant paragraph provided that such failure persists for no longer than 60 days (or such longer period as the Committee may determine in any particular case) from the date when the failure first occurs.

NOTE

Companies registered under the Companies Acts (other than companies limited by shares)

  49E. In the case of a company registered under the Companies Acts (other than a company limited by shares as defined by section 1(2) of the Companies Act 1985), paragraphs 49B to 49D of this byelaw shall apply as if references to “holder” were replaced by references to “member” (as defined in section 22 of the Companies Act 1985) and references to “interest” in respect of a share by “right of membership”.

General partnerships

  49F. The partnership share of a partner in a PRS manager which is a partnership shall be beneficially held by such partner, who shall not create or permit to be created any interest in his partnership share in favour of any person, unless the Committee otherwise agrees; and every partner in such PRS manager shall procure (to the extent that by the exercise of his powers and votes as a partner he can so procure) that no interest in the partnership shall be created in favour of any other person, without the prior written consent of the Council.

  49G. […]

NOTE

  49H. A PRS manager or, as the case may be, a partner in a PRS manager which fails to comply with:

            (a)        paragraph 49F of this byelaw by reason only of the transfer by operation of law of a partnership share in the PRS manager; or

            (b)        […]

NOTE

            (c)        paragraph 50B of this byelaw by reason only of the runoff manager of any of the runoff syndicates managed by the PRS manager ceasing for whatever reason to be a runoff manager,

shall not be regarded as being in breach of the relevant paragraph provided that such failure persists for no longer than 60 days (or such longer period as the Committee may determine in any particular case) from the date when the failure first occurs.

Limited partnerships

  49I. In the case of a limited partnership:

            (a)        paragraphs 49G and 49H of this byelaw shall apply on the basis that references in those paragraphs to “partner” or “partners” shall be references to general partners only;

            (b)        paragraph 49F (and paragraph 49H insofar as it applies to paragraph 49F) of this byelaw shall apply on the basis that references in those paragraphs to “partner” or “partners” shall be references to general partners or limited partners, as the case may be;

            (c)        no person shall, without the prior written consent of the Council, be entitled to exercise more than 10 per cent. of the votes for the time being exercisable on a resolution of (i) all of the general and limited partners and (ii) all the general partners in a limited partnership which is a PRS manager;

            (d)        a limited partnership which fails to comply with:

            (i)         paragraphs 49F and 49G (as amended by subparagraph (a) or (b) of this paragraph) of this byelaw or with subparagraph (c) of this paragraph by reason only of its limited partners ceasing for whatever reason to be limited partners and/or the limited partnership ceasing for whatever reason to be a limited partnership; or

            (ii)         subparagraph (c) of this paragraph by reason only of the transfer by operation of law of a partnership share in the PRS manager,

                        shall not be regarded as being in breach of the relevant paragraph or subparagraph (as the case may be) provided that such failure persists for no longer than 60 days (or such longer period as the Committee may determine in any particular case) from the date when the failure first occurs.]

NOTE

Section II—Operation

Managing Agents

  50. No managing agent shall manage a syndicate in conjunction with another managing agent, [without the prior written consent of the Council].

NOTE

            [50A. (a)           A managing agent shall not permit a person to hold the position of active underwriter of a syndicate managed by it unless he has satisfied or is exempted from the requirements] [[made under the Training and Development Byelaw (No. 23 of 1998, 343).]]

NOTE

            [50B.(a)            Subject to the provisions of sub-paragraph (b) below, every managing agent shall appoint a person to be the active underwriter of each syndicate managed by it.

            (b)        Notwithstanding the provisions of sub-paragraph (a) above, a managing agent may appoint a person to be the run-off manager of any run-off syndicate managed by it in place of the active underwriter.]

NOTE

Members’ Agents—corporate advisers

  [50C. (1) The Council may prescribe such conditions and requirements regarding corporate advisers as it thinks fit and may add to, alter or withdraw any condition or requirements so prescribed.

  (2) Without prejudice to the generality of sub-paragraph (1) any conditions and requirements prescribed under that sub-paragraph:

            (a)        may impose requirements which are absolute or which are varied from time to time by reference to such factors as are specified in or determined in accordance with such conditions and requirements;

            (b)        may make different provisions for different cases or different classes of cases;

            (c)        may specify certain circumstances in which corporate advisers are to be exempt from any such conditions or requirements or may be excused from compliance with any such conditions or requirements to such an extent as the Council may think fit;

            (d)        may impose requirements that take account of any business carried on by a corporate adviser other than at Lloyd’s;

            (e)        may make provision as to the assets, liabilities and other financial matters to be taken into account in determining a corporate adviser’s financial resources; and the extent to which the manner in which they are to be taken into account, for the purposes of such conditions and requirements;

            (f)         may require corporate advisers to hold assets of such description and in such amounts or of such value as may be specified or determined in accordance with such conditions and requirements;

            (g)        may make provisions for ensuring that, in such circumstances and to such an extent as may be prescribed, the assets of a corporate adviser are maintained in such places as may be prescribed;

            (h)        may prohibit corporate advisers from incurring liability of such descriptions, or in favour of, or by way of guarantee or indemnity for, such persons or classes of persons, as may be specified; and

            (i)         may contain incidental, supplementary and transitional provisions.

  (3) Subject to sub-paragraph (4), to the extent that no conditions or requirements are made by the Council under this paragraph 50C, the provisions of this byelaw applicable to members’ agents shall apply to corporate advisers.

  (4) Unless the Council otherwise directs, in respect of corporate advisers only:

            (a)        paragraphs 8(a), 13A(a), 53(a)(iii) and (iiia) of this byelaw do not apply; and

            (b)        [[…]]

NOTE

[PRS Managers

  50[D].(a) No PRS manager shall manage a proportional reinsurance syndicate in conjunction with another PRS manager without the prior written consent of the Council.

  (b) No PRS manager shall manage a proportional reinsurance syndicate unless it complies with the requirements prescribed by the Council.]

NOTE

All Underwriting Agents

  [51. An underwriting agent’s business shall consist only of:

            (a)        the conduct of its business as such at Lloyd’s and any other business which the Council considers to be directly ancillary thereto; and

            (b)        without prejudice to the generality of sub-paragraph (a), the provision of services to Equitas Limited or Equitas Reinsurance Limited.]

           

NOTE

  52. [Revoked on 27 April 1993 by byelaw No. 7 of 1993.]  [52A. (1) Every underwriting agent shall appoint a compliance officer who is [[ . . . ]]:

            (a)        in the case of an underwriting agent which is a company, a director of or the company secretary to that company; or

            (b)        in the case of an underwriting agent which is a partnership, a partner in that partnership

but in the case of an underwriting agent to which permission to act as such is granted before 1 January 1989 this sub-paragraph shall not apply to that underwriting agent before that date.

  (2) The compliance officer shall without prejudice to the responsibilities of the directors or partners be responsible for that underwriting agent’s compliance with:

            (a)        that underwriting agent’s duties to the underwriting members for whom it acts as such;

            (b)        the Insurance Companies Act 1982, Lloyd’s Acts 1871 to 1982 and all byelaws, regulations, directions and requirements made given or imposed thereunder for the time being in force;

            (c)        any conditions of registration imposed on that underwriting agent under this byelaw;

and, without prejudice to the foregoing, shall ensure that the underwriting agent pays due regard to any codes of practice, market circulars, or other advice issued by or under the authority of the Council or the Committee.]

NOTE

  [52B. No underwriting agent shall act as a managing agent, a members’ agent, a PRS manager or in two or all of such capacities except where the Council has granted permission under paragraph 52C of this byelaw.

  52C. The Council may on the application of an underwriting agent grant permission to that underwriting agent to act or (as the case may be) to continue to act as a managing agent, a members’ agent, a PRS manager or in two or all of such capacities.]

NOTE

Section III—Miscellaneous

All Underwriting Agents

Consent to, and notification of, changes

  53. (a) No underwriting agent shall, without the prior written consent of the Committee, permit any of the events listed below to occur:

            (i)         [Revoked on 27 April 1993 by byelaw No. 7 of 1993.]

            [(ia)      any reduction in the amount of its prescribed financial resources;]

NOTE

            (ii)         a change in any matters relating to any condition imposed in respect of the underwriting agent under paragraph 9 of this byelaw;

    […]

NOTE

            [(iiia)     the appointment of a person as the compliance officer of the underwriting agent] [, Provided that no such consent shall be required if that person meets the following conditions:

            (1)        he has been a compliance officer of a Lloyd’s broker or an underwriting agent at any time during the six month period ending on the date of his appointment as such compliance officer; and

            (2)        he is not the subject of a direction of administrative suspension made under any provision of the Administrative Suspension Byelaw (No. 7 of 1987, 407);]

NOTE

                        [[and

            (3)        he is not an associate, controller or connected company of a captive corporate member;]]

            (iv)        in the case of a managing agent, the appointment of an active underwriter of a syndicate managed by the managing agent;

            [(iva)     in the case of a managing agent, the appointment of a run-off manager of a run-off syndicate managed by the managing agent;]

NOTE

            [(ivb)     in the case of a managing agent, the appointment or removal of a person as a managing agent’s trustee or the appointment by any managing agent’s trustee (in his capacity as such) of any person as attorney;]

NOTE

            [(ivc)     in the case of a PRS manager, the appointment of a runoff manager of a runoff syndicate managed by the PRS manager;]

NOTE

            (v)        any reduction of, or payment out of, the capital of the underwriting agent; and

            (vi)        any matter requiring the agreement of the Committee under any such paragraph of this byelaw.

  (b) Every underwriting agent shall forthwith notify the Committee in writing of the occurrence or proposed occurrence of any of the following:

            (i)         an event as a result of which votes exercisable only in limited circumstances by a holder of shares in, or a member of, the underwriting agent becomes exercisable generally;

            [(ia)      a material change in its financial resources whereby the underwriting agent fails, or is likely in the foreseeable future to fail, to maintain such resources of the prescribed amount or description;]

NOTE

            [(ib)      a change in the constitution of the underwriting agent;]

NOTE

    […]

NOTE

    […]

NOTE

            [(iia)      an active underwriter or run-off manager of a syndicate managed by that underwriting agent ceasing for whatever reason to be the active underwriter or run-off manager of that syndicate;]

NOTE  The sub-paragraph in square brackets was inserted on 27 April 1993 by byelaw No. 7 of 1993 with effect from 28 April 1993.

            (iii)        a change in respect of an interest in a share, partnership share or membership right in the underwriting agent other than a change which requires the [prior written consent of the Council] under this byelaw;

            (iv)        a material change in the location or adequacy or suitability of the staff of the underwriting agent;

            [(iva)     the engagement by the underwriting agent of any manager or member of staff other than under a contract of service unless such manager or member of staff works for the underwriting agent’s wholly owned subsidiary (as defined by section 736(5) of the Companies Act 1985) under a contract of service;]

NOTE

            (v)        a material change in the circumstances which may affect the underwriting agent’s ability to supervise and service all of its activities and to be fully and properly accountable and responsible for those activities;

            [(va)     the permanent cessation of the acceptance of new or renewal insurance business by any syndicate managed by the underwriting agent (other than the variation or extension of risks previously underwritten, or reinsurance to close an earlier year of account of the syndicate);]

NOTE

            (vi)        a material change in the location of the books and other records of the underwriting agent relating to the conduct of its business at Lloyd’s;

            (vii)       a change in the date to which the accounts of the underwriting agent or its ultimate holding company are prepared;

            (viii)      the underwriting agent ceasing to be a going concern; [ . . . ]

NOTE

            (ix)        the underwriting agent’s business ceasing to consist only of the conduct of its business as an underwriting agent at Lloyd’s and any other business which the Committee considered to be directly ancillary thereto;

            [(x)       the making of any arrangement to which paragraph 8A(a)(i) applies; and

            (xi)        a material change in any other information furnished to the Council in connection with an application for permission to act as an underwriting agent under this byelaw or in connection with any review of any permission granted;]

NOTE

            [(xii)      a material change in the conditions attached to or the applicability of any exemption granted by the Council to an active underwriter [or run-off manager] of a syndicate managed by a managing agent from the requirements of paragraph 2 of the Lloyd’s Market Certificate Byelaw (No. 6 of 1989)]

NOTE

            [(xiii)     the delegation by the directors for the time being of an underwriting agent of any of their powers to any person other than the underwriting agent’s managing director; and

            (xiv)      the delegation by the partners for the time being of an underwriting agent of any of their powers to any person other than the underwriting agent’s managing partner] [; and]

NOTE

            (xv)       in the case of a managing agent, the death or resignation of, or the occurrence of any notifiable event in relation to, any managing agent’s trustee.]

NOTE

  [53A. The Council shall not give its consent pursuant to paragraph 53(a) to the appointment of any active underwriter [or run-off manager] of a syndicate managed by a managing agent unless such active underwriter [or run-off manager] [is so qualified that a managing agent may permit him to hold such position without contravening paragraph 50A of this byelaw.]

NOTES

Accounts and financial statements

  [53B. Every underwriting agent which is not a company to which section 221 and 222 of the Companies Act (accounting records) apply shall cause such accounting records to be kept and preserved as will ensure that it would at all times comply with those sections if they applied to it.]

NOTE

  [53C. (a) Every underwriting agent shall establish and maintain an adequate system of control over its transactions and records.

  (b) An underwriting agent’s system of control shall not be regarded as adequate for the purposes of this paragraph unless it is such as will ensure that the underwriting agent will at all times observe and comply with its obligations under this Section and Section V of this Part of this byelaw and any conditions and requirements imposed under any provision of this Section or of Section V of this Part of this byelaw.]

NOTE

  54. (a) Every underwriting agent which is a company registered under the Companies Acts shall deliver to the Committee a copy of all such accounts as the underwriting agent is required by the Companies Acts to [deliver to the registrar of companies], having attached thereto:

            (i)         a copy of every document required by law to be attached thereto; [ . . . ]

            (ii)         the statement [and] declaration [ . . . ] referred to in paragraph 56 of this byelaw [; and]

            [(iii)       the report referred to in paragraph 61 of this byelaw;]

within the seven months [(or such other period as the Council may from time to time prescribe)] after the end of each accounting reference period of the underwriting agent ending after the underwriting agent is registered under this byelaw.

  (b) Every underwriting agent which is a company registered under the Companies Acts and is subsidiary shall deliver to the Committee a copy of all such group accounts as its ultimate holding company is required by law to prepare together with every document required by law to be attached thereto, within seven months [(or such other period as the Council may from time to time prescribe)] after the end of each period ending after the underwriting agent is registered under this byelaw in respect of which such group accounts are required to be prepared.

NOTE

  55. Every underwriting agent which is a partnership shall deliver to the Committee:

            (a)        a copy of a set of accounts prepared in respect of every financial period ending after the underwriting agent is registered under this byelaw. Such accounts shall contain information equivalent to the information which they would contain if the underwriting agent were a company registered under the Companies Acts [and to which paragraph 54(a) of this byelaw applies][;]

            (b)        the statement [and] declaration [ . . . ] referred to in paragraph 56 of this byelaw[; and]

            [(c)       the report referred to in paragraph 61 of this byelaw;]

within seven months [(or such other period as the Council may from time to time prescribe)] after the date to which the accounts have been prepared.

NOTE

  56. [(a) Every underwriting agent shall complete a statement of financial position (the “statement”) which shall include:

            (i)         a statement of the underwriting agent’s current financial position, made up to each date to which a set of accounts of the underwriting agent is prepared, and

            (ii)         financial forecasts, which shall include a profit and loss account and a balance sheet drawn as at the end of the current financial year, together with a statement setting out and explaining the assumptions upon which they were drawn.]

NOTE

  (b) A director of, or a partner in, the underwriting agent shall sign and date a declaration in respect of each statement, on behalf of the underwriting agent:

            (i)         confirming that the statement has been completed in accordance with this byelaw;

            (ii)         stating whether (and if so, in what respects) there has since the date to which the statement was completed occurred a change which would cause a surplus shown in the statement to be materially reduced or a shortfall so shown to be materially increased; [. . .]

            (iii)        stating whether adequate funds and facilities exist to enable the underwriting agent to carry on business as a going concern for a period of not less than 12 months from the date of the declaration. [; and

            (iv)        stating that the underwriting agent has complied with paragraphs 53B and 53C throughout the period covered by the statement.]

  [(c) The statement shall be delivered to the Council by the end of the period within which accounts must be delivered to the Council under paragraphs 54 and 55 of this byelaw.]

NOTE

  [56A. (a) Every underwriting agent shall complete quarterly statements of financial position (the “quarterly statements”) which shall include a statement of the underwriting agent’s financial position, made up as at each date to which a set of accounts of the underwriting agent is prepared and as at each date three, six and nine months thereafter.

  (b) A director of, or a partner in, the underwriting agent shall sign and date a declaration in respect of each quarterly statement, on behalf of the underwriting agent;

            (i)         confirming that the statement has been completed in accordance with this byelaw;

            (ii)         stating whether (and if so, in what respects) there has since the date to which the statement was completed occurred a change which would cause a surplus shown in the statement to be materially reduced or a shortfall so shown to be materially increased; and

            (iii)        stating whether adequate funds and facilities exist to enable the underwriting agent to carry on business as a going concern for a period of not less than three months from the date of the declaration.

  (c) The quarterly statements shall be delivered to the Council by the end of the period one month [(or such other period as the Council may from time to time prescribe)] from the date to which the quarterly statements must be made up.

NOTE

  56B. The Council shall have power to prescribe conditions and requirements regarding the form and content of the statement and quarterly statements.]

NOTE

The Committee’s power to obtain information

  57. The byelaw entitled “Information and Confidentiality” shall apply to this byelaw on the basis that [ . . . ] the words “relating to the business of insurance at Lloyd’s or to any person or persons involved in or connected with such business or any other information, documents or other material” in paragraph 1 of that byelaw are deleted.

NOTE

[Managing Agents

Business plans

  57A.(a) In each year a managing agent shall, before the date prescribed by the Council for the purposes of this paragraph, prepare and send to the Society a business plan relating to it and to each of the syndicates managed (or to be managed) by it.

  (b) The business plan required under sub-paragraph (a) shall contain such details and be in respect of such period or periods as the Council may prescribe for the purposes of this paragraph.

  (c) The Council may make requirements prescribing that a managing agent shall notify the Council of such information as the Council may prescribe concerning changes or amendments to business plans submitted to the Society under sub-paragraph (a) and concerning any deviations from the business plan during all (or part) of the period to which the business plan relates.]

NOTE

[PRS Managers

Business Plans

  57AA.(a) In each year a PRS manager shall, before the date prescribed by the Council for the purposes of this paragraph, prepare and send to the Society a business plan relating to it and to each of the proportional reinsurance syndicates managed (or to be managed) by it.

  (b) The business plan required under subparagraph (a) shall contain such details and be in respect of such period or periods as the Council may prescribe for the purposes of this paragraph.

  (c) The Council may make requirements prescribing that a PRS manager shall notify the Council of such information as the Council may prescribe concerning changes or amendments to business plans submitted to the Society under subparagraph (a) and concerning any deviations from the business plan during all (or part) of the period to which the business plan relates.]

NOTE

[Report Relating to Certain Events

            57B.     (a)The Council may for the purposes of this paragraph prescribe details of hypothetical events that could give rise to claims being made on contracts of insurance underwritten at Lloyd’s.

                        (b)Every managing agent shall calculate, prepare and deliver to the Council, by such date as it may prescribe, a report setting out the effect that such hypothetical events would have on the underwriting results of each syndicate managed by it if such events happened. The Council may for the purposes of this sub-paragraph prescribe:

            (i)         the period or periods to which each report is to relate;

            (ii)         the methods and the assumptions to be used in the calculation and preparation of each report;

            (iii)        the form and content of each report.]

NOTE

                        [(c)Every PRS manager shall calculate, prepare and deliver to the Council, by such date as it may prescribe, a report setting out the effect that such hypothetical events would have on the underwriting results of each proportional reinsurance syndicate managed by it if such events happened. The Council may for the purposes of this subparagraph prescribe:

            (i)         the period or periods to which each report is to relate;

            (ii)         the methods and the assumptions to be used in the calculation and preparation of each report;

            (iii)        the form and content of each report.]

NOTE

[57C. Premiums trust funds

  (a) The Council may prescribe such conditions or requirements to be satisfied or complied with as it may think fit in connection with any discretion, power or authority which an underwriting agent has in relation to premiums trust funds as a condition of permission to act as an underwriting agent, or by underwriting agents during the period of any permission to act as such, and may add to, alter or withdraw any condition or requirement so prescribed.

  (b) Without prejudice to the generality of sub-paragraph (a), any conditions or requirements under that sub-paragraph:

            (i)         may include the requirement to execute and deliver or otherwise become a party to any form of deed, trust deed, contract, assignment, undertaking, mandate, authority, power of attorney or other document or instrument whatsoever;

            (ii)         may include the requirement to exercise any discretion, authority or power the underwriting agent has in relation to any premiums trust fund or under any premiums trust deed only in a manner which is consistent with such conditions or requirements and, for the avoidance of doubt, such conditions or requirements may direct precisely how any such discretion, authority or power of the underwriting agent is to be exercised or that it is not to be exercised;

            (iii)        may relate to any authorisation, consent or approval of the Council required under any premiums trust deed or this byelaw and may make such authorisation, consent or approval subject to compliance with such conditions or requirements;

            (iv)        may include requirements relating to the provision of certificates, confirmations, declarations, information, opinions or reports in relation to any premiums trust fund or under any premiums trust deed or in relation to the exercise or purported exercise by an underwriting agent of any discretion, power or authority in relation thereto;

            (v)        may relate to any person whom a managing agent has appointed, or proposes to appoint, as a managing agent’s trustee and may require the fulfilment by that person of specified conditions, the supply of information or the completion of applications, notices, forms of appointment, documents and undertakings in the prescribed form (whether by the managing agent in question or by the proposed appointee) or the use of forms of appointment, resignations or powers of attorney in the prescribed form.

  (c) Without prejudice to the generality of sub-paragraph (a), any conditions and requirements prescribed under that sub-paragraph:

            (i)         may impose requirements which are absolute or which are to vary from time to time by reference to such factors as are specified in or determined in accordance with such conditions and requirements;

            (ii)         may make different provision for different classes of underwriting agents and different classes of insurance business at Lloyd’s;

            (iii)        may specify circumstances in which an underwriting agent is to be exempt from any such condition or requirement or may be excused from compliance with any such condition or requirement to such an extent as the Council may think fit;

            (iv)        may contain incidental, supplementary and transitional provisions.

  (d) Without prejudice to the generality of sub-paragraph (a), each underwriting agent shall comply with such conditions and requirements as the Council may prescribe under or for the purposes of any premiums trust deed (whether or not prescribed for the purposes of sub-paragraph (a)) as regards lending or investment of premiums trust funds or any part of them, the grant of security over such funds or part, (if permitted by the Council) their application or use in the purchase of tangible fixed assets and the withdrawal, calling in or realising of any deposit, loan, letter of credit, guarantee or investment.

  (e) The Council shall have power to prescribe any notice, document or other instrument referred to in this paragraph 57C as being in the prescribed form and “prescribed form” means, in relation to any such notice or other document or instrument, such form and contents as may from time to time be prescribed.]

NOTE

Substitute Agents

  58. This byelaw shall not apply to a substitute agent except insofar as the Committee shall otherwise determine.

Eec Underwriting Agents

  59. The Committee shall permit a body formed, created, or incorporated, in or under the law of any Member State for the time being of the European Economic Community (including but without limitation a company registered or incorporated in Northern Ireland) to act as an underwriting agent so long as the Committee is satisfied, having regard to the constitution of the body and the law under which the body is formed, created or incorporated, that the requirements and intent of this byelaw are, or will be, complied with. The requirements of this byelaw shall apply to such body with any adaptation as the Committee considers necessary.

Reinsurance

  59A. For the purpose of section 8(3) of Lloyd’s Act 1982, an underwriting member may in the course of his underwriting business at Lloyd’s:

            (a)        place reinsurance of that business through a Lloyd’s broker or through a managing agent carrying out underwriting business on his behalf; and

            (b)        accept reinsurance placed by another underwriting member in the course of his underwriting business at Lloyd’s from a Lloyd’s broker or from a managing agent carrying out underwriting business on behalf of that other underwriting member.]

NOTE

[Section IV—Audit

All Underwriting Agents

  [60. Accounts etc. to be examined by auditor  (a) Every underwriting agent shall procure that all accounts, statements, declarations, returns and other documents to which this paragraph applies be examined by an auditor—

            (i)         who, in the case of an underwriting agent which is a company to which Part VII of the Companies Act 1985 applies, is the auditor of the underwriting agent;

            (ii)         who, in any other case, would be qualified to act as the auditor of the underwriting agent if it were a company within the meaning of the Companies Act 1985; and

            (iii)        who, in either case, is not prohibited from carrying out such an audit by paragraph 62 of this byelaw;

and that the auditor shall prepare reports in the terms required by paragraph 61 of this byelaw.

  (b) This paragraph applies—

            (i)         in the case of an underwriting agent which is a company to which Part VII of the Companies Act 1985 applies, to its accounts (as defined in section 239 of that Act); and

            (ii)         in the case of any other underwriting agent, to its accounts prepared under paragraph 55; and

            (iii)        to the statement and declaration required by paragraph 56 of this byelaw [except the financial forecasts referred to in sub-paragraph 56(a)(ii)]; and

            (iv)        to such other documents as the Council may from time to time specify.

  [(c) The requirement to appoint an auditor under this paragraph applies notwithstanding any exemption under sections 249A to 249E of the Companies Act 1985.]]

NOTE

[61. Form of auditor’s reports

  (a) The forms of auditor’s reports referred to on paragraph 60(a) of this byelaw are as specified in the following provisions of this paragraph.

            (b)        (i)         In the case of accounts to which paragraph 60(b)(i) of this byelaw applies, the report shall state the matters:

                        (aa)      required by the Companies Act 1985 [(disregarding any exemption under sections 249A to 249E of that Act)]; and

                        (bb)      prescribed by the Council from time to time.

                        (ii)         In the case of accounts to which paragraph 60(b)(ii) of this byelaw applies, the report shall state the matters prescribed by the Council from time to time.

  (c) In the case of accounts to which paragraph 60(b)(i) or (ii) apply, a report stating whether in the opinion of the person compiling the report:

            (i)         the statement referred to in paragraph 56(a) of this byelaw has been completed in accordance with the provisions of this byelaw; and

            (ii)         it was reasonable for the director or partner making the declaration referred to in paragraph 56(b) of this byelaw to have made the statements referred to in sub-paragraph (ii)[,] (iii) [and (iv)] thereof.]

NOTE

[62. Accountant who maintains accounting records of an underwriting agent not to act as auditor

  A person shall not without the previous consent of the Council be qualified to audit and report on any document to which paragraph 60 of this byelaw applies if:

  (a) during any part of the period to which that document relates he maintained or assisted in maintaining any of the accounting records of the underwriting agent preparing the document; or

  (b) having regard to all the circumstances he could reasonably be regarded as not independent.]

NOTE

[63. Auditors’ undertakings

  (a) The Council may require an underwriting agent—

            (i)         to procure that the auditor of the underwriting agent execute an undertaking to the Council, in such form and manner as the Council may specify, containing provisions to the effect, or substantially to the effect, set out in sub-paragraph (b) below, together with any such other provisions as the Council may specify; and

            (ii)         to execute a form of consent and waiver, in such form and manner as the Council may specify, by which the underwriting agent will confirm to the Council and to the auditor that it consents to the auditor’s providing to the Council all such information or opinions as it may be required to provide in pursuance of the undertaking referred to in (i) above and will waive, so far as necessary for that purpose, any right of confidentiality in respect of such information or opinions.

  (b) The provisions referred to in sub-paragraph (a) above are—

            (i)         an undertaking that the auditor will comply with the requirements of this Section applicable to him as the auditor of the underwriting agent;

            (ii)         an undertaking that the auditor will:

            (aa)      use his best endeavours, to the extent that he may do so lawfully and ethically, having regard to any relevant guidance on confidentiality, to provide to the Council such information or opinions in relation to matters of which the auditor has become aware in his capacity as auditor of the underwriting agent for the purpose of the exercise of powers contained in Lloyd’s Act 1871 to 1982 or in byelaws or regulations made thereunder whether or not in response to a request by or under the authority of the Council; and

            (bb)      upon reasonable notice requiring him to do so, attend before the Council, the Committee, the Chairman or any Deputy Chairman of Lloyd’s or any officer of the Society duly authorised by any of them; and

            (iii)        an undertaking that the auditor will not continue in the office of auditor of the underwriting agent in circumstances where he could reasonably be regarded as not independent.

  (c) For the purposes of this byelaw relevant guidance on confidentiality means either—

            (i)         any rules or guidance on confidentiality made or issued by any body of accountants of which the auditor is a member which have been approved by the Council as satisfactory for the purposes of this byelaw; or

            (ii)         in the absence of such approval, any rules or guidance on confidentiality made or issued by the Council for the purposes of this byelaw.]

NOTE

[64. Rights of auditors

  (a) Every underwriting agent shall allow its auditor a right of access at all times to its accounting and other records.

  (b) Every underwriting agent and every director of or partner in an underwriting agent shall provide to the auditor of the underwriting agent such information and explanations as the auditor thinks necessary for the performance of his duties.

  (c) If an auditor of an underwriting agent has not obtained all the information and explanations which, to the best of his knowledge and belief, are necessary for the purposes of his audit, he shall state that fact in any report delivered pursuant to paragraph 61 of this byelaw.

  (d)(i) None of the persons listed in sub-paragraph (ii) shall fail to give to an auditor of an underwriting agent any information or explanation required by him pursuant to sub-paragraph (b) above, or shall in giving or purporting to give any information or explanation which the auditor so requires, or is entitled so to require, knowingly or recklessly make a statement which is misleading, false or deceptive in a material particular.

            (ii)         The persons referred to in sub-paragraph (i) are as follows:

            (aa)      an underwriting agent;

            (bb)      any director of or partner in an underwriting agent; and

            (cc)       any compliance officer of an underwriting agent.

  (e) References in this paragraph to an auditor include a person carrying out a further examination pursuant to a direction given under paragraph 65 of this byelaw.]

NOTE

[65. Further examination of accounts and other documents

  (a) If in any case it appears to the Council that there is good reason to do so, the Council may direct any underwriting agent to submit for further examination by a person approved by the Council—

            (i)         any accounts, statement, declaration or other document on which the auditor of that underwriting agent has reported under paragraph 61 of this byelaw; or

            (ii)         such matters contained in any such accounts, statement, declaration or other document as are specified in the direction;

and may receive from the person making the further examination a report of his conclusions.

  (b) Any further examination and report required by a direction under this paragraph shall be carried out and made within such time as is specified in the direction or within such further time as the Council may allow and shall be at the expense of the underwriting agent concerned. The Council may if it thinks fit pay to the person making the further examination all or any part of the remuneration due to him in respect of his examination and report, and the relevant underwriting agent shall be liable to reimburse to the Council on demand all sums so paid by the Council.

  (c) An underwriting agent to which a direction is given under this paragraph shall do everything in its power to procure that the auditor of the underwriting agent and every other person who has advised or dealt with the underwriting agent and is or may be able to provide relevant information or explanation affords to the person who is to carry out the further examination all such assistance as he may require.

  (d) The Council may disclose the report of a person making a further examination under this paragraph to such persons and in such manner as it thinks fit.]

NOTE

[Section V—Financial Resources

All Underwriting Agents

Financial Resources

  [66. (a) The Council may from time to time prescribe conditions and requirements regarding the possession and maintenance by underwriting agents of financial resources as it may consider appropriate, and may from time to time add to, alter or withdraw any condition or requirement so prescribed.

  (b) Without prejudice to the generality of sub-paragraph (a) of this paragraph, any conditions and requirements prescribed under that sub-paragraph—

            (i)         may impose requirements which are absolute or which are to vary from time to time by reference to such factors as are specified in or determined in accordance with such conditions and requirements;

            (ii)         may make different provisions for different cases or different classes of cases;

            (iii)        may specify circumstances in which bodies are to be exempt from any such condition or requirement or may be excused from compliance with any such condition or requirement to such an extent as the Council may think fit;

            (iv)        may make provision as to the assets, liabilities and other matters to be taken into account in determining a body’s financial resources, and the extent to which and the manner in which they are to be taken into account, for the purposes of such conditions and requirements;

            (v)        may require bodies to hold assets of such descriptions and in such amounts or of such value or in such ratios or proportions as may be specified or determined in accordance with such conditions and requirements;

            (vi)        may make provision for ensuring that, in such circumstances and to such an extent as may be prescribed, the assets of a body are maintained in such places as may be prescribed;

            (vii)       may prohibit bodies from incurring liabilities of such descriptions, or in favour of, or by way of guarantee or indemnity for, such persons or classes of person, as may be specified; and

            (viii)      may contain incidental, supplementary and transitional provisions.]

NOTE

[Section VI—Fees

  67. Where the consent of the Council is sought under any paragraph of this byelaw the [[body or]] underwriting agent seeking the consent, or in respect of which it is sought, shall pay to the Society (or procure payment to the Society of) such fees as the Council may from time to time prescribe in relation to that consent.]

NOTE

[68. Arrangements relating to Lloyd’s advisers

  Any person whose name is entered on the register of Lloyd’s Advisers maintained by the Council under paragraph 2 of the Lloyd’s Advisers Byelaw (No. 19 of 1993, 112) other than a person so registered by reason of paragraph 34(1) of that byelaw shall from the date of revocation of that byelaw be registered under paragraph 3 of this byelaw as a members’ agent and shall be designated a corporate adviser and such registration shall be subject to:

            (i)         any condition or other requirement imposed under the Lloyd’s Advisers Byelaw prior to its revocation as if such condition or requirement had been made under this byelaw whether under paragraph 9, paragraph 50C or otherwise;

            (ii)         to such review or renewal on such date and such manner as the Council may require.]

NOTE

102. The Syndicate Audit

Arrangements Byelaw No. 10 of 1984, 10 December 1984

COMMENCEMENT

  This byelaw commenced on 10 December 1984.

AMENDMENTS

  This byelaw was amended by

Syndicate Audit Arrangements (Amendment) Byelaw (No. 3 of 1985)

Syndicate Audit Arrangements (Amendment No. 2) Byelaw (No. 7 of 1989)

Miscellaneous Administrative Provisions (No. 2) Byelaw (No. 1 of 1993)

Underwriting Agents (Amendment No. 7) Byelaw (No. 7 of 1993)

Syndicate Meetings Byelaw (No. 11 of 1994)

Members’ Agents (Information) (Amendment No. 2) Byelaw (No. 4 of 1995)

Syndicate Auditors (Miscellaneous Amendments) Byelaw (No. 10 of 1995)

Appeal Tribunal Byelaw (No. 18 of 1995).

REVOCATION

  This byelaw was revoked by the Audit Arrangements Byelaw (No. 7 of 1998).

103. The Agency Agreements Byelaw No. 1 of 1985, 11 March 1985

COMMENCEMENT

  This byelaw commenced on 11 March 1985.

For the full text of this byelaw, see Part C, 304.

104. The Lloyd’s

Introductory Test Byelaw No. 8 of 1985, 9 December 1985

COMMENCEMENT

  This byelaw commenced on 9 December 1985.

AMENDMENT

  This byelaw was amended by

    Lloyd’s Introductory Test (Amendment) Byelaw (No. 20 of 1995).

REVOCATION

  This byelaw was revoked by the Training and Development Byelaw (No. 23 of 1998, 343).

105. Membership (Entrance Fees and Annual Subscriptions) Byelaw No. 9 of 1987, 7 October 1987

COMMENCEMENT

  This byelaw commenced on 7 October 1987.

AMENDMENTS

  This byelaw was amended by

Corporate Members (Consequential Amendments) Byelaw (No. 20 of 1993)

Transitional and Conversion Arrangements (Corporate Member) Byelaw (No. 9 of 1994)

Conversion and Related Arrangements Byelaw (No. 22 of 1996)

Membership (Entrance Fees and Annual Subscriptions) (Amendment) Byelaw (No. 25 of 1997)

Annual Subscribers Byelaw (No. 15 of 2000).

EXPLANATORY NOTE

  (This note is not part of the byelaw.)

  This Byelaw provides for the payment of entrance fees and annual subscriptions by members of the Society. It replaces and amends certain of the byelaws passed under Lloyd’s Acts 1871 to 1951.

  The Byelaw requires, as a condition of underwriting insurance business at Lloyd’s, that members pay the entrance fees and annual subscriptions as prescribed from time to time by the Council. In addition, the Council may charge interest on late payments. The remaining penalties in the Byelaw for the non-payment of entrance fees and annual subscriptions are essentially re-enactments of those present in the byelaws passed under Lloyd’s Acts 1871 to 1951.

The Council of Lloyd’s in exercise of its powers under section 6(2) and paragraph (4) of Schedule 2 of the Lloyd’s Act 1982 by special resolution hereby makes the following byelaw:

1. Interpretation

  In this byelaw, [—

            (a)        “approved conversion arrangement” has the meaning given in the [[Conversion and Related Arrangements Byelaw (No. 22 of 1996, 329)]];

            (b)        “due date” means the date prescribed by the Council under paragraph 2(3);

            (c)        “effective date” has the meaning given in the [[Conversion and Related Arrangements Byelaw (No. 22 of 1996, 329)]];

            (d)        “equity share capital” has the meaning given in section 744 of the Companies Act 1985; and

            (e)        “successor corporate member” means a corporate member—

            (i)         not less than 85 per cent (or such other percentage as the Council may for the time being prescribe) of the equity share capital of which is beneficially owned by one or more individual members who have entered into an approved conversion arrangement with that corporate member; and

            (ii)         not less than that percentage of the voting power at any general meeting of which is exercisable by (or at the direction of) such individual members.]

NOTE

2. Entrance Fees and Annual Subscriptions payable by members of the Society

  (1) [Subject to [[sub-paragraphs (5) and (7)]], every] member of the Society shall pay to the Society in each calendar year such entrance fees and annual subscriptions as the Council may from time to time prescribe in accordance with the provisions of this paragraph.

  (2) The amounts of entrance fees and annual subscriptions and the manner of calculating such amounts shall be such as the Council shall from time to time by special resolution prescribe.

  (3) Entrance fees and annual subscriptions shall be payable on such dates and in such manner as the Council shall from time to time by special resolution prescribe.

  (4) Entrance fees and annual subscriptions shall be levied on members of the Society by service on each member of the Society or his underwriting agent or agents of a notice specifying the amount due or the method of calculating the amount due, which shall be paid by such member not later than the date specified for that purpose in such notice.

  (5) The Council may from time to time [[…]] exempt wholly or in part any member or category or class of members of the Society from liability to pay any fee or subscription pursuant to this byelaw.

  (6) Any exemption granted pursuant to sub-paragraph (5):

            (a)        may apply indefinitely or for such period as the Council may specify;

            (b)        may be general or limited to a particular payment or payments made [[or otherwise due to be made]] under sub-paragraph (1).

  [(7) A successor corporate member shall be exempt from liability to pay the entrance fee applicable to a corporate member under sub-paragraph (1).]

NOTE

3. Powers to obtain information

  (1) Every member of the Society shall furnish to the Council such information as the Council may from time to time require by notice in writing to such member or his underwriting agent for the purposes of this byelaw.

  (2) Any information required pursuant to sub-paragraph (1) shall be furnished in such manner and at such time as the Council may specify in writing.

  (3) A member of the Society shall only be required under this paragraph to furnish such information as he or his underwriting agent possess or can reasonably be expected to obtain.

4. Non-payment of subscriptions, etc.

  (1) The making of payments prescribed pursuant to paragraph 2 and any interest thereon charged pursuant to sub-paragraph (2)(b) of this paragraph shall be a condition relating to permission to underwrite insurance business at Lloyd’s and the provisions of the [Membership Byelaw (No. 17 of 1993, 111)] shall apply accordingly where any member of the Society fails to comply with such condition.

  (2) Without prejudice to sub-paragraph (1) where a member of the Society fails to make any payment required pursuant to this byelaw by the due date the Council may from time to time by special resolution take one or more of the following measures:

            (a)        post the name of such member in the Room;

            (b)        charge interest on such amounts of the payments as are unpaid on the due date from the due date until the date of payment at a rate determined by the Council.

            (c)        suspend such member’s right of access to the Room and other parts of the Society’s premises until payment of all sums due under this byelaw has been made.

NOTE

  (3) An individual admitted as a member of the Society shall not be admitted to the Room until he has paid his entrance fee.

[4A. Power to prescribe percentage

  The Council may from time to time by special resolution prescribe a different percentage for the purposes of paragraph 1(e).]

NOTE

5. Revocation and amendment of byelaws made under Lloyd’s Acts 1871 to 1951

  (1) Byelaws Nos. 23 and 30 are revoked.

  (2) Byelaw No. 21 is amended by deleting “Members”.

  (3) Byelaw No. 24 is amended by deleting “a Member or” and substituting “an”.

  (4) Byelaw No. 28 is amended by deleting “Members”.

  (5) The following Schedule is substituted for the Schedule referred to in Byelaw No. 21:

[…]

NOTE

6. Commencement

  This byelaw shall come into force on 7th October 1987.

106. Lloyd’s Brokers Byelaw No. 5 of 1988, 6 July 1988

COMMENCEMENT

  This byelaw commences in stages. Paragraph 19 commences on 1 November 1988; paragraph 20 commenced on 6 July 1988; paragraphs 57(6) and (7) commence on 1 August 1989. The remaining provisions commence on 1 August 1989.

AMENDMENTS

  The byelaw was amended by

Lloyd’s Brokers (Amendment) Byelaw (No. 8 of 1989)

Lloyd’s Brokers (Amendment No. 2) Byelaw (No. 13 of 1989)

Lloyd’s Brokers (Amendment No. 3) Byelaw (No. 6 of 1990)

Lloyd’s Brokers (Amendment No. 4) Byelaw (No. 9 of 1991)

Lloyd’s Brokers (Amendment No. 5) Byelaw (No. 14 of 1991)

Lloyd’s Brokers (Amendment No. 6) Byelaw (No. 16 of 1992)

Information and Confidentiality Byelaw (No. 21 of 1993)

Companies’ Accounts (Miscellaneous Amendments) Byelaw (No. 15 of 1994)

Run-off Companies Byelaw (No. 2 of 1995)

Lloyd’s Brokers (Amendment No. 7) Byelaw (No. 16 of 1995)

Appeal Tribunal Byelaw (No. 18 of 1995)

Lloyd’s Brokers (Amendment No. 8) Byelaw (No. 4 of 1996)

Intermediary Amendment Byelaw (No. 10 of 2000)

Lloyd’s Policy Signing Office Byelaw (No. 11 of 2000)

Lloyd’s Claims Byelaw (No. 12 of 2000).

REVOCATION

  This byelaw was revoked on 6 December 2000 by byelaw No. 17 of 2000, 123.

107. Umbrella Arrangements Byelaw No. 6 of 1988, 6 July 1988

COMMENCEMENT

This byelaw commenced on 1 August 1988.

AMENDMENTS

This byelaw was amended by

Umbrella Arrangements (Amendment) Byelaw (No. 7 of 1990)

Information and Confidentiality Byelaw (No. 21 of 1993)

Appeal Tribunal Byelaw (No. 18 of 1995)

Intermediary Amendment Byelaw (No. 10 of 2000)

Lloyd’s Policy Signing Office Byelaw (No. 11 of 2000)

Lloyd’s Claims Byelaw (No. 12 of 2000).

REVOCATION

  This byelaw was revoked on 6 December 2000 by byelaw No. 17 of 2000, 123.

108. Agency Agreements Byelaw No. 8 of 1988, 7 December 1988.

COMMENCEMENT

  This byelaw commenced on 7 December 1988.

AMENDMENTS

  This byelaw was amended by

Agency Agreements (Amendment) Byelaw (No. 2 of 1990)

Agency Agreements (Amendment No. 2) Byelaw (No. 1 of 1991)

Agency Agreements (Amendment No. 3) Byelaw (No. 4 of 1992)

High Level Stop Loss Fund Byelaw (No. 12 of 1992)

Agency Agreements (Amendment No. 4) Byelaw (No. 13 of 1992)

Agency Agreements (Amendment No. 5) Byelaw (No. 6 of 1993)

Underwriting Agents (Amendment No. 7) Byelaw (No. 7 of 1993)

Misconduct, Penalties and Sanctions Byelaw (No. 9 of 1993)

Agency Agreements (Amendment No. 6) Byelaw (No. 18 of 1993)*

Corporate Members (Miscellaneous Amendments) Byelaw (No. 29 of 1993)

Agency Agreements (Amendment No. 7) Byelaw (No. 1 of 1994)

Agency Agreements (Amendment No. 8) Byelaw (No. 5 of 1994)

Syndicate Accounting Byelaw (No. 18 of 1994)

Agency Agreements (Amendment No. 9) Byelaw (No. 1 of 1995)

Agency Agreements (Amendment No. 10) Byelaw (No. 6 of 1995)

Appeal Tribunal Byelaw (No. 18 of 1995)

Agency Agreements (Amendment No. 11) Byelaw (No. 1 of 1996)

Agency Agreements (Amendment No. 12) Byelaw (No. 14 of 1996)

Agency Agreements (Amendment No. 13) Byelaw (No. 21 of 1996)

Agency Agreements (Amendment No. 14) Byelaw (No. 1 of 1997)

Agency Agreements (Amendment No. 15) Byelaw (No. 10 of 1997)

Major Syndicate Transactions Byelaw (No. 18 of 1997)

Agency Agreements (Amendment No. 16) Byelaw (No. 28 of 1997)

Agency Agreements (Amendment No. 17) Byelaw (No. 1 of 1998)

Agency Agreements (Amendment No. 18) Byelaw (No. 6 of 1998)

Bilateral Arrangements (1998) Byelaw (No. 8 of 1998)

Agency Agreements (Amendment No. 19) Byelaw (No. 1 of 1999)

Bilateral Arrangements Byelaw (No. 4 of 1999)

Agency Agreements (Amendment No. 20) Byelaw (No. 6 of 1999)

Run-Off Years of Account (Revocation) Byelaw (No. 1 of 2000)

Agency Agreements (Amendment No. 21) Byelaw (No. 3 of 2000)

Assignment of Syndicate Participations (Second Nomination) Byelaw (No. 6 of 2000)

Agency Agreements (Amendment No. 22) Byelaw (No. 8 of 2000)

Lloyd’s Policy Signing Office Byelaw (No. 11 of 2000)

Agency Agreements (Amendment No. 23) Byelaw (No. 3 of 2001)

Agency Agreements (Amendment No. 24) Byelaw (No. 1 of 2002).

EXPLANATORY NOTE

(This note is not part of the byelaw.)

  This byelaw prescribes the contractual terms upon which Names will appoint their underwriting agents to carry on their underwriting business at Lloyd’s for the 1990 and subsequent years of account.

  The terms of the agreements are set out in Schedules 1, 2 and 3 to the byelaw and may not be varied otherwise than by byelaw.

  The amount or rate of the agents’ remuneration is subject to agreement between the Name and the agents. There are set out in Schedule 1 to the standard members’ agent’s agreement and the standard managing agent’s agreement certain permitted alternatives for determining the basis upon which the agent’s fees are to be calculated. The bases which are not used should be deleted.

  Where the Name has more than one members’ agent acting for him the Name must appoint one of them as his co-ordinating agent. The duties of the co-ordinating agent and of the other members’ agents are set out in the standard members’ agent’s agreement. The co-ordinating agent’s fee shall be as agreed with the Name.

  For the purposes of paragraph 1.2(a)(i) of each of the standard agreements the list of syndicates shall be the list of syndicates published each year by the Council as “Lloyd’s Underwriting Syndicates”.

  * All the amendments made by byelaw No. 18 of 1993 apply in relation to any agreement made after 8 September 1993 applying in respect of the 1994 or any later year of account and to any agreement under which an underwriting member will underwrite as a Provisional Insurer (as defined in clause 8.2 of the form of agreement set out in Schedule 3 or Schedule 4 to the byelaw) contracts of insurance which will be allocated to such a year of account. By byelaw No. 1 of 1994 the application of the amendments to the principal byelaw made by byelaw No. 18 of 1993 (as amended by byelaw No. 29 of 1993) is extended to every agreement in the terms of any of the schedules to the principal byelaw (as in force immediately before byelaw No. 18 came into force) extant on 1 January 1994. Byelaw No. 1 of 1994 also amends each such agreement and corrects minor errors.

For the full text of this byelaw, see Part C, 310.

109. Lloyd’s Market Certificate

Byelaw No. 6 of 1989, 10 May 1989

COMMENCEMENT

  This byelaw commenced in stages. Paragraphs 2 and 10 commenced on 1 January 1992; the remainder of the provisions commenced on 11 May 1989.

AMENDMENT

  Underwriting Agents (Amendment No. 7) Byelaw of 1993

  Underwriting Agents’ Qualifications (Miscellaneous Amendments) Byelaw (No. 32 of 1993).

REVOCATION

  This byelaw was revoked by the Training and Development Byelaw (No. 23 of 1998, 343).

EXPLANATORY NOTE

  (This note is not part of the byelaw.)

  This byelaw imposes a requirement, which comes into effect on 1st January 1992, that every active underwriter shall have sat and passed such of the examinations for the LMC in respect of which he is not exempt.

  The following categories of persons are automatically exempt from the LMC:

            (a)        every person who on 31st December 1991 holds the office of active underwriter;

            (b)        persons becoming active underwriters on or after 1st January 1992 who have had experience over a period of not less than five years out of the seven year period ending on 1st January 1992 of having accepted risks on behalf of the members of a syndicate with the authority of the managing agent of that syndicate and who are aged 30 years or more on 1st January 1992.

  The Council can at its discretion grant a full or partial exemption, which may be limited in duration, from the requirement imposed by paragraph 2 to any person who appears to be sufficiently qualified to merit the exemption. In considering whether or not to grant any such exemption the Council is to have regard to the matters specified in paragraph 4(4).

  Part C of the byelaw establishes an examination structure and procedure for the LMC and also provides for the award of the LMC. The examination papers will be administered, set and marked for and on behalf of the Society by the Chartered Insurance Institute. The first examinations for the LMC will be held in April 1990 and candidates will be examined in English law (with special reference to the law of agency), principles and practice of insurance and Lloyd’s regulatory requirements.

  Part D of the byelaw amends the Underwriting Agents Byelaw (No. 4 of 1984) with effect from 1 January 1992. The effect of the amending provisions is to impose obligations on underwriting agents to ensure that their active underwriters comply with paragraph 2 of the byelaw. The Council is required not to give its consent to the appointment of any active underwriter unless he holds the LMC or is exempt from the requirements of paragraph 2.

110. Annual Subscribers, Associates, Substitutes and Others Byelaw No. 8 of 1993, 9 June 1993

AMENDMENT

  This byelaw was amended by

Corporate Members (Consequential Amendments) Byelaw (No. 20 of 1993)

Appeal Tribunal Byelaw (No. 18 of 1995).

REVOCATION

  This byelaw was revoked on 1 November 2000 by byelaw No. 15 of 2000, 122.

EXPLANATORY NOTE

  This byelaw replaces the byelaws made under Lloyd’s Acts 1871 to 1951 concerning Annual Subscribers, Associates, Substitutes, Subscribers for Intelligence and visitors. It updates many of the provisions of those byelaws and introduces certain new measures.

  PART A of the byelaw deals with general interpretation.

  PART B, paragraphs 2 to 10, deals with Annual Subscribers and Associates. The principal matters covered by this Part include:

            (a)        a register of Annual Subscribers and Associates, which may be made available for inspection at the discretion of the Council (Paragraph 2);

            (b)        the limitation of Annual Subscribers to directors or compliance officers of, or partners in, underwriting agents or Lloyd’s brokers or bodies applying for admission as such (Paragraph 3(1) and (2));

            (c)        the restriction of Associates to persons not engaged in insurance business (Paragraph 3(3));

            (d)        a requirement that applicants for registration as an Annual Subscriber be recommended by two persons who must be either members of the Society or Annual Subscribers and of whom one must be a director of, or partner in, the underwriting agent or Lloyd’s broker (unless it is a body applying for such status and none of its directors or partners is a member or Annual Subscriber (Paragraph 4(2) and (3));

            (e)        a requirement that applicants for registration as Associates be recommended by three persons of whom at least one must be a member of the Society and the other two must be either members, Annual Subscribers or Associates (Paragraph 4(4));

            (f)         the removal of the requirement for election. The Council may prescribe admission procedures and requirements (Paragraph 4(5));

            (g)        the granting to the Council of powers over Annual Subscribers and Associates analogous to those it has in respect of members, underwriting agents and Lloyd’s brokers (Paragraphs 5 to 10). The criterion of “suitability” for registration of persons as an Annual Subscriber or Associate reflects the criterion in paragraph 5(b) of the Membership Byelaw (No. 9 of 1984). The obligation to report criminal convictions (Paragraph 10) echoes similar provisions in paragraph 21B of the Membership Byelaw. The Council’s powers of removal from the register (Paragraph 9) are similar to those it has in respect of members, agents and Lloyd’s brokers;

            (h)        as is the case with members, underwriting agents and brokers, the granting to the Council of power to retain jurisdiction over persons who would otherwise cease to be Annual Subscribers or Associates, eg by failing to pay a subscription or at their own request (Paragraph 9(6));

            (i)         a requirement that Annual Subscribers and Associates inform Lloyd’s if they have become bankrupt, etc (Paragraph 10(2)); and

            (j)         the removal of specific restrictions on the activities of Annual Subscribers contained in old byelaws 75, 76 and 78.

  PART C, paragraphs 11 to 17, is concerned with Substitutes and Representatives of members, agents, brokers and Associates. Among the topics contained in this Part are:

            (a)        the introduction of a new category of person, the “Representative” of a member, underwriting agent, Lloyd’s broker or Associate, for persons not conducting insurance business in person in the Room (Paragraph 12). Substitutes will be limited to those conducting insurance business in person in the Room and thus subject to the Lloyd’s Introductory Test Byelaw;

            (b)        underwriting agents and Lloyd’s brokers as firms rather than their individual directors or partners will have Substitutes or Representatives (Paragraph 13(1) and (2)). This will obviate the need for time and paper consuming changes in Substitutes’ sponsors if the sponsoring director or partner leaves the firm as happens at present;

            (c)        the power of the Council to refuse to admit Substitutes or Representatives if their sponsoring agent or broker has not paid fees in respect of any Substitute or Representative (Paragraph 14(4)); and

            (d)        as with Annual Subscribers and Associates, the Council has power to retain jurisdiction over a Substitute or Representative notwithstanding the proposed removal of his name from the list (Paragraph 17(3)).

  PART D, paragraph 18, covers the admission of Subscribers for Intelligence and other persons to the Room.

  PART E, paragraphs 19 to 21, is concerned with general matters: the power to prescribe fees, rights of appeal and consultation.

  PART F, paragraphs 22 to 24, revokes the old byelaws made under Lloyd’s Act 1871 to 1951, makes consequential amendments to the Underwriting Agents Byelaw (No. 4 of 1984) and contains certain transitional provisions.

  The final part, PART G, (paragraph 25), provides that the byelaw comes into force on 2 July 1993.

111. Membership Byelaw No. 17 of 1993, 8 September 1993

 

COMMENCEMENT

  This byelaw came into force on 8 September 1993.

AMENDMENTS

  This byelaw was amended by

Membership (Amendment) Byelaw (No. 24 of 1993)

Corporate Members (Miscellaneous Amendments) Byelaw (No. 29 of 1993)

Companies’ Accounts (Miscellaneous Amendments) Byelaw (No. 15 of 1994)

Syndicate Accounting Byelaw (No. 18 of 1994)

Membership (Amendment No. 2) Byelaw (No. 12 of 1995)

Membership (Amendment No. 3) Byelaw (No. 17 of 1995)

Appeal Tribunal Byelaw (No. 18 of 1995)

Membership (Amendment No. 3) Byelaw (No. 23 of 1995)

Individual Registration Byelaw (No. 13 of 1996)

New Central Fund Byelaw (No. 23 of 1996)

Membership (Amendment No. 5) Byelaw (No. 42 of 1996)

Agency Agreements (Amendment No. 15) Byelaw (No. 10 of 1997)

Membership (Amendment No. 6) Byelaw (No. 21 of 1997)

Membership (Amendment No. 7) Byelaw (No. 11 of 1998)

Membership, Council and Committee and Annual and Extroadinary General Meetings (Amendment) Byelaw (No. 15 of 1998)

Captive Corporate Members Byelaw (No. 19 of 1998)

Premiums Trust Fund and Regulating Trustee Byelaw (No. 22 of 1998)

Agency Agreements (Amendment No. 20) Byelaw (No. 6 of 1999)

Membership (Amendment No. 8) Byelaw (No. 8 of 1999)

Underwriting Agents (Amendment No. 16) Byelaw (No. 15 of 1999)

Membership (Amendment No. 9) Byelaw (No. 18 of 1999)

Intermediary Amendment Byelaw (No. 10 of 2000)

Lloyd’s Policy Signing Office Byelaw (No. 11 of 2000)

Lloyd’s Claims Byelaw (No. 12 of 2000, 528)

Annual Subscribers Byelaw (No. 15 of 2000)

Lloyd’s Brokers Byelaw (No. 17 of 2000)

Amendment Byelaw (No. 9 of 2001).

EXPLANATORY NOTE

(This note is not part of the byelaw.)

  This byelaw amends and consolidates the provisions of the Membership Byelaw (No. 9 of 1984) as amended.

  It also makes provision for the admission to membership of the Society of corporate members and for such members to underwrite insurance business at Lloyd’s.

Arrangement of paragraphs

PART A—INTERPRETATION

1.         Interpretation

PART B—CLASSES, CONDITIONS AND REQUIREMENTS OF MEMBERSHIP

2.         Categories and classes of membership

3.         Conditions and requirements of membership

4.         Funds at Lloyd’s

5.         Deposits

PART C—ADMISSION TO MEMBERSHIP

6.         Conditions of eligibility

7.         Sponsorship

8.         Introductory commissions

9.         False or misleading statements

10.       [Admission]

11.       Review of [admission]

NOTE

PART D—CONTINUING REQUIREMENTS OF MEMBERSHIP

12.       Corporate member not to carry on other business

13.       Requirement to retain Lloyd’s adviser and to use sponsor

14.       Consent to, and notification of, changes

15.       Corporate member’s declaration

16.       Requirement to file annual returns

17.       Restrictions regarding use of the name of Lloyd’s etc

18.       Compliance by others

19.       Consequences of breach

PART E—UNDERWRITING AT LLOYD’S

20.       Conditions and requirements for underwriting

21.       Setting of premium income limits

22.       Grant of permission to underwrite

23.       No underwriting without permission or in breach of requirements

24.       Power to direct cessation or reduction of underwriting

PART F—SPECIAL PROVISIONS FOR AVOIDANCE OF RISK TO LLOYD’S POLICIES

25.       Restrictions on underwriting

26.       No underwriting otherwise than at Lloyd’s

27.       Concentration in syndicate

28.       Disclosure of concentration in syndicate

29.       Spread of syndicate participation and disclosure

30.       No other person to share underwriting

31.       Members broking at Lloyd’s

PART G—CORPORATE MEMBERS: ACCOUNTING REQUIREMENTS AND AUDITS

32.       Maintenance of accounting records

33.       Accounts

34.       Supplementary statements

35.       Accounts etc. to be examined by auditor

36.       Form of auditors’ reports

37.       Auditors’ undertakings

38.       Rights of auditors

39.       Further examination of accounts and other documents

PART H—RESIGNATION, REVOCATION AND CESSATION OF MEMBERSHIP

40.       Resignation

41.       Cessation for not underwriting

42.       Corporate member not fit and proper

43.       Revocation of membership on conviction of a reportable criminal offence

44.       Notification, procedure and powers incidental to revocation under paragraph 43

45.       Revocation for breach of condition or requirement

46.       Bankruptcy and insolvency

47.       Declaration of war

48.       Consequences of revocation or cessation

PART I—MISCELLANEOUS AND GENERAL

49.       Powers of Society as to set-off and application of funds

50.       Lloyd’s central file of interests in corporate members

51.       Overseas bodies corporate

52.       Power of Council to obtain information

53.       Powers to prescribe etc

54.       Powers of the Council cumulative and exercisable from time to time

55.       Service of notices and legal process

56.       Revocation

57.       Commencement and saving provisions

            SCHEDULE    Interpretation

 

The Council of Lloyd’s in exercise of its powers under section 6(2) of, and paragraphs (1) and (2) of Schedule 2 to, Lloyd’s Act 1982 by special resolution hereby makes the following byelaw.

Part A—Interpretation

1. Interpretation

  The provisions of the Schedule to this byelaw (interpretation) shall have effect.

Part B—Classes, Conditions and Requirements of Membership

2. Categories and classes of membership

  (1) The categories of membership of the Society shall be—

            (a)        underwriting membership; and

            (b)        non-underwriting membership.

  (2) Subject to Schedule 1 to Lloyd’s Act 1982 [and to any other provision of this byelaw], the Council may create such classes of membership within either category as it may think fit, […] may vary, merge or abolish any classes so created [and may make such provision as it may think fit for the transfer of members between the two categories and between any classes so created].

NOTE

  (3) The Council may admit any individual to the Room and other parts of the premises of the Society with the complimentary title of “honorary member”. An honorary member shall have such rights and privileges as the Council may specify but shall not as such be deemed to be a member of the Society for the purposes of Lloyd’s Acts 1871 to 1982 and the byelaws and regulations made thereunder.

3. Conditions and requirements of membership

  (1) Subject to Lloyd’s Acts 1871 to 1982 and the byelaws made thereunder, the Council may prescribe such conditions and requirements to be satisfied or complied with as a condition of admission to membership of the Society, or by members of the Society during membership, as it may think fit, and may add to, alter or withdraw any condition or requirement so prescribed.

  (2) Without prejudice to the generality of sub-paragraph (1), any conditions and requirements under that sub-paragraph—

            (a)        may include the requirement to complete applications, notices and other documents in the prescribed form;

            (b)        may include the requirement to execute and deliver or otherwise become a party to any prescribed form of deed, trust deed, contract, assignment, undertaking, mandate, authority, power of attorney, negotiable instrument or other document or instrument whatsoever;

            (c)        may include requirements relating to the provision of certificates, confirmations, declarations, information, opinions or reports relating to a person applying to be admitted to membership (each such person being referred to in this byelaw as a “candidate”), or [[in the case of a body corporate]] to its directors, managers, controllers […] or connected companies [[or in the case of a Scottish limited partnership to any person who, in relation to that Scottish limited partnership or any general partner]] in the prescribed form and to be given by such other persons as the Council may prescribe or approve;

            (d)        may include requirements relating to the financial position of a member of the Society [, his controllers or connected companies];

NOTE

            (e)        may make provision as to the assets, liabilities and other matters to be taken into account in determining the financial position of a member of the Society, and the extent to which and the manner in which they are to be taken into account, for the purposes of such conditions and requirements;

            (f)         may require a member of the Society to hold assets of such descriptions and in such amounts or of such value as may be specified or determined in accordance with such conditions and requirements;

            (g)        may include the requirement to provide security in respect of underwriting business at Lloyd’s in such form and manner and for such period as may be specified;

            (h)        may make provision for ensuring that, in such circumstances and to such an extent as may be specified, the assets of a member of the Society are maintained in such places and held under such terms as may be specified;

            (i)         may prohibit a member of the Society [[or any general partner of a Scottish limited partnership]] from incurring liabilities of such descriptions, or in favour of, or by way of guarantee or indemnity for, such persons or classes of person, as may be specified.

NOTE

  (3) Without prejudice to the generality of sub-paragraph (1), any conditions and requirements prescribed under that sub-paragraph—

            (a)        may impose requirements which are absolute or which are to vary from time to time by reference to such factors as are specified in or determined in accordance with such conditions and requirements;

            (b)        may make different provision for different classes of members of the Society and different classes of insurance business at Lloyd’s;

            (c)        may make different provision for [bodies corporate, Scottish limited partnerships and individuals];

            (d)        may specify circumstances in which a member of the Society is to be exempt from any such condition or requirement or may be excused from compliance with any such condition or requirement to such an extent as the Council may think fit;

            (e)        may contain incidental, supplementary and transitional provisions.

NOTE

  (4) In exercise of its powers under this paragraph, the Council may at any time require—

            [[(a)      any controller, director or manager of a candidate or corporate member which is a body corporate;

            (b)        any person who, in relation to a Scottish limited partnership which is a candidate or corporate member, is a specified person;

to execute (and may require the candidate or corporate member to procure that he execute) an undertaking in favour of the Council in a prescribed form.]

to execute (and may require the candidate or corporate member to procure that he execute) an undertaking in favour of the Council in a prescribed form.

NOTE

  (5) Any undertaking in a form prescribed for the purposes of sub-paragraph (4) may include terms to the effect that the person giving the undertaking—

            (a)        submits to the jurisdiction of the Council;

            (b)        will, both while he remains a controller, director […] or manager of the body corporate concerned [[or, in relation to a Scottish limited partnership, while he remains a specified person in relation to that Scottish limited partnership (as the case may be)]] and at all times thereafter, provide to the Council such information, explanations, documents and other material relating to the corporate member or its business of insurance at Lloyd’s or to any persons involved in or connected with such business or any other information, explanations, documents or other material which the Council may consider necessary or appropriate to be given or produced.

NOTE

  (6) In exercise of its powers under this paragraph, the Council may at any time require a person who controls more than one corporate member and each corporate member which that person controls to execute (and may require such corporate members or any one of them to procure that the controller execute) an undertaking in favour of the Council in a prescribed form, which may include terms to the effect that—

            (a)        each corporate member shall make, and the controller shall procure that each shall make, contributions to the Central Fund [or the New Central Fund] in such circumstances and of such amounts as may be specified in the undertaking;

            (b)        each corporate member shall, and the controller shall procure that it shall, at the direction of the Council, cease underwriting insurance business at Lloyd’s or reduce the level of insurance business underwritten by it at Lloyd’s to a level specified by the Council iun such circumstances as may be specified in the undertaking.

NOTE

  [(6A) In exercise of its powers under this paragraph, the Council may require a [[…]] controller of, a corporate member to execute all or any of the following:

            (a)        an undertaking (which may be limited in amount) that it will, if the corporate member fails to pay any of its creditors or any of its creditors falling within a class specified in the undertaking, pay such creditors;

            (b)        an undertaking (which may be limited in amount) that it will ensure that the corporate member complies at all times with the requirements relating to funds at Lloyd’s made under this byelaw;

            (c)        an undertaking that all or specified classes of debt owed to that person or to any connected company of that person will rank behind debts owed to other creditors of the corporate member or other creditors of that corporate member of a class specified in the undertaking.

NOTE

  (6B) In exercise of its powers under this paragraph, the Council may at any time require a corporate member which is controlled by another member and which is a party to an approved conversion agreement with that other member to execute an undertaking in favour of the Council in a prescribed form, which may include terms to the effect that the corporate member shall:

            (a)        make contributions to the Central Fund [or the New Central Fund] in such circumstances and of such amounts as may be specified in the undertaking;

            (b)        at the direction of the Council, cease underwriting insurance business at Lloyd’s or reduce the level of insurance business underwritten by it at Lloyd’s to a level specified by the Council in such circumstances as may be specified in the undertaking.]

NOTE

  [(6C) In exercise of its powers under this paragraph, the Council may at any time require one or more controllers or connected companies of a captive corporate member to provide an undertaking, guarantee or other instrument in the prescribed form, which may include terms to the effect that those controllers or connected companies shall pay on demand to the Society or such person as the Society may direct, all sums due and payable (but unpaid) by the captive corporate member in connection with its underwriting at Lloyd’s, in such circumstances as may be specified in the undertaking.]

NOTE

  (7) An application for membership of the Society shall be lodged with an authorised person, within such time limit for such application (if any) and in accordance with such procedures as may be prescribed by the Council.

  (8) The Council may by notice in writing at any time require any member of the Society to provide to the Council within such time as may be specified a statement in the prescribed form in order to demonstrate whether or not he meets any financial conditions and requirements made under sub-paragraph (1) and for the time being applicable to him and may require that statement to be certified or verified by his auditor or any other person approved by the Council.

  (9) Subject to sub-paragraph (10), every member of the Society shall at all times comply with all conditions and requirements prescribed under this paragraph for the time being applicable to him.

  (10) Without prejudice to the following provisions of this byelaw for requiring an underwriting member to cease or reduce the level of his underwriting at Lloyd’s, no member of the Society shall be excluded from membership for breach of any condition or requirement falling within sub-paragraph (9), or of any undertaking given pursuant thereto, where that breach or failure consists solely of his inability to satisfy a financial qualification contained in that condition, requirement or undertaking, which was not applicable on the date when he became an underwriting member or, where he has subsequently increased the level of his underwriting, on the date when his application to do so was duly accepted.

  [(11) In sub-paragraph (6B), “approved conversion agreement” has the meaning given in Schedule 1 to [[The Conversion and Related Arrangements Byelaw (No. 22 of 1996, 329)]].]

NOTE

4. Funds at Lloyd’s

  (1) The conditions and requirements prescribed by the Council under paragraph 3 may include the requirement that members of the Society provide security in respect of their underwriting business at Lloyd’s in all or any of the forms described in sub-paragraph (2) (“funds at Lloyd’s”).

  (2) For the purposes of this byelaw, funds at Lloyd’s may comprise the following, subject to any deductions which the Council may prescribe—

            (a)        in respect of general business—

            (i)         Lloyd’s deposits;

            (ii)         special reserve funds or such parts or proportions thereof as the Council may prescribe;

            (iii)        personal reserve funds or such parts or proportions thereof as the Council may prescribe;

            (b)        in respect of long term business, Lloyd’s life deposits; and

            (c)        in either case—

            (i)         any additional Lloyd’s deposits; and

            (ii)         any other items or allowances (or such parts or proportions thereof as the Council may prescribe) which the Council may approve for the purpose and being in such form and held on such terms and by such persons as the Council may specify;

and may differ in respect of different classes of members of the Society.

5. Deposits

(1) Lloyd’s deposit

  The conditions and requirements prescribed by the Council under paragraph 3 may include the payment, transfer or provision by or for the benefit of a member to the Society or such other person as the Council may prescribe, or the procurement thereof, of such sums, investments, guarantees or letters of credit having such aggregate value and being in such form as the Council shall prescribe (the “Lloyd’s deposit”). The Lloyd’s deposit shall be held by the Society or such other person as the Council may specify as trustee upon and subject to the terms of such trusts as shall be so prescribed and of any directions which may be made by the Council.

(2) Lloyd’s life deposit

  The conditions and requirements prescribed by the Council under paragraph 3 may, in the case of underwriting members wishing to commence or continue underwriting long term business, include the payment, transfer or provision by or for the benefit of a member to the Society or such person as the Council may prescribe, or the procurement thereof, of such sums, investments, guarantees or letters of credit having such aggregate value and being in such form as the Council shall prescribe (the “Lloyd’s life deposit”). The Lloyd’s life deposit shall be held by the Society or such other person as the Council may specify as trustee upon and subject to the terms of such trusts as shall be so prescribed and of any directions which may be made by the Council.

(3) Additional Lloyd’s deposit

  The conditions and requirements prescribed by the Council under paragraph 3 may include the payment, transfer or provision by or for the benefit of a member to the Society or such other person as the Council may prescribe, or the procurement thereof, of such sums, investments, guarantees or letters of credit having such aggregate value and being in such form as the Council shall prescribe (the “additional Lloyd’s deposit”). The additional Lloyd’s deposit shall be held by the Society or such other person as the Council may specify as trustee upon and subject to the terms of such trusts as shall be so prescribed and of any directions which may be made by the Council.

  (4) Without prejudice to the generality of sub-paragraph (3), the Council may at any time require a member of the Society to provide an additional Lloyd’s deposit where—

            (a)        the sums, investments, guarantees or letters of credit comprising his Lloyd’s deposit or Lloyd’s life deposit have fallen in value below the required aggregate value; or

            (b)        the member—

            (i)         changes his country of residence, or his nationality, or his domicile (except where the change is from one member state of the European Economic Community to another);

            (ii)         increases his overall premium limit, general business premium limit, long term business premium limit or any class premium limit or mem-

            ber’s syndicate premium limit for the time being applicable to him.

  (5) Except with the prior consent of the Council, no asset shall be transferred into a Lloyd’s deposit, a Lloyd’s life deposit or an additional Lloyd’s deposit unless that asset is then legally and beneficially owned by the person so transferring it and is free from any lien, charge or encumbrance.

  (6) No underwriting member shall at any time without the prior written consent of the Council, and then only subject to such terms and conditions as the Council may impose, charge or assign or agree to charge or assign, or otherwise restrict, encumber or dispose of any interest in the whole or any part of any Lloyd’s deposit, Lloyd’s life deposit, additional Lloyd’s deposit or any other fund established by him as security for the payment of his underwriting liabilities.

  (7) No asset forming part of the Lloyd’s deposit, the Lloyd’s life deposit or the additional Lloyd’s deposit of an underwriting member shall be transferred to him or to his order unless—

            (a)        in the case of a proposed transfer of an asset forming part of his Lloyd’s deposit, the Council is satisfied that his liabilities arising out of or in connection with any general business at Lloyd’s have been satisfied, discharged or finally provided for or that the balance remaining of his Lloyd’s deposit and any applicable additional Lloyd’s deposit will be sufficient to meet those liabilities;

            (b)        in the case of a proposed transfer of an asset forming part of his Lloyd’s life deposit, the Council is satisfied that his liabilities arising out of or in connection with any long term business at Lloyd’s have been satisfied, discharged or finally provided for or that the balance remaining of his Lloyd’s life deposit and any applicable additional Lloyd’s deposit will be sufficient to meet those liabilities;

            (c)        in the case of a proposed transfer of an asset forming part of an additional Lloyd’s deposit, the Council is satisfied that his liabilities arising out of or in connection with any general business at Lloyd’s (where the additional Lloyd’s deposit has been provided in connection with general business) or with any long term business at Lloyd’s (where the additional Lloyd’s deposit has been provided in connection with long term business) have been satisfied, discharged or finally provided for or that the balance remaining of his Lloyd’s deposit (as the case may be) and any applicable additional Lloyd’s deposit will be sufficient to meet those liabilities.

Part C—Admission to Membership

6. Conditions of eligibility

  (1) Subject to the provisions of this Part, either an individual or a body corporate [or Scottish limited partnership] shall be eligible as a member of the Society.

  (2) No partnership [other than a Scottish limited partnership] shall be eligible as a member of the Society.

NOTE

  (3) A person shall not be eligible as a member of the Society unless—

            (a)        the Council is satisfied that he complies or is able to comply with the conditions and requirements prescribed under paragraph 3 applicable to him; and

            (b)        the Council is satisfied that he is a fit and proper person to be a member of the Society.

  (4) Without prejudice to the generality of sub-paragraph (3), in deciding whether a body corporate is fit and proper to be or remain a corporate member, the Council may have regard to the following criteria—

            (a)        the character and suitability of the directors (both individually and collectively) for the time being of the body corporate;

            (b)        the sufficiency in number of the directors of the body corporate and of the directors who have experience of business at Lloyd’s;

            (c)        the reputation, financial standing, character and suitability of any person […] who controls the body corporate;

            (d)        the reputation and financial standing of any connected company of the body corporate;

            (e)        the reputation, character and suitability of any director of or partner in any person who controls the body corporate;

            (f)         the reputation, character and suitability of any director or controller of […] a connected company of the body corporate;

            (g)        whether any manager of the body corporate, or any other person who works for the body corporate is, having regard to his character and suitability, a person who should be a manager of a corporate member or (as the case may be) should work for a corporate member in a capacity which includes his proposed functions;

            (h)        the adequacy of the capital of the body corporate;

            (i)         the location of the accounting and other records of the body corporate;

            (j)         any conditions imposed or which may be imposed under paragraph 10(3);

            (k)        any other matters which in the opinion of the Council should be taken into account in deciding whether a body corporate is fit and proper to be a corporate member.

NOTE

  [4(A) Without prejudice to the generality of sub-paragraph (3), in deciding whether a Scottish limited partnership is fit and proper to be or remain a corporate member, the Council may have regard to the following:

            (a)        the character and suitability of the directors (both individually and collectively) for the time being of any general partner;

            (b)        the sufficiency in number of the directors of any general partner and of those directors who have experience of business at Lloyd’s;

            (c)        the reputation, financial standing, character and suitability of any person who controls the Scottish limited partnership or any general partner;

            (d)        the reputation and financial standing of any connected company of the Scottish limited partnership or any general partner;

            (e)        the reputation, financial standing, character and suitability of any director of or partner in any person who controls the Scottish limited partnership or any general partner;

            (f)         the reputation, character and suitability of any management company;

            (g)        the reputation, character and suitability of any director or controller of a connected company of the Scottish limited partnership or the general partner;

            (h)        whether any manager of any general partner, or any other person who works for the general partner is, having regard to his character and suitability, a person who should be a manager of a general partner of a Scottish limited partnership or (as the case may be) should work for a general partner of a Scottish limited partnership in a capacity which includes his proposed functions;

            (i)         the adequacy of the capital of each of the Scottish limited partnership and any general partner;

            (j)         the location of the accounting and other records of the Scottish limited partnership and any general partner;

            (k)        any conditions imposed or which may be imposed under paragraph 10(3);

            (l)         any other matters which in the opinion of Council should be taken into account in deciding whether the Scottish limited partnership is fit and proper to be a corporate member.]

NOTE

  [(5) Without prejudice to the generality of sub-paragraph (4)—

            (a)        in considering the reputation of any controller or connected company of a corporate member which carries on business at Lloyd’s (whether as an approved run-off company, [[…]] Lloyd’s broker, coporate member, underwriting agent or otherwise) the Council may take into account whether the record of the controller or connected company in complying with any applicable requirements of Lloyd’s is satisfactory; and

            (b)        in considering the suitability of a person […] who controls the corporate member, the Council may take into account whether permitting that person to be or remain a […] controller of, that corporate member could place any managing agent of which that person is a […] controller in a position where its interests are likely significantly to conflict with the duties which that managing agent owes to members under agreements with them or under the general law.

NOTE

  (6) In sub-paragraph (5)—

            (a)        “requirements of Lloyd’s” means the requirements of Lloyd’s Acts 1871 to 1982, requirements imposed by any byelaw or regulation made under those Acts, conditions or requirements imposed or directions given under any such byelaw or regulation, directions given under section 6 of Lloyd’s Act 1982, requirements imposed by or under any undertaking given to the Society or the Council, requirements imposed or directions given by the Council and any codes of practice from time to time promulgated or made by the Council; and

            (b)        “[…] controller” has the meaning given in the Underwriting Agents Byelaw (No. 4 of 1984, 101).]

NOTE

7. Sponsorship

  (1) Every candidate shall be sponsored by such person or persons (each a “sponsor”) and in such manner as the Council may determine.

  (2) The Council may by notice in writing at any time require any of the persons listed in sub-paragraph (3) to provide the Council with such information as it may require in relation to the sponsorship of candidates by that person.

  (3) The persons referred to in sub–paragraph (2) are the following—

            (a)        an annual subscriber;

            (b)        [[…]];

            (c)        […];

            (d)        a Lloyd’s broker;

            (e)        a member of the Society;

            (f)         an underwriting agent;

            (g)        a director of, or partner in, a […] Lloyd’s broker or underwriting agent;

            (h)        a person who works for a […] Lloyd’s broker or underwriting agent whether under a contract of service or for services or otherwise; or

            [(ha)     a registered individual;]

            (i)         a person approved by the Council under sub-paragraph (1) to act as a sponsor.

NOTE

8. Introductory commissions

  (1) Immediately upon any of the persons listed in sub-paragraph (6) giving, or agreeing to give, or intending to give, or receiving or becoming entitled to receive, in any such case whether directly or indirectly, an introductory commission, that person

shall disclose full particulars of such introductory commission (including the amount or basis of calculation thereof) in writing to the Council and to the candidate concerned.

  (2) In addition to the disclosure required by sub-paragraph (1), where a [[…]] sponsor or underwriting agent has given, or agreed to give, or intends to give, in any such case whether directly or indirectly, an introductory commission to any person in respect of a candidate, that [[…]] sponsor or underwriting agent shall, at the first relevant meeting, disclose full particulars of such introductory commission (including the amount or basis of calculation thereof) in writing to the candidate.

  (3) The Council may by notice in writing at any time require any of the persons listed in sub-paragraph (6) to provide the Council with such information as it shall require in relation to the introduction of candidates by that person.

  (4) Every candidate shall disclose in his application for membership details of any introductory commission which he has given or agreed to give or intends to give, whether directly or indirectly, to any person introducing him or to any of his sponsors or otherwise in connection with his membership.

  (5) For the purposes of this paragraph a first relevant meeting is the first meeting between a candidate or, in the case of a candidate which is or will be a body corporate, a director, proposed director or promoter of that body corporate and any of the persons listed in sub-paragraph (7) which satisfies the following conditions—

            (a)        it has been previously arranged; and

            (b)        has as its dominant purpose either—

            (i)         the consideration of the candidate becoming a member of the Society; or

            (ii)         the consideration of the candidate entering into or any agreement with any [[…]] for the provision of advisory services relating to underwriting insurance business at Lloyd’s or an agreement with any underwriting agent in the terms of any standard agreement.

  (6) The persons referred to in sub-paragraphs (1) and (3) are the following—

            (a)        an annual subscriber;

            (b)        [[[…]]];

            (c)        [[…]];

            (d)        a Lloyd’s broker;

            (e)        a member of the Society;

            (f)         an underwriting agent;

            (g)        a director of, or partner in, a Lloyd’s broker, underwriting agent [[…]];

            (h)        a person who works for a Lloyd’s broker, underwriting agent [[…]] whether under a contract of service or for services or otherwise;

            (i)         a person approved by the Council under paragraph 7(1) to act as a sponsor;

            [(j)        a registered individual].

NOTE

  (7) The persons referred to in sub-paragraph (5) are the following—

            (a)        […]

            (b)        an underwriting agent;

            (c)        a director of, or partner in, an underwriting agent or […];

            (d)        a person who works for an underwriting agent or […] whether under a contract of service or for services or otherwise;

            (e)        a person approved by the Council under paragraph 7(1) to act as a sponsor [;

            (f)         a registered individual].

NOTE

9. False or misleading statements

  (1) No candidate shall make, or knowingly permit to be made on his behalf, any false or misleading statement in respect of his application for membership of the Society.

  (2) Failure by a candidate to comply with the provisions of sub-paragraph (1) shall if that candidate becomes a member of the Society constitute misconduct by that candidate for the purposes of the Misconduct, Penalties and Sanctions Byelaw (No. 9 of 1993).

10. [Admission]

  (1) [Admission] to membership of the Society shall be as determined by the Council.

  (2) In considering whether or not to [admit] a candidate as a member of the Society the Council shall make such enquiries as it thinks fit and may receive and take account of information, documents or other material from any source whatever relating to the candidate or any such person as is referred to in paragraph 6(4).

  (3) In [admitting] a candidate which is a body corporate [[or Scottish limited partnership]] to membership of the Society, or following a review under paragraph 11, without prejudice to the generality of paragraph 3, the Council may impose such conditions as are in its view necessary or desirable to ensure—

            (a)        that the body corporate [[or Scottish limited partnership]] is or will continue to be fit and proper to be a member of the Society; and

            (b)        that the body corporate [[or Scottish limited partnership]] will or will continue to comply with the requirements of Lloyd’s Acts 1871 to 1982, the byelaws and regulations made under those Acts and any conditions and requirements imposed or direction given under any such byelaw or regulation and for the time being applicable to it and any agreement, instrument or undertaking to which it is a party pursuant to such conditions, requirements and directions.

NOTE

11. Review of [admission]

  (1) The Council may at any time conduct a review of a corporate member’s [admission] under this byelaw for the purpose of determining whether the corporate member in question continues to be eligible for membership.

  (2) In connection with any such review the Council may require that the corporate member—

            (a)        provide such documents and information as the Council may specify; and

            (b)        comply with such requirements as the Council may determine relating to the procedures for conducting any such review.

NOTE

Part D—Continuing Requirements of Membership

12. Corporate member not to carry on other business

  (1) [Subject to sub-paragraph (4), no] corporate member shall—

            (a)        carry on any business or activity other than its underwriting business at Lloyd’s and such activities as are directly ancillary to that business; or

            (b)        enter into contracts or otherwise incur any liabilities (including contingent liabilities) or acquire, hold or dispose of property other than for the purposes of the business and activities described in sub-paragraph (1)(a).

  (2) Without prejudice to the generality of sub-paragraph (1) [(but subject to sub-paragraph (4))], no corporate member shall hold or acquire any interest in securities of—

            (a)        any other corporate member;

            (b)        any person who controls a corporate member; or

            (c)        any [[…]], Lloyd’s broker or underwriting agent.

  (3) Without prejudice to the generality of sub-paragraph (1), no corporate member shall underwrite on its own account and in any manner howsoever insurance business of any kind except at Lloyd’s.

  [[(4) A corporate member may acquire and then hold an interest in securities of any other corporate member and/or any person who controls a corporate member—

            (a)        if such acquisition and holding is in consequence of the corporate member accepting an invitation to participate in a surrender arrangement or share swap arrangement which complies with the conditions and requirements made under paragraph 5(1) of the Conversion and Related Arrangements Byelaw (No. 22 of 1996) for the time being in force; or

            (b)        with the prior written consent of the Council.]]

NOTE

[13. Requirement to retain a members’ agent and to use a sponsor

  (1) Unless the Council otherwise agrees, a corporate member shall appoint and at all times retain a members’ agent (whether or not designated a corporate adviser) to act in respect of its underwriting business at Lloyd’s.

  (2) The corporate member shall, at such time or times as the Council may require, make use of the services of the person who acted as its sponsor when it was a candidate or such other person as the Council may approve for the purpose.]

NOTE

14. Consent to, and notification of, changes

  (1) No person shall, without the prior written consent of the Council—

            (a)        be a controller of […] a corporate member;

            (b)        be a controller of two or more corporate members.

NOTE

  (2) No corporate member shall, without the prior written consent of the Council, cause or permit any of the events listed below to occur—

            [(a)       in the case of a body corporate, the appointment of a person as a director of the corporate member;

            (b)        in the case of a body corporate, a merger between the corporate member and another body corporate;]

            (c)        the appointment of itself as a director of another corporate member;

            (d)        an insolvency event;

            (e)        any event requiring the agreement of the Council under any other paragraph of this byelaw, or any conditions and requirements prescribed by the Council under any other paragraph of this byelaw;

            (f)         any other event which the Council may prescribe for the purposes of this sub-paragraph.

NOTE

  [(2A) A corporate member [[which is a body corporate]] shall, so far as it lies within its powers, procure that no person who is a controller of the corporate member shall acquire a notifiable holding in the corporate member unless:

            (a)        that person has given notice to the Council stating that he intends to acquire a notifiable holding in that corporate member and containing such particulars as the Council may require; and

            (b)        either the Council has, before the expiry of the period of three months beginning with the date of service of the notice (or of such longer period beginning with that date as the Council may, before the expiry of the three month period, notify to him), notified him in writing that there is no objection to his proposed acquisition or that period has expired without the Council having served a written notice of objection.]

NOTE

  (3) A member shall promptly notify the Council in writing of the occurrence of any of the following together, in each case, with such information as the Council may prescribe—

            (a)        in the case of an individual member, a decision to change his country of residence or his nationality or his domicile;

            (b)        in the case of a corporate member—

            (i)         a director of the member ceasing to be a director;

            (ii)         its becoming aware that a person has ceased or is proposing to cease to be a […] controller of that member;

            (iii)        the appointment by that member of an auditor;

            (iv)        an auditor of that member vacating office;

            (v)        a decision to change the date to which the accounts of the member are prepared;

            (vi)        a change in the date to which group accounts of any controller or holding company of the member which are required to be sent to the Society by paragraph 16 are prepared;

            (vii)       any change in its constitution;

            (viii)      a decision to appoint or terminate the appointment of any agent appointed by the member for service of notices under paragraph 54;

            (ix)        a decision to reduce its issued share capital or any part thereof;

            (c)        in the case of any member—

            (i)         the occurrence of any insolvency event in relation to that member;

            (ii)         a material change in any information furnished to the Council in connection with an application by that member for membership or in connection with a review under paragraph 11 of the [admission] of that member and not required to be disclosed under any other provision of this paragraph.

            (iii)        any other event which the Council may prescribe for the purposes of this sub-paragraph.

NOTE

  (4) If a member of the Society or, to its knowledge, a person who is a controller, director or manager of a corporate member [[which is a body corporate or a person who is a specified person in relation to a Scottish limited partnership]] […] is convicted of a reportable criminal offence by a court in the United Kingdom or elsewhere that member shall—

            (a)        as soon as possible, and in any event within 30 days after the date of conviction or its becoming aware of the conviction (as the case may be), give to the officer or employee of the Society nominated for that purpose written notice of the offence of which he was convicted, the sentence imposed, the name and address of the court and the date of the conviction; and

            (b)        provide such additional information, documents or other materials relating to the convictions as the Council may direct.

NOTE

  (5) If a corporate member or a person whose accounts are required to be sent to the Society by paragraph 16(3) prepares quarterly or half yearly financial statements which, in the case of a person other than the corporate member, are accounts into which the results of the corporate member are consolidated, the corporate member shall send to the Society a copy of such financial statements, together with a translation of those statements into English, if they have been prepared in another language.

  (6) The Council may, on granting its consent under sub-paragraph (1) or (2) [or giving its approval under sub-paragraph (2A),] impose such conditions and requirements as it thinks fit.

NOTE

  (7) Without prejudice to the generality of sub-paragraph (6), any conditions and requirements imposed under that sub-paragraph may include the requirement to give undertakings which—

            (a)        in the case of a consent sought under sub-paragraph (1)(a) or 2(a), may include undertakings in the terms set out in paragraph 3(5);

            (b)        in the case of a consent sought under sub-paragraph (1)(b), may include undertakings on the part of the proposed controller and each corporate member which it controls or proposes to control in the terms set out in paragraph 3(6).

  (8) When applying for the Council’s consent under sub-paragraph (1) or (2) [[or making a notification under sub-paragraph (2A),]] the person making the application [or notification (as the case may be)] shall [pay to the Society such fee as the Council may prescribe and] supply the Council with such additional information, documents or other material as the Council may specify.

NOTE

  (9) Where sub-paragraph (3)(b)(iv) applies, the member shall also send to the Council a copy of any representations made, notice given or statement made by the auditor of the member (under section 391A(3), 392(1) or 394(1) of the Companies Act 1985 or otherwise) on or in connection with the auditor vacating office.

  (10) In sub-paragraph (5), “financial statements” means any balance sheet and profit and loss account prepared by a person for publication (whether to shareholders or otherwise), registration or filing.

15. Corporate member’s declaration

  (1) Every corporate member shall, as at a date prescribed by the Council, prepare a declaration (a “declaration of compliance”), complying with the following provisions of this paragraph.

  (2) A declaration of compliance shall contain—

            (a)        such statements and information as regards—

            (i)         the assets and liabilities;

            (ii)         the funds at Lloyd’s; and

            (iii)        the member’s syndicate premium limits set under paragraph 21(4);

                        of the corporate member as the Council may prescribe;

            (b)        a statement that the corporate member has adequate working capital to ensure the continuation of its business as a going concern for the period of 12 months immediately following the date as at which the declaration of compliance is made;

            (c)        a statement that the corporate member has complied with paragraph 14 throughout the preceding period of one year;

            (d)        the names and addresses of each controller and director of […] the corporate member and of any connected persons who make him a controller; and

            (e)        such other statements, warranties or undertakings as the Council has prescribed under paragraph 20 or otherwise.

NOTE

  (3) The statements referred to in sub-paragraph (2) may, unless otherwise required by the Council, be expressed to be made to the best of the knowledge, information and belief of the persons signing the statement, but in that event the declaration of compliance shall also state that those persons have made all reasonable enquiries as to the matters to which the declaration of compliance relates.

  (4) If any statement required by sub-paragraph (2) regarding compliance by the corporate member with any requirement cannot be made without qualification, the declaration of compliance shall contain full particulars of each failure by the corporate member to comply with the relevant requirement and shall state that it has complied with the relevant requirement in all other respects.

  (5) A declaration of compliance shall be accompanied by—

[. . .] any legal opinion or confirmation of a legal opinion given previously in respect of that member in the prescribed form and given by a legal adviser approved by the Council [. . . .]

NOTE

  (6) A declaration of compliance shall be signed by such officer or officers of the corporate member as the Council may specify.

  (7) There shall be sent to the Society within the prescribed period after the date to which the declaration of compliance is made up—

            (a)        the declaration of compliance;

            (b)        any auditor’s report required under paragraph 35 in relation to it;

            (c)        the legal opinion referred to in sub-paragraph (5)(a) [. . . .].

           

NOTE

16. Requirement to file annual returns

  (1) Every corporate member shall, within the prescribed period after each date to which its accounts are made up, send to the Society a return (an “annual return”) comprising the documents specified in sub-paragraph (2), together, in the case of any document which has been prepared in a language other than English, with a translation of that document.

  (2) The documents referred to in sub-paragraph (1) are—

            (a)        a copy of the accounts of the corporate member required by Part VII of the Companies Act 1985 or paragraph 33(1) or the legislation referred to in paragraph 33(2)(b) (as the case may be);

            (b)        if the Council so requires, any supplementary statements prepared under paragraph 34;

            (c)        the auditor’s reports required by paragraph 35 in relation to the documents referred to in (a) and, where relevant, (b).

  (3) A corporate member shall, within the prescribed period after each date to which its controller and, if different, holding company prepares group accounts under section 229 of the Companies Act 1985 (or, if its controller or holding company is not subject to that section, such group accounts (if any) as its controller or holding company is required to prepare under the law of its place of incorporation) send to the Society a copy of the group accounts made up to that date together with translation of those accounts into English if they have been prepared in another language.

  (4) The obligation in sub-paragraph (3) shall not apply to any corporate member whose results are not consolidated into the accounts concerned.

  (5) A body corporate which is entitled to the benefit of any exemption in sections 246 to 249 of the Companies Act 1985 or any exemption under legislation implementing Article 6 of the Seventh Council Directive (83/349/EEC), as amended from time to time, shall not rely on it in relation to accounts to be sent to the Society under sub-paragraphs (1) and (3).

17. Restrictions regarding use of the name of Lloyd’s etc

  (1) No corporate member shall, without the written consent of the Council, use the word “Lloyd’s” in its name or in any business or trading name it may adopt.

  (2) No member of the Society shall, without the written consent of the Council, conduct himself or his business, use the word “Lloyd’s” or the Society’s address or describe himself as a member of the Society in such a way as to imply that his affairs or any aspect of them have the approval of the Society.

18. Compliance by others

  (1) A corporate member shall procure compliance by its directors, managers and employees with any obligations imposed on them by the Council relating to its membership of Lloyd’s.

  (2) A corporate member shall take reasonable steps—

            (a)        to procure that persons not falling within sub-paragraph (1) keep the corporate member informed so that the corporate member is able to comply with its obligations under this byelaw and themselves perform any obligations imposed on them by the Council and relating to the corporate member’s membership of Lloyd’s; and

            (b)        to prevent any matter falling within paragraphs 14(1) and (2) from arising or taking place unless the written consent of the Council has first been obtained.

  (3) For the purposes of this paragraph, obligations shall be treated as imposed on a person by the Council if he is required to perform them by any byelaw or regulation made under Lloyd’s Acts 1871 to 1982, any condition or requirement imposed or direction given under any such byelaw or regulation, any direction given under section 6 of Lloyd’s Act 1982, any requirement imposed by or under any agreement between him, or any undertaking by him, in favour of the Society or the Council or any other requirement imposed or direction given by the Council under Lloyd’s Acts 1871 to 1982.

19. Consequences of breach

  (1) Any of the following shall constitute grounds on which the Council may exercise the powers referred to in sub-paragraph (2)—

            (a)        any breach of—

            (i)         any provision of this Part D;

            (ii)         any condition or requirement imposed by the Council under paragraph 10(3) or 14(6); or

            (iii)        any term of any agreement or undertaking entered into or given pursuant to such a condition or requirement; and

            (b)        the inclusion of any false, misleading or inaccurate statement or information in any statement, declaration or information provided to the Council under any such provision, condition, requirement, or undertaking.

  (2) The powers referred to in sub-paragraph (1) are—

            (a)        its powers under paragraph 24 (and that paragraph shall apply as though a breach falling within sub-paragraph (1) of this paragraph were a breach of a condition or requirement prescribed by the Council under paragraph 20);

            (b)        its powers under paragraph 42; or

            (c)        any other power which the Council considers it appropriate to exercise in the circumstances.

Part E—Underwriting At Lloyd’s

20. Conditions and requirements for underwriting

  (1) The Council may prescribe such conditions and requirements to be complied with by underwriting members who wish to commence or to continue to underwrite insurance business at Lloyd’s as it may consider appropriate, and may add to, alter or withdraw any condition or requirement so prescribed.

  (2) Without prejudice to the generality of sub-paragraph (1), any conditions or requirements prescribed under that sub-paragraph—

            (a)        may include the requirement to complete applications, notices and other documents in the prescribed form;

            (b)        may include the requirement to execute and deliver or otherwise become a party to any prescribed form of deed, trust deed, contract, assignment, undertaking, mandate, authority, power of attorney, negotiable instrument or other document or instrument whatsoever;

            (c)        may include requirements that an underwriting member’s underwriting agent, Lloyd’s adviser, auditor, sponsor, legal adviser or other adviser provide to the Council, in the prescribed form, such certificates, confirmations, information, opinions or reports to the Council as the Council may require.

  (3) Without prejudice to the generality of sub-paragraph (1), any conditions and requirements prescribed under that sub-paragraph—

            (a)        may differ in respect of different classes of underwriting members and different classes of insurance business at Lloyd’s;

            (b)        may make different provision for [bodies corporate, Scottish limited partnerships and individuals];

            (c)        may specify circumstances in which an underwriting member is to be exempt from any such condition or requirement or may be excused from compliance with any such condition or requirement to such an extent as the Council may think fit;

            (d)        may contain incidental, supplementary or transitional provisions.

  (4) An application for permission to commence underwriting shall be lodged with an authorised person, within such time limit for such application (if any) and in accordance with such procedures as may be prescribed by the Council.

NOTE

21. Setting of premium income limits

  (1) The conditions and requirements prescribed by the Council under paragraph 20—

            (a)        shall include provision for overall premium limits, general business premium limits and long term business premium limits;

            (b)        may include provision for class premium limits or premium limits based on such other factors as the Council thinks fit to be determined in such manner as the Council may specify; and

            (c)        may include, as a condition upon which an underwriting member is permitted to underwrite insurance business through a particular syndicate at Lloyd’s, provision for a member’s syndicate premium limit for that syndicate.

  (2) The conditions and requirements referred to in sub-paragraph (1) may provide that—

            (a)        the level of overall premium limits or of general business premium limits, or both, shall be related to any financial requirements prescribed under paragraph 3 for the underwriting members to whom they apply in such manner as the Council may specify;

            (b)        the level of long term business premium limits shall be related to any financial requirements prescribed under paragraph 3 for the underwriting members to whom they apply in such manner as the Council may specify.

  (3) The aggregate of the general business premium limit and long term business premium limit applicable to an underwriting member for a particular year of account shall not exceed the overall premium limit applicable to him for that year of account.

  (4) Subject to compliance with the requirements of paragraphs 27(1) and 29(1), every underwriting member who proposes to underwrite through a syndicate for a year of account shall, unless the Council has exercised its power under sub-paragraph (1)(c) in respect of that syndicate, set for himself a member’s syndicate premium limit and notify the Council of that limit—

            (a)        in the case of a corporate member, under paragraph 15; and

            (b)        in the case of an individual member, by filing a syndicate list as defined in the Agency Agreements Byelaw (No. 8 of 1988, 310);

unless the Council has prescribed an alternative manner of notification.

  (5) Upon notification of a member’s syndicate premium limit under sub-paragraph (4), the Council may prescribe for the member making the notification a lower member’s syndicate premium limit for any particular syndicate, and if it does so that limit shall apply to the exclusion of any limit set by the underwriting member.

  (6) The aggregate of all member’s syndicate premium limits applicable to an underwriting member for a particular year of account shall not exceed that underwriting member’s overall premium limit for that year of account.

22. Grant of permission to underwrite

  (1) The Council may grant permission to any underwriting member to underwrite insurance business at Lloyd’s.

  (2) Any permission granted under sub-paragraph (1)—

            (a)        may apply indefinitely or for such period as the Council may specify;

            (b)        may be general or may be limited to insurance business of such classes, or insurance business underwritten through such syndicates, as the Council may specify;

            (c)        may be granted subject to such conditions and requirements applicable to the underwriting member concerned as the Council may think fit.

23. No underwriting without permission or in breach of requirements

  (1) No member of the Society shall underwrite insurance business at Lloyd’s unless permitted to do so by the Council under paragraph 22.

  (2) In underwriting insurance business at Lloyd’s, every underwriting member shall comply at all times with all conditions and requirements prescribed and imposed under paragraphs 20 and 22 and for the time being applicable to him and with every other applicable requirement or obligation arising under—

            (a)        Lloyd’s Acts 1871 to 1982 and byelaws and regulations made thereunder; and

            (b)        the Insurance Companies Act 1982 and regulations made thereunder.

24. Power to direct cessation or reduction of underwriting

  (1) Without prejudice to the powers of the Council under Lloyd’s Acts 1871 to 1982 and any byelaw or regulation made thereunder, if it appears to the Council that—

            (a)        [an underwriting member fails to comply with or to satisfy an underwriting requirement applicable to him, or any condition or requirement imposed upon him under the [[Lloyd’s Claims Byelaw (No. 12 of 2000, 528), the]] Central Accounting Byelaw (No. 20 of 1998, 525) or the Lloyd’s Policy Signing Office Byelaw (No. 11 of 2000, 527);]

NOTE

            (b)        the circumstances specified in an undertaking given by an underwriting member which is a corporate member under paragraph 3(6) or 14(7)(b) have arisen; or

            (c)        an underwriting member which is a corporate member is not eligible for membership;

the Council may exercise the powers set out in sub-paragraph (2) in relation to that underwriting member.

  (2) If it appears to the Council that the circumstances in sub-paragraph (1)(a), (b) or (c) have arisen, the Council may direct the underwriting member concerned—

            (a)        to cease underwriting insurance business, or insurance business of a specified class or specified classes, at Lloyd’s, or through a specified syndicate or specified syndicates at Lloyd’s; or

            (b)        to reduce to, or below, such level as may be specified the level of insurance business, or insurance business of a specified class or specified classes, thereafter underwritten by him at Lloyd’s, or through a specified syndicate or specified syndicates at Lloyd’s.

  (3) Any failure by an underwriting member such as is referred to in sub-paragraph (1)(a) shall not of itself constitute misconduct within the meaning or for the purposes of paragraph 1(a), (b) or (c) of the Misconduct, Penalties and Sanctions Byelaw (No. 9 of 1993) (but without prejudice to any other sub-paragraph of that paragraph).

  (4) Any direction given under sub-paragraph (2) may apply for any such period as may be specified in that direction, or until any further direction of the Council, or indefinitely.

  (5) Where the Council proposes to give a direction under sub-paragraph (2) in respect of a failure to comply with or satisfy any such condition or requirement as is referred to in paragraph 21(1), the Council shall consider whether it would not be more appropriate in the circumstances for a direction to be given to the underwriting member concerned under paragraph 25(3)(c).

  (6) Save in circumstances falling within sub-paragraph (1)(b) and save as is provided in sub-paragraph (7), the Council shall, before exercising any power conferred by sub-paragraph (2)—

            (a)        by notice in writing inform the underwriting member concerned of the reasons why the exercise of the power is being considered and of the terms of the proposed direction; and

            (b)        permit that underwriting member to make representations within such period as the Council may require.

  (7) If in the opinion of the Council, any power conferred by sub-paragraph (2) is required to be exercised immediately, the Council may exercise that power without having first taken the steps referred to in sub-paragraph (6).

  (8) In any case falling within sub-paragraph (7) the Council shall—

            (a)        as soon as possible after the direction is given inform the underwriting member to whom it is given of the reasons for the direction; and

            (b)        permit that underwriting member to make representations to the Council within such period as the Council may require;

and where such representations are received, the Council shall reconsider the direction and the exercise of the power under sub-paragraph (2).

  [. . .]

  (10) The Council shall give notice of the terms of any direction made in respect of an underwriting member under sub-paragraph (2) to any relevant members’ agent, […] or managing agent acting on behalf of that underwriting member, and each underwriting agent or […] so notified shall use its best endeavours to ensure compliance with that direction.

NOTE

Part F—Special Provisions for Avoidance of Risk to Lloyd’s Policies

25. Restrictions on underwriting

  (1) For the purpose of ensuring that the security of policies underwritten at Lloyd’s is not prejudiced, the Council may in its discretion exercise the powers of control set out in this paragraph and paragraph 26.

  (2) If at any time it appears to the Council that—

            (a)        a member is in breach of paragraph 26(1), 29(1), 30(1) or 31;

            (b)        a member is in breach of any condition or requirement made under paragraph 26(2) and applicable to him;

            (c)        a managing agent is in breach of paragraph 27(1) or (3), or 28;

            (d)        following a notification under paragraph 27(3) or 28 circumstances so require;

            (e)        the overall premium limit, general business premium limit, long term business premium limit or any class premium limit or member’s syndicate premium limit for the time being applicable to an underwriting member has been or is likely to be exceeded;

            (f)         the amount and spread of a corporate member’s syndicate participation give rise to an unacceptable risk to the Central Fund [or the New Central Fund] and other resources of the Society;

the Council may give such directions as it thinks fit.

NOTE

  (3) Without prejudice to the generality of sub-paragraph (2), such directions may include a direction that a member or members—

            (a)        cease underwriting insurance business, or insurance business of a specified class or specified classes, at Lloyd’s, or through a specified syndicate or specified syndicates at Lloyd’s;

            (b)        reduce to, or below, such level as may be specified the level of insurance business, or insurance business of a specified class or specified classes, thereafter underwritten at Lloyd’s, or through a specified syndicate or specified syndicates at Lloyd’s; or

            (c)        provide within a specified period and maintain additional security in such amount and form and subject to such conditions and requirements as the Council may specify and, or alternatively, show financial resources of such an additional amount as the Council may specify.

  (4) Save as provided in sub-paragraph (5), the Council shall, before exercising any power conferred by sub-paragraph (2)—

            (a)        by notice in writing inform the person or persons to whom any direction is proposed to be given of the reasons why the exercise of the power is being considered and of the terms of the proposed direction; and

            (b)        permit that person or those persons to make representations within such period as the Council may require.

  (5) If in the opinion of the Council the power conferred by sub-paragraph (2) is required to be exercised immediately, the Council may exercise that power without having first taken the steps referred to in sub-paragraph (4).

  (6) In any case falling within sub-paragraph (5) the Council shall—

            (a)        as soon as possible inform the person or persons to whom a direction is given of the reasons for the direction; and

            (b)        permit the person or persons to make representations within such period as the Council may require;

and where such representations are received, the Council shall reconsider the direction and the exercise of the power under sub-paragraph (2).

  (7) Any direction given under sub-paragraph (2) may apply for any such period as may be specified in that direction, or until any further direction of the Council, or indefinitely.

  [. . .]

  (9) The Council shall give notice of the terms of any direction made in respect of an underwriting member under sub-paragraph (2) to any relevant members’ agent, […] or managing agent acting on behalf of that underwriting member, and each underwriting agent or […] so notified shall use its best endeavours to ensure compliance with that direction.

NOTE

26. No underwriting otherwise than at Lloyd’s

  (1) Without the prior written consent of the Council, no individual member who is an underwriting member shall personally or through any agent, whether alone or jointly with any other person or otherwise howsoever, underwrite on his own account insurance business of any kind except at Lloyd’s.

  (2) The Council shall not give its consent for the purposes of sub-paragraph (1) without first prescribing and imposing such conditions and requirements as it may think fit for the purpose referred to in paragraph 25(1) to be complied with by the underwriting member concerned.

  (3) Without prejudice to the generality of the foregoing, any conditions or requirements prescribed under sub-paragraph (2) may include—

            (a)        limits on the insurance business permitted to be underwritten by that underwriting member, and

            (b)        requirements for the provision to the Council of such information relating to such insurance business as the Council may specify.

27. Concentration in syndicate

  (1) Without the prior written consent of the Council, but subject to sub-paragraph (2), no managing agent shall, in any year of account, manage or (as the case may be) continue to manage any syndicate in relation to which—

            (a)        the member’s syndicate premium limit of a single member;

            (b)        the aggregate of the member’s syndicate premium limits of two or more corporate members which are connected companies; or

            (c)        the aggregate of the member’s syndicate premium limits of all members of the syndicate which are corporate members;

exceed the percentages prescribed by the Council of the syndicate allocated capacity of that syndicate.

  (2) There shall be no breach of sub-paragraph (1) where the only reason why any percentage specified for the purposes of (a), (b) or (c) of that sub-paragraph is exceeded is that one or more members of a syndicate have ceased to be members of the syndicate concerned otherwise than at the end of the year.

  (3) Where but for sub-paragraph (2) there would be a breach of sub-paragraph (1), the managing agent shall promptly disclose to the Council in writing such information as the Council may prescribe for the purposes of this sub-paragraph.

  [(4) In exercising its powers under sub-paragraph (1), the Council may set:

            (i)         different percentages in respect of different classes of member; and

            (ii)         different percentages in respect of syndicates which carry on different classes of business.]

NOTE

28.  Disclosure of concentration in syndicate

  Where, in respect of any syndicate for a particular year of account—

            (a)        the member’s syndicate premium limit of a single member; or

            (b)        the aggregate of the member’s syndicate premium limits of two or more corporate members which are connected companies;

exceed the percentages prescribed by the Council of the syndicate allocated capacity of a syndicate, the managing agent of that syndicate shall promptly disclose to the Council in writing such information as the Council may prescribe for the purposes of this paragraph.

29. Spread of syndicate participation and disclosure

  (1) Without the prior written consent of the Council, but subject to sub-paragraph (2), no underwriting member may have a member’s syndicate premium limit for any syndicate which exceeds a percentage prescribed by the Council of that member’s overall premium limit.

  (2) There shall be no breach of sub-paragraph (1) where the only reason why the percentage specified for the purposes of that sub-paragraph is exceeded is that one or more members of a syndicate have ceased to be members of the syndicate concerned otherwise than at the end of the year.

  (3) In exercising its powers under sub-paragraph (1), the Council may set—

            (a)        different percentages in respect of different classes of member, and

            (b)        different percentages in respect of syndicates which carry on different classes of insurance business.

30. No other person to share underwriting

  (1) No underwriting member shall underwrite insurance business at Lloyd’s otherwise than for his own account.

  (2) Subject to sub-paragraph (3), no underwriting member shall [except with the consent of Council] enter into any arrangement the effect of which shall be that—

            (a)        he may participate in the profit or loss which may accrue to another member from underwriting insurance business at Lloyd’s; or

            (b)        any other person except the Society may participate in the profit or loss which may accrue to him from his underwriting insurance business at Lloyd’s [;

            (c)        and in giving its consent under this sub-paragraph (2) the Council may impose such conditions and requirements as it may think fit and may add to, alter or withdraw any condition or requirement so imposed.]

NOTE

  (3) Sub-paragraph (2) shall not prevent an underwriting member from—

            (a)        entering into an agreement whereby as a member of a syndicate he is required to take over all or any part of the underwriting business at Lloyd’s of another member of that syndicate who ceases to underwrite through that syndicate during a year;

            (b)        allowing an underwriting agent or a person employed by it, a [[…]] or a coverholder or other person authorised to accept insurance business on his behalf to take a commission on, or share of, the profit derived from his underwriting insurance business at Lloyd’s by way of remuneration for his services; [. . .]

            [(ba)     in the case of a corporate member, entering into any arrangement approved by the Council with an approved credit institution or with any third party concerning the provision of any letter of credit or guarantee that is to form part of the funds at Lloyd’s of such corporate member, the effect of which would be that:

            (i)         such institution as a result of any charge, fee or commission to be made or charged by it for the provision of such letter of credit or guarantee; or

            (ii)         such other party as a result of any charge, fee or commission to be made or charged by it for providing any security to such institution in respect of such letter of credit or guarantee;

                        may participate in the profit or loss which might accrue to such corporate member from underwriting insurance business at Lloyd’s;]

            (c)        entering into reinsurance arrangements whether by way of quota share or otherwise; [or

            (d)        assigning profit primarily for the purpose of effectuating an abandonment or proving worthlessness in either case for United States Federal Income Tax Purposes.]

NOTE

31. Members broking at Lloyd’s

  Except with the consent of the Council, no member of the Society shall broke insurance business at Lloyd’s.

Part G—Corporate Members: Accounting Requirements and Audits

32. Maintenance of accounting records

  (1) Subject to sub-paragraph (2), every corporate member which is not a company to which sections 221 and 222 of the Companies Act 1985 (accounting records) apply shall cause such accounting records to be kept and preserved, and (where applicable) such accounts and returns to be sent to Great Britain, as will ensure that it will at all times comply with those sections if they applied to it.

  (2) For the purposes of sub-paragraph (1), references in sections 221 and 222 of the Companies Act 1985 to the company’s balance sheet and profit and loss account prepared in accordance with Part VII of the Companies Act 1985 and complying with the requirements of that Act shall be deemed, in relation to companies which prepare

accounts in accordance with paragraph 33(1)(b) or under legislation falling within paragraph 33(2)(b), to be references to preparing a balance sheet and profit and loss account in accordance with, and complying with, the requirements agreed by the Council or with the requirements of the law of the member state in which the corporate member is incorporated (as the case may be).

  (3) Every corporate member shall preserve its accounting records for such period as may be prescribed by the Council.

33. Accounts

  (1) Subject to sub-paragraph (2), every corporate member which is not a company to which Part VII of the Companies Act 1985 applies shall, in respect of every financial year ending after it becomes a member of the Society, prepare accounts—

            (a)        containing information equivalent to the information which they would be required to contain if the corporate member were a company to which Part VII of the Companies Act 1985 applied (provided that the provisions of sections 246 to 249 of the Companies Act 1985 shall be deemed not to apply); or

            (b)        in such other form and containing such information as the Council may agree (whether generally or in relation to a particular case).

  (2) Sub-paragraph (1) shall not apply to a corporate member which—

            (a)        is incorporated in any member state for the time being of the European Economic Community other than the United Kingdom; and

            (b)        is required by the law of that member state to prepare accounts in accordance with legislation implementing the Fourth Council Directive (78/660/EEC), as amended from time to time;

provided that it does not avail itself of the benefit of any of the exemptions contained in articles 11, 27, 44 or 45 of that directive.

34. Supplementary statements

  Every corporate member shall complete supplementary financial statements in the prescribed form and made up to a date prescribed by the Council and shall, unless the Council prescribes an alternative date for filing, file them as part of the annual return under paragraph 16.

35. Accounts etc. to be examined by auditor

  (1) Every corporate member shall procure that all accounts, statements, declarations, returns and other documents to which this paragraph applies be examined by an auditor, approved in writing by the Council—

            (a)        who, in the case of a corporate member which is a company to which Part VII of the Companies Act 1985 applies, is the auditor of the corporate member;

            (b)        who, in the case of a corporate member which is incorporated in any member state for the time being of the European Economic Community other than the United Kingdom, is qualified to act as an auditor of a company for the purposes of the legislation of that member state which implements the Eighth Council Directive (84/253/EEC);

            (c)        who, in any other case, has qualifications to act as the auditor which are acceptable to the Council (whether generally or in a particular case);

and that the auditor shall prepare reports in the terms required by paragraph 36.

  (2) This paragraph applies—

            (a)        (i)in the case of a corporate member which is a company to which Part VII of the Companies Act 1985 applies, to its individual accounts (as defined in section 226 of that Act);

                        (ii)in the case of a corporate member which falls within paragraph 33(2), to its accounts prepared in accordance with that paragraph;

                        (iii)in the case of any other corporate member, to its accounts prepared under paragraph 33(1);

            (b)        if the Council so requires, to any supplementary statements required by paragraph 34;

            (c)        if the Council so requires, to any declaration of compliance; and

            (d)        to such other documents as the Council may specify.

  [(3) The requirement to appoint an auditor under this paragraph applies notwithstanding any exemption under sections 249A to 249E of the Companies Act 1985.]

NOTE

36. Form of auditors’ reports

  (1) The forms of auditors’ report referred to in paragraph 35 are as specified in the following provisions of this paragraph.

  (2) In the case of accounts to which paragraph 33(1)(a) or 35(2)(a)(i) applies, the report shall state the matters required by the Companies Act 1985 together with such additional matters as the Council may require.

  (3) In the case of a corporate member which falls within paragraph 33(2), the report shall state the matters which it is required to state by the legislation falling within paragraph 33(2)(b) ignoring the effect of any legislation of the member state concerned which implements the provisions of article 51(2) of the Fourth Council Directive (78/660/EEC), as amended from time to time, together with such additional matters as the Council may require.

  (4) In the case of accounts prepared in accordance with paragraph 33(1)(b) the report shall be in such form and contain such information as the Council may agree (whether generally or in relation to a particular case).

  (5) In the case of any other document, the report shall be in the prescribed form.

37. Auditors’ undertakings

  (1) The Council may require a candidate which is a body corporate or a corporate member—

            (a)        to procure that its auditor execute an undertaking to the Council, in such form and manner as the Council may specify, containing provisions to the effect, or substantially to the effect, set out in sub-paragraph (2) together with any such other provisions as the Council may specify; and

            (b)        to execute a form of consent and waiver, in such form and manner as the Council may specify, by which the candidate or corporate member will confirm to the Council and to the auditor that it consents to the auditor’s providing to the Council all such information and documents as it may be required to provide in pursuance of the undertaking referred to in sub-paragraph (a) and will waive, so far as necessary for that purpose, any right of confidentiality in respect of such information and documents.

  (2) The provisions referred to in sub-paragraph (1)(a) are—

            (a)        an undertaking that the auditor will comply with the requirements of this Part G applicable to him as the auditor of the candidate or the corporate member;

            (b)        an undertaking that the auditor will—

            (i)         use his best endeavours, to the extent that he may do so lawfully and ethically, having regard to any relevant guidance on confidentiality, to provide to the Council such information or opinions in relation to matters of which the auditor has become aware in his capacity as auditor of the candidate or the corporate member for the purpose of the exercise of powers contained in Lloyd’s Acts 1871 to 1982 or in byelaws or regulations made thereunder, whether or not in response to a request by or under the authority of the Council; and

            (ii)         upon reasonable notice requiring him to do so, attend before the Council or any authorised person; and

            (c)        an undertaking that the auditor will not continue in the office of auditor of the candidate or the corporate member in circumstances where he could reasonably be regarded as not independent.

  (3) For the purposes of this byelaw relevant guidance on confidentiality means either—

            (a)        any rules or guidance on confidentiality made or issued by any body of accountants of which the auditor is a member which have been approved by the Council as satisfactory for the purposes of this byelaw; or

            (b)        any rules or guidance on confidentiality made or issued by the Council for the purposes of this byelaw.

38. Rights of auditors

  (1) Every corporate member shall allow its auditor a right of access at all times to its accounting and other records.

  2) Every corporate member and every director of a corporate member shall provide to the auditor of that corporate member such information and explanations as the auditor thinks necessary for the performance of his duties.

  (3) If an auditor of a corporate member has not obtained all the information and explanations which, to the best of his knowledge and belief, are necessary for the purposes of his audit, he shall state that fact in his report.

  (4) No corporate member and no director of a corporate member shall fail to give to an auditor of that corporate member any information or explanation required by him under sub-paragraph (2), or shall in giving or purporting to give any information or explanation which the auditor so requires, or is entitled so to require, knowingly or recklessly make a statement which is misleading, false or deceptive in a material particular.

  (5) References in this paragraph to an auditor include a person carrying out a further examination pursuant to a direction given under paragraph 39.

39. Further examination of accounts and other documents

  (1) If in any case it appears to the Council that there is good reason to do so, the Council may direct any corporate member to submit for further examination by a person designated by the Council—

            (a)        any accounts, statement, declaration or other document on which the auditor of that corporate member has reported under paragraph 35; or

            (b)        such matters contained in any such accounts, statement, declaration or other document as are specified in the direction;

and may receive from the person making the further examination a report of his conclusions.

  (2) Any further examination and report required by a direction under this paragraph shall be carried out and made within such time as is specified in the direction or within such further time as the Council may allow and shall be at the expense of the corporate member concerned.

  (3) The Council may if it thinks fit pay to the person making the further examination all or any part of the remuneration due to him in respect of his examination and report, and the corporate member concerned shall be liable to reimburse to the Society on demand all sums so paid.

  (4) A corporate member to which a direction is given under this paragraph shall do everything in its power to procure that the auditor of the corporate member and every other person who has advised or dealt with the corporate member and is or may be able to provide relevant information or explanation affords to the person who is to carry out the further examination all such assistance as he may require.

  (5) The Council may disclose the report of a person making a further examination under this paragraph to such persons and in such manner as it thinks fit.

Part H—Resignation, Revocation and Cessation of Membership

40. Resignation

  (1) An underwriting member may resign from membership of the Society by giving to the authorised person written notice of resignation which shall take effect at the year end following the date as from which the last year of account of every syndicate of which the resigning member was a member remaining open was closed by reinsurance to close.

  (2) Subject to sub-paragraphs (8), (9) and (10) an underwriting member who has given notice of resignation under this paragraph shall at the end of the year in which the notice is given (or if the notice is given after [20 October] of that year at the end of the following year) cease to be an underwriting member and become a non- underwriting member, and shall not thereafter undertake any insurance business at Lloyd’s: provided that he shall not be treated as being in breach of this sub-paragraph by reason only that after he becomes a non-underwriting member business may continue to be underwritten on his behalf under a contract entered into before he ceases to be an underwriting member.

NOTE

  (3) A non-underwriting member (other than a former underwriting member who has become a non-underwriting member by virtue of sub-paragraph (2)) may resign from membership of the Society by giving to the authorised person written notice of resignation: provided that such a notice of resignation shall not take effect before the year end following the date as from which the last year of account of every syndicate of which the resigning member was a member remaining open was closed by reinsurance to close.

  (4) Subject to sub-paragraphs (8), (9) and (10) and to Lloyd’s Acts 1871 to 1982 and any other byelaws made or to be made thereunder, a resigning member shall cease to be a member of the Society—

            (a)        in the case of a notice of resignation given under sub-paragraph (1), at the end of the period referred to in that sub-paragraph; and

            (b)        in the case of a notice of resignation given under sub-paragraph (3), at the later of—

            (i)         the expiry of the notice of resignation; or

            (ii)         the end of the period referred to in the proviso to that sub- paragraph.

  (5) The resigning member shall, after the end of the appropriate period referred to in sub-paragraphs (1) and (3), unless he has previously made arrangements concerning the winding up of his underwriting business which are in the opinion of the Council satisfactory, do all such acts and things and make all such arrangements in relation to the winding up of his underwriting business as the Council may in its sole discretion direct.

  (6) If the resigning member fails to comply with any direction given under sub-paragraph (5) the Council may—

            (a)        wind up the underwriting accounts of the resigning member and make such other arrangements in relation thereto as it considers appropriate; and

            (b)        pay, dispute or compromise any claims made against the resigning member.

  (7) A resigning member in respect of whom the Council has exercised its powers under sub-paragraph (5) shall pay to the Society on demand such sums (if any) as the Council may from time to time certify to be in its opinion required for the discharge of the liabilities of the resigning member or for any other purpose incidental to such winding up, including, without limiting the generality of the foregoing, the fees and expenses of any accountants, solicitors or other advisers or agents employed by the Council in or in connection with such winding up. Any sums so certified shall be recoverable by the Society from the resigning member as a civil debt.

  (8) Without prejudice to sub-paragraphs (9) and (10) the Council—

            (a)        may permit the giving of a notice of resignation to take effect before the end of the period referred to in sub-paragraph (1) (but in any event not before the year end of the year following that in which it is given) and may direct that an underwriting member shall cease to be an underwriting member and become a non-underwriting member at the end of the year in which the notice is given notwithstanding that it is given later than 31st August;

            (b)        may at any time before the end of the appropriate period referred to in sub-paragraphs (1) and (3) shorten or extend as it considers appropriate the period at the end of which the resigning member shall cease to be a member of the Society; and

            (c)        may at any time before the resigning member ceases to be a member of the Society accept written notice of the resigning member’s withdrawal of his resignation on such terms and conditions as it thinks fit: provided that such notice has been given before the date on which the resigning member would have ceased to be a member of the Society under the provisions of this paragraph.

  (9) Where the Council has undertaken to notify a member of the Society on or before a specified date in any year of the rate of the annual subscription under the Membership (Entrance Fees and Annual Subscriptions) Byelaw (No. 9 of 1987, 105) or of any contribution to the Central Fund under paragraph 4 of the Central Fund Byelaw (No. 4 of 1986, 506) [or of any contribution to the New Central Fund under paragraph 4 of the New Central Fund Byelaw (No. 23 of 1996, 522)] which the Council proposes to prescribe or levy for the next succeeding year, if that member gives written notice of resignation within 30 days after the date of notification and in any event prior to 1st January of the next succeeding year, that member shall become a non-underwriting member at the end of the year in which the notice is given.

NOTE

  (10) Where the Council has undertaken to a member of the Society that it will not amend—

            (a)        provisions of specified byelaws; or

            (b)        provisions of any agreement in the terms of any standard agreement;

in a way which will have an adverse effect on the member concerned as an underwriting member without giving that member an opportunity to cease to be an underwriting member before 1st January of the year in which the amendment is to take effect, it shall, if necessary, exercise its powers in sub-paragraph (8)(a) so as to direct that the member concerned shall become a non-underwriting member before that date.

41. Cessation for not underwriting

  (1) Subject to paragraph 3(10), where an underwriting member is not underwriting insurance business at Lloyd’s and has not done so for three or more consecutive years of account, then the Council may declare his membership to have ceased.

  (2) Before exercising the power conferred by this paragraph, the Council shall—

            (a)        inform the underwriting member concerned that the exercise of that power is being considered; and

            (b)        permit the underwriting member to make representations concerning the proposed exercise of the power within such period as the Council may require.

42. Corporate member not fit and proper

  (1) The Council may declare that a corporate member shall forthwith cease to be a member, or require it to cease underwriting, if it appears to the Council that it is not a fit and proper person to be a member, whether or not as a result of a review under paragraph 11.

  (2) Before the Council makes any declaration under sub-paragraph (1), the Council shall—

            (a)        inform the member in writing of its intention and of the grounds for the intended declaration; and

            (b)        allow the member to make representations as to the intended declaration within such period as the Council may prescribe.

  (3) If in the opinion of the Council the power conferred by sub-paragraph (1) is required to be exercised immediately the Council may exercise such power without having first taken the steps referred to in sub-paragraph (2).

  (4) In any case falling within sub-paragraph (3) the Council shall—

            (a)        as soon as possible inform the member concerned of the reasons for the declaration; and

            (b)        permit the member to make representations within such period as the Council may require;

and where such representations are received, the Council shall reconsider the declaration and the exercise of the power under sub-paragraph (1).

43. Revocation of membership on conviction of a reportable criminal offence

  (1) Where a member of the Society has been convicted of a reportable criminal offence by a court in the United Kingdom or elsewhere the Council shall revoke his membership of the society with effect from such date as the Council shall determine: provided that the Council shall not revoke membership where it is satisfied that the nature and circumstances of the conviction do not render the member unsuitable to continue in membership of the Society.

  (2) The findings of fact and decision of any court, whether in the United Kingdom or elsewhere, shall be conclusive evidence of fact, conviction and sentence unless, to the knowledge of the Council, the conviction has been set aside on appeal or otherwise.

  (3) Where the Council has reason to suspect that a member of the Society or a person who is a director of […] a member has been convicted of a reportable criminal offence, the Council, may, in its absolute discretion, require the [member or director] concerned to provide information, documents or other materials relating to the alleged offence.

NOTE

44. Notification, procedure and powers incidental to revocation under paragraph 43

  (1) Not later than 28 days before the date on which the Council proposes to consider revoking membership under paragraph 43 the Council shall give to the member concerned—

            (a)        written notice that the Council is to consider revoking membership and of the date on which the matter is to be considered;

            (b)        a written statement identifying the offence in respect of which it is alleged that the member has been convicted and, if known, the sentence and the court and date of conviction; and

            (c)        a copy of paragraphs 14(4), 43 and this paragraph of this byelaw.

  (2) A member on whom a notice has been served under sub-paragraph (1) shall be permitted to make representations to the Council.

  (3) A member wishing to make representations under sub-paragraph (2) shall, not later than 14 days before the date on which the Council proposes to consider revoking his membership, give to an authorised person written notice of his intention to make oral representations or a copy of any written representations, or both, as the case requires.

  (4) Subject to this paragraph, the Council shall determine any procedural question in such manner as it considers most suitable for the clarification of the issues and generally for the just handling of the matter.

  (5) Where the Council revokes membership under paragraph 43 the Council shall give written notice to the member concerned of the revocation of his membership, of the date on which it is to take effect and of his right of appeal.

45. Revocation for breach of condition or requirement

  (1) Without prejudice to the powers of the Council under Lloyd’s Acts 1871 and 1982 and any byelaw or regulation made thereunder, if it appears to the Council that a member of the Society fails to comply with or to satisfy any condition or requirement of admission to, or continuing, membership of the Society (other than a financial condition or requirement) prescribed by the Council under this byelaw and for the time being applicable to him the Council may revoke his membership.

   (2) Any such failure by a member of the Society as is referred to in sub-paragraph (1) shall not of itself constitute misconduct within the meaning or for the purposes of paragraph 1(a), (b) or (c) of the Misconduct, Penalties and Sanctions Byelaw (No. 9 of 1993) (but without prejudice to any other sub-paragraph of that paragraph).

  (3) Before exercising the power conferred by sub-paragraph (1) the Council shall—

            (a)        inform the member of the Society concerned that the exercise of that power is being considered; and

            (b)        permit the member of the Society to make representations concerning the proposed exercise of the power within such period as the Council may require.

46. Bankruptcy and insolvency

  (1) Where a member of the Society is adjudicated bankrupt or adjudicated or declared insolvent by the due process of law of any country within the European Economic Community, the Council shall forthwith declare his membership to have ceased, provided that if such adjudication or declaration is set aside on appeal or otherwise, or the Council’s declaration is set aside on appeal under the byelaw entitled “Appeal Tribunal” (No. 7 of 1983), then the Council shall forthwith cancel its declaration.

  (2) The Council may declare that a member of the Society shall forthwith cease to be a member, or may require him to cease underwriting, if an insolvency event occurs in relation to that member: provided that if any insolvency event is set aside on appeal or otherwise, or the Council’s declaration or requirement is set aside on appeal under the byelaw entitled “Appeal Tribunal” (No. 7 of 1983), then the Council shall forthwith cancel its declaration and any such requirement shall no longer apply.

  (3) Before the Council makes any declaration under sub-paragraph (2) the Council shall—

            (a)        inform the member in writing of its intention and of the grounds for the intended declaration; and

           

            (b)        allow the member to make representations as to the intended declaration within such period as the Council may prescribe.

  (4) If in the opinion of the Council the power conferred by sub–paragraph (2) is required to be exercised immediately, the Council may exercise such power without having first taken the steps referred to in sub–paragraph (3).

  (5) In any case falling within sub–paragraph (4) the Council shall—

            (a)        as soon as possible inform the member concerned of the reasons for the declaration; and

            (b)        permit the member to make representations within such period as the Council may require;

and where such representations are received, the Council shall reconsider the declaration and the exercise of the power under sub–paragraph (2).

  (6) The Council shall give notice of the terms of any declaration made in respect of a member of the Society under sub–paragraph (1) or (2) to any […], members’ agent or managing agent acting on behalf of that member.

  (7) The production of a receiving order in bankruptcy or an adjudication of bankruptcy or a declaration or adjudication of insolvency or any other order of a kind referred to in the definition of insolvency event by a Court sealed, stamped or otherwise duly certified by the Court in question shall, unless that order declaration or adjudication has been set aside on appeal or otherwise, be conclusive evidence of the fact that the order, declaration or adjudication has been made by the due process of law of the relevant country.

NOTE

47. Declaration of war

  (1) In the event of a declaration of war or the commencement of hostilities between the United Kingdom and any country—

            (a)        if a corporate member is constituted or incorporated in or under the laws of that country;

            (b)        if any member—

            (i)         is a national of, resident, domiciled or carrying on business in that country; or

            (ii)         is controlled by any person falling within sub–paragraph (a) or (b)(i);

the Council may exercise the powers set out in sub–paragraph (2) in relation to the member concerned.

  (2) In relation to any member falling within sub–paragraph (1)(a) or (b), the Council may—

            (a)        require such member to cease underwriting insurance business at Lloyd’s for such period and on such terms as the Council may prescribe; or

            (b)        declare his membership of the Society to have ceased.

  (3) Before exercising the powers conferred by this paragraph the Council shall—

            (a)        take such steps as shall reasonably be within its power to inform the member concerned that the exercise of such power is being considered; and

            (b)        permit that member to make such representations concerning the proposed exercise of power within such period as the Council may require.

  (4) In relation to sub–paragraph (1), the definition of “control” in the Schedule to this byelaw shall not apply.

48. Consequences of revocation or cessation

  (1) Where membership has been revoked under any paragraph of this Part H or a person has ceased to be a member otherwise than by reason of death or resignation

the provisions of paragraph 40(5), (6) and (7) shall apply mutatis mutandis as if he had resigned on the date on which the revocation or cessation (as the case may be) takes effect.

 

   (2) Costs incurred either by the member of the Society or by the Society in connection with any revocation or proposed revocation under any paragraph of this Part H shall be at the discretion of the Council, which may order to whom, by whom and in what manner those costs or any part thereof shall be paid, and which shall determine the amount of such costs.

[48A. Requirements applying to former underwriting members

  (1) Any individual or any Scottish limited partnership who for any reason ceases to be a member of the Society shall during any subsequent period in which that individual or Scottish limited partnership may be obliged to carry out any contract of insurance underwritten by that individual or Scottish limited partnership as a member of the Society—

            (a)        in the case of an individual—

            (i)         notify the Secretary to the Council in writing of any change of address not later than one month after the change; and

            (ii)         make and maintain arrangements for the Secretary to the Council to be notified in writing in the event of his death; and

            (b)        in the case of a Scottish limited partnership notify the Council in writing of any change in its principal place of business not later than one month after the change.

  (2) The Council may require a member to execute and deliver or otherwise become a party to any prescribed form of deed, contract, undertaking or other document or instrument so as to give effect to the requirements in sub-paragraph (1).]

NOTE

PART I—MISCELLANEOUS AND GENERAL

49. Powers of Society as to set-off and application of funds

  If a member of the Society owes any sum or sums (including any fine) to the Society, the Society may without prejudice to any other remedy available to the Society—

            (a)        set off against such sum or sums any moneys payable by the Society to that member;

            (b)        after the satisfaction of all existing underwriting liabilities of a member, retain any assets beneficially owned by that member which are under its control, sell or otherwise realise such assets and apply any sale or realisation proceeds in discharging on his behalf such sum or sums.

50. Lloyd’s central file of interests in corporate members

  (1) The Council shall set up and maintain a central file of interests in corporate members and record in it information supplied to the Council under sub-paragraph (3).

  (2) The central file shall contain a separate section in respect of each corporate member.

  (3) Subject to sub-paragraph [(6)], any [approved run-off company,] […], [[…]] or underwriting agent which acquires or disposes of any interest in securities of—

            (a)        a corporate member, or

            (b)        a person who controls a corporate member;

shall promptly upon its becoming aware of such acquisition or disposal notify the Council in accordance with sub-paragraph (4).

NOTE

  (4) Any such notification shall be given in writing and shall set out—

            (a)        the nature of the transaction;

            (b)        the name of the issuer of the securities;

            (c)        the form and number of securities involved;

            (d)        the number of securities (if any) in which the person giving the notification has an interest following the transaction;

            (e)        the identity of each registered holder (if any) or, if none, legal owner, of those securities and the numbers of securities they each hold or own (as the case may be); and

            (f)         such other information as the Council may prescribe.

  (5) Information relating to interests in securities of a controller of a corporate member shall be included in that section of the central file which relates to the corporate member of which he has control.

  (6) The Council may exempt from disclosure under sub-paragraph (3) such classes of interest in securities as it may consider appropriate.

  (7) The central file shall be kept at the premises of the Society in the City of London.

  (8) The central file shall be open to inspection at such time or times as the Council may prescribe.

  (9) Any person may obtain a copy (whether in microfiche or such other convenient form as the Council may from time to time adopt) of any particulars inscribed in the central file on payment of such sum as the Council may prescribe.

[50A. Captive corporate members

  (1) The Council shall set up and maintain a central register of interests in captive corporate members and record information supplied to the Council under sub-paragraph (3).

  (2) The central file shall contain a separate section in respect of each captive corporate member.

  (3) Subject to paragraph 6, any person which acquires or disposes of any interest or securities of

            (a)        a captive corporate member; or

            (b)        a person who controls a captive corporate member;

shall promptly upon becoming aware of such acquisition or disposal notify the Council in accordance with sub-paragraph (4).

  (4) Any such notification shall be given in writing and shall set out:

            (a)        the nature of the transaction;

            (b)        the name of the issuer of the securities;

            (c)        the form and numbers of securities involved;

            (d)        the number of securities (if any) in which the person giving the notification has an interest following the transaction;

            (e)        the identity of each registered holder (if any) or, if none, legal owner, of those securities and the numbers of securities they each hold or own (as the case may be); and

            (f)         such other information as the Council may prescribe.

  (5) Information relating to interests in the securities of a controller of a captive corporate member shall be included in that section of the central file which relates to the captive corporate member of which he has control.

  (6) The Council may exempt from disclosure under sub-paragraph (3) such classes of interest in securities as it may consider appropriate.

  (7) The central file shall be kept on the premises of the Society.

  (8) The central file shall be open to inspection at such time or times as the Council may prescribe.

  (9) Any person may obtain a copy (whether on microfiche or other such convenient form as the Council may from time to time adopt) of any particulars prescribed in the central file on payment of such sum as the Council may prescribe.]

NOTE

51. Overseas bodies corporate

  (1) The Council may [admit] a body incorporated elsewhere than in a part of the United Kingdom to membership of the Society so long as the Council is satisfied, having regard to the constitution of the body and the law under which the body is incorporated, that the requirements and intent of this byelaw are or will be complied with.

  (2) The requirements of this byelaw shall apply to a body corporate falling within sub-paragraph (1) with any adaptation which the Council considers necessary.

NOTE

[51A. Scottish limited partnerships

  The Council shall have power to prescribe conditions and requirements in respect of Scottish Limited Partnerships which either modify or supplement the requirements of this byelaw and any requirements made under this byelaw in their application to Scottish Limited Partnerships.]

NOTE

52. Power of the Council to obtain information

  The byelaw entitled “Information and Confidentiality” (No. 21 of 1993, 417), in so far as it relates to any information, documents or other material required for the purposes of or in connection with any provision of this byelaw or any condition or requirement prescribed or direction given under any provision of this byelaw, shall apply as if the words “(including information, documents or other material relating to the affairs of principals and clients of Lloyd’s advisers, […], underwriting agents or other persons)” in paragraph 2 of that byelaw were deleted.

NOTE

53. Powers to prescribe etc.

  (1) The Council shall have power to prescribe the form and contents of —

            (a)        the declaration of compliance; and

            (b)        any documents referred to in this byelaw as being in the prescribed form.

  (2) The Council shall have power to prescribe —

            (a)        the procedures referred to in paragraphs 3(7) and 20(4);

            (b)        the events and information referred to in paragraphs 14(2)(f) and (3)(c)(iii);

            [(ba)     the fee payable under paragraph 14(8) and such fee may differ for different kinds of consent;]

            (c)        the dates referred to in paragraphs 15(1) and 34;

            (d)        who is to sign the declaration of compliance;

 

            (e)        the manner of notification for the purposes of paragraph 21(4);

            (f)         the percentages referred to in paragraphs 27(1), 28 and 29(1);

            (g)        the information referred to in paragraphs 27(3), 28 and 50(4)(f);

            (h)        the period referred to in paragraph 32(3);

            (i)         the additional matters referred to in paragraphs 36(2) and (3);

            (j)         the matters referred to in paragraphs 50(8) and (9).

NOTE

  (3) The Council shall have power to specify documents for the purposes of paragraph 35(2)(d).

  (4) The Council may set and change the period prescribed for sub-paragraphs 15(7) and 16(1) and (3), but no change which has the effect of shortening the period shall take effect earlier than six months after the date on which the change is announced.

54. Powers of the Council cumulative and exercisable from time to time

  Except in so far as it is expressly otherwise provided, any power conferred on the Council by any provision of this byelaw—

            (a)        is in addition to, and shall not be construed as limiting or being limited by, any other power of the Council, whether conferred by any other provision of this byelaw or otherwise; and

            (b)        may be exercised from time to time.

[54A. Power of Council to take into account information etc

  In exercising any of the powers or discretions conferred on it under this byelaw the Council may:

            (a)        subject to any contrary provisions in any other byelaw, have regard to any information in its possession from whatever source;

            (b)        establish or appoint such persons, committees or sub-groups as it thinks fit;

            (c)        consult with such persons and in relation to such matters as it may think fit; and

            (d)        have regard to any business or activities of any body or person, whether at Lloyd’s or elsewhere.]

NOTE

55. Service of notices and legal process

  (1) All legal proceedings, notices and other communications by the Society which require to be served upon or given to an individual member of the Society, including deceased or bankrupt members, shall for all purposes be deemed to be effectively served on such member or his personal representatives or trustee in bankruptcy if sent through the post to or left at the address of his members’ agent or if left for collection by that members’ agent at the address of the Society, in accordance with arrangements made between the members’ agent concerned and the Society.

  (2) If at any time an individual member does not have a members’ agent then such legal proceedings, notices and other communications shall be deemed to be effectively served on such member for all purposes if given to him personally or sent to him by post at the latest correspondence address of the member shown in the records of the Society.

  (3) All such legal proceedings, notices and other communications shall, on the death or bankruptcy of a member of the Society, be deemed to have been effectively served on his personal representatives or trustee in bankruptcy (as the case may be) if sent through the post to the address supplied to the Society by such personal representatives or trustee in bankruptcy (as the case may be) or (until such address has been so supplied) if sent through the post to the latest correspondence address of the member shown in the records of the Society.

  (4) Every corporate member of the Society which is incorporated in a jurisdiction outside the United Kingdom shall at all times maintain an agent for service of process in England which shall be—

            (a)        any member’s agent appointed by the corporate member concerned; or

            (b)        […]

            (c)        […] such other person with a place of business in England as the corporate member may have appointed for the purposes of this sub-paragraph and whose name and address have been notified in writing to an authorised person.

  (5) Where sub-paragraph (4)(c) applies, a corporate member shall appoint an agent with a place of business in England and shall notify the relevant authorised person in writing of the agent’s name and address.

  (6) All legal proceedings, notices and other communications by the Society which require to be sent to or served on a corporate member shall for all purposes be deemed to be effectively served on such member—

            (a)        if it has a members’ agent, if sent through the post to or left at the address of its members’ agent or if left for collection by that members’ agent at the address of the Society, in accordance with arrangements made between the members’ agent concerned and the Society;

            (b)        […]

            (c)        if it has no members’ agent or […]—

            (i)         in the case of a corporate member which is incorporated in any part of the United Kingdom, if sent through the post to or left at its registered office for the time being; and

            (ii)         in the case of any other corporate member, if sent through the post to or left at the address of its agent appointed under sub-paragraph (4)(c).

  (7) Any legal proceedings, notices and other communications which are—

            (a)        sent to a member of the Society or its agent by post shall be deemed to have been effectively served by properly addressing, prepaying and posting a letter containing such legal proceedings, notice or other communication and shall be deemed to have been received 72 hours from the time of posting;

            (b)        left at the address of the members’ agent […] or left for collection by that members’ agent or […] at the address of the Society, in accordance with arrangements made between the members’ agent […] shall be deemed to have been received on the date so left;

 

            (c)        if left at the address of an agent appointed under sub-paragraph (5) or at the registered office of a corporate member shall be deemed to have been received on the date so left.

  (8) All legal proceedings, notices and other communications by the Society which require to be served on or given to a director or manager of a corporate member shall for all purposes be treated as effectively served or given if delivered to him or sent to him care of the corporate member in accordance with sub-paragraph (6).

NOTE

56. Revocation

  The Membership Byelaw (No. 9 of 1984) is hereby revoked.

57. Commencement and saving provisions

  (1) This byelaw shall come into force on 8 September 1993.

  (2) Section 17(2)(b) of the Interpretation Act 1978 shall have effect in relation to any condition or requirement made or other thing done under the Membership Byelaw (No. 9 of 1984) as if that condition, requirement or other thing were subordinate legislation made or another thing done under an enactment.

Schedule. Interpretation

  1. In this byelaw, unless the context otherwise requires—

  [“approved credit institution” means, in relation to any of the following purposes:

            (i)         holding sums comprising premiums trust funds held under a premiums trust deed;

            (ii)         holding sums comprising a member’s funds at Lloyd’s;

            (iii)        providing guarantees and issuing or confirming letters of credit comprising a member’s funds at Lloyd’s;

            (iv)        issuing certificates of deposit which are authorised investments; or

            (v)        issuing or guaranteeing loan notes to be comprised in a member’s funds at Lloyd’s,

            a credit institution approved by the Council for that purpose;]

NOTE

“arrangement” includes any agreement or arrangement whether or not intended to be enforceable by legal proceedings and whether or not evidenced in writing;

“authorised person” means in any provision of this byelaw an officer or employee of the Society authorised by the Council to discharge the duties and functions specified therein;

“candidate” has the meaning given in paragraph 3(2)(c) of this byelaw;

[“captive corporate member” means the corporate member who constitutes a captive syndicate;

“captive syndicate” means a syndicate which derives, or proposes in its annual syndicate business plan to derive, 25 per cent or more of the syndicate premium income from underwriting group company insurance business;]

NOTE

“central file” means the file established under paragraph 50(1) of this byelaw;

“Central Fund” has the meaning given in the Schedule to the Central Fund Byelaw (No. 4 of 1986, 506);

“class of insurance business” means a class of insurance business for the time being designated by the Council as forming a separate class for the purposes of this byelaw and comprising risks of such description as the Council may specify, and so that different classes may be so designated for the purposes of different provisions of this byelaw;

“class premium limit” means, in relation to an underwriting member, the limit for the time being prescribed on the amount of insurance business of any class which is to be underwritten on his behalf from time to time, such limit being expressed as the maximum permissible amount of his premium income arising out of insurance business of that class allocable to any year of account;

“constitution” means all instruments conferring, defining, recording or restricting the capacity or powers of a corporate member, regulating the management of its affairs or otherwise relating to its constitution;

[“corporate adviser” has the meaning given in the Underwriting Agents Byelaw (No. 4 of 1984, 101)]

NOTE

“corporate member” means a member of the Society which is a body corporate [or a Scottish limited partnership];

NOTE

“coverholder” has the meaning given in the Schedule to the Binding Authorities Byelaw (No. 9 of 1990, 314);

“declaration of compliance” has the meaning given in paragraph 15(1) of this byelaw;

“funds at Lloyd’s” has the meaning given in paragraph 4 of this byelaw;

[“general business” means the business of effecting and carrying out general insurance contracts];

NOTE

“general business premium limit” means, in relation to an underwriting member, the limit for the time being prescribed on the amount of general business which is to be underwritten on his behalf from time to time, such limit being expressed as the maximum permissible amount of his premium income arising out of general business allocable to any year of account;

[“general insurance contract” means any contract of insurance falling within Part I of Schedule 1 to the Regulated Activities Order;]

NOTE

[“general partner” means a company which is registered as a general partner of a Scottish limited partnership pursuant to the Limited Partnerships Act 1907;]

NOTE

[“group company” means, in relation to a company, any subsidiary undertaking or any holding company of that company and any subsidiary of such holding company;

“group company insurance business” means either:

            (i)         insurance business in relation to which the insured is a group company of a corporate member which underwrites or proposes to underwrite that insurance business; or

            (ii)         reinsurance of risks in relation to which the original assured is a group company of the corporate member which reinsures or proposes to reinsure the risk;]

NOTE

“holding company” has the meaning given in section 736 of the Companies Act 1985;

“individual member” means a member of the Society who is an individual;

“insolvency event” means—

            (a)        in relation to an individual member, the making of a receiving order in bankruptcy against such member by the due process of law of any country, such member making or proposing any composition with his creditors or otherwise acknowledging his insolvency, or being adjudicated bankrupt or adjudicated or declared insolvent by the due process of law of a country outside the European Economic Community; […]

            (b)        in relation to a corporate member [which is a body corporate], its making or proposing any composition with its creditors or other- wise acknowledging its insolvency, a proposal being made in respect of it under section 2 of the Insolvency Act 1986, a bankruptcy order being made against it by the due process of law of any country, its being adjudicated or declared insolvent by the due process of law of any country, an order being made or resolution being passed for its winding up or dissolution, an administration order being made in respect of it under section 9 of the Insolvency Act 1986,

                        a receiver, trustee or analogous officer being appointed in respect of the whole or any material part of its property or assets, its directors presenting or filing in any court a petition in respect of its bankruptcy, winding up or other insolvency or which seeks any reorganisation, dissolution or similar relief or there occurring an event in any jurisdiction which is analogous to any of the foregoing events[;]

            [(c)       in relation to a corporate member which is a Scottish limited partnership, granting a Trust Deed for or making or proposing any composition with its creditors or otherwise acknowledging its insolvency, the award by a court of an order of sequestration in respect of it or any of its general partners under the Bankruptcy (Scotland) Act 1985, a bankruptcy order being made against it by the due process of law of any country, its being adjudicated or declared insolvent by the due process of law of any country, an order being made or resolution passed for its winding up or dissolution, a judicial factor, a receiver, trustee or analogous officer being appointed in respect of the whole or any material part of its property or assets, its partners or any one of them presenting or filing a petition for its sequestration in respect of its bankruptcy, winding up or insolvency or which seeks any reorganisation, dissolution or similar relief, or there occurring any event which would otherwise render it apparently insolvent in terms of section 7 of the Bankruptcy (Scotland) Act 1985, or an event in any jurisdiction which is analogous to any of the foregoing events.]

NOTE

“introductory commission” means any commission or other remuneration or benefit, including any continuing commission, remuneration or benefit, for introducing, or for arranging the sponsorship of, or for sponsoring a candidate, or otherwise in connection with a candidate’s membership;

[…];

NOTE

[…]

NOTE

[“long term business” means the business of effecting and carrying out long term insurance contracts;]

NOTE

“long term business premium limit” means, in relation to an underwriting member, the limit for the time being prescribed on the amount of long term business which is to be underwritten on his behalf from time to time, such limit being expressed as the maximum permissible amount of his premium income arising out of long term business allocable to any year of account;

[“long term insurance contracts” means any contract of insurance falling within Part II of Schedule 1 to the Regulated Activities Order;]

NOTE

[“manager” means:

            (a)        in relation to a body corporate, a person who exercises managerial functions under the immediate authority of the directors of a corporate member or any of them;

            (b)        in relation to a Scottish limited partnership, a person who exercises managerial functions under the immediate authority of the directors of a general partner of the Scottish limited partnership or any of them;]

NOTE

“managing agent” means a person who is listed as a managing agent in the register of underwriting agents maintained under the Underwriting Agents Byelaw (No. 4 of 1984, 101);

“member of the Society” and “underwriting member” include references to any administrator, administrative receiver, committee, curator bonis, executor, liquidator, manager, personal representative, supervisor or trustee in bankruptcy, or any other person by law entitled or bound to administer the affairs of the member concerned;

“members’ agent” means a person who is listed as a members’ agent in the register of underwriting agents maintained under the Underwriting Agents Byelaw (No. 4 of 1984, 101);

“member’s syndicate premium income” means premium income of a member of a syndicate arising out of insurance business underwritten through that syndicate;

“member’s syndicate premium limit” means, in relation to an underwriting member, the limit for the time being prescribed on the amount of insurance business allocable to a particular year of account which is to be underwritten on the member’s behalf through a particular syndicate, such limit being expressed as the maximum permissible amount of his member’s syndicate premium income allocable to that year of account;

“overall premium limit” means, in relation to an underwriting member, the limit for the time being prescribed on the amount of insurance business which is to be underwritten on his behalf from time to time, such limit being expressed as the maximum permissible amount of his premium income allocable to any year of account;

“personal reserve funds” means all monies and other assets paid to or retained by the trustees of a premiums trust fund who are not managing agent’s trustees (as defined in the premiums trust deed constituting that premiums trust fund) and held by them subject to the trusts of that premiums trust deed;

“premium income” means, in relation to an underwriting member, the aggregate of the premiums credited to him less, or net of qualifying reinsurance premiums, brokerage, discount, commission, any tax charged upon or any monies withheld from a premium by or on behalf of any statutory, governmental, state, provincial or local governmental authority, body or official and any premium returned to an assured;

[“premiums trust deed” means a trust deed, in the form for the time being required by the Council, constituting a premiums trust fund;]

NOTE

“premiums trust fund” means a fund of premiums and other monies held from time to time by or under the control of trustees upon the trusts of a premiums trust deed;

“prescribed form” means, in relation to any notice or other document, such form and contents as may from time to time be prescribed;

“prescribed period” means, in any provision of this byelaw, such period as the Council may from time to time prescribe for the purposes of that provision;

“qualifying reinsurance premiums” has the meaning given in paragraph 1(a) of the Syndicate Premium Income Byelaw (No. 6 of 1984, 201);

[“Regulated Activities Order” means the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001 No. 544);]

NOTE

“reinsurance to close” has the meaning given in paragraph 1 of Schedule 1 to the Syndicate Accounting Byelaw (No. [18 of 1994, 326]);

NOTE

“resigning member” means a member of the Society who has given a notice of resignation under paragraph 40 of this byelaw;

“reportable criminal offence” means—

            (a)        any offence in respect of which a court has imposed a sentence of imprisonment or other custodial sentence of more than 12 months, other than a suspended sentence;

            (b)        any offence involving any of the following: theft, robbery, burglary, blackmail, handling stolen property, forgery or fraud;

            (c)        conspiracy, incitement or attempt to commit any offence referred to in (b) or aiding, abetting, counselling or procuring the commission of such an offence;

[“Scottish limited partnership” means a limited partnership formed under the laws of Scotland;]

NOTE

[“share swap arrangement” has the meaning given in the Conversion and Related Arrangements Byelaw (No. 22 of 1996, 329) for the time being in force;]

NOTE

[“special reserve fund” means any fund so designated and set up in relation to an individual member in accordance with arrangements referred to in section 175 of and Schedule 20 to the Finance Act 1993;]

NOTE

[“specified person” means, in relation to a Scottish limited partnership:

            (a)        a company which is registered as a general partner of that Scottish limited partnership pursuant to the Limited Partnerships Act 1907;

            (b)        a director of a general partner;

            (c)        a management company being a company appointed by a general partner under an agreement to provide certain management or administrative services;

            (d)        a controller of the SLP; or

            (e)        a controller of a general partner.]

NOTE

“sponsor” has the meaning given in paragraph 7 of this byelaw;

“standard agreement” means any of the forms of agreement set out in the Schedules to the Agency Agreements Byelaw (No. 8 of 1988, 310);

“subsidiary” has the meaning given in section 736 of the Companies Act 1985;

[“surrender arrangement” has the meaning given in the Conversion and Related Arrangements Byelaw (No. 22 of 1996, 329) for the time being in force;]

NOTE

 

[“syndicate” means an underwriting member or group of underwriting members of Lloyd’s underwriting insurance business at Lloyd’s through the agency of a Lloyd’s underwriting agent to which member or group a particular syndicate number is assigned by the Council;]

NOTE

“syndicate allocated capacity” has the meaning given in paragraph 1(a) of the Syndicate Premium Income Byelaw (No. 6 of 1984, 201);

[“syndicate premium income” has the meaning given in paragraph 1(a) of the Syndicate Premium Income Byelaw (No. 6 of 1984, 201;)]

NOTE

“underwriting requirement” means any qualification, condition or requirement relating to a member’s admission to or to continuing membership of the Society or its underwriting insurance business at Lloyd’s prescribed or imposed by the Council under this byelaw.

  2. In this byelaw—

                        (a)        “associates” means, in relation to any person—

                        (i)         that person’s spouse, children (including step-children and adopted children) under the age of 18 years;

                        (ii)         any body corporate of which that person or their spouse is a director;

                        (iii)        any person who is an employer, employee or partner of the person or that person’s spouse; and

                        (iv)        any body corporate of which that person or that person’s spouse, either alone or with any other connected person, has control;

                        (b)        “connected company” means, in relation to a candidate which is a body corporate or to a corporate member, any body corporate which is under common control with that candidate or corporate member;

                        (c)        “connected person” means, in relation to any person—

                        (i)         any person who is party to any agreement, arrangement or understanding with the first person involving mutual obligations, understandings or expectations with regard to the retention or disposal of any shares in a body corporate or to the exercise of any voting power conferred by the shares or to any other influence arising from the shares;

                        (ii)         any person whom the first person controls;

                        (iii)        where that person is a body corporate, any trustee of its pension funds;

                        (iv)        where that person is a body corporate, its directors and their associates;

                        (v)        where that person is an individual, his associates;

                        (d)        “controller” means, in relation to a body corporate—

                        (i)         a person who, either alone or with any connected person or persons, is entitled to exercise, or to control the exercise of, [10] per cent. or more of the voting power at any general meeting of [that body corporate] or of another body corporate [[of which it is a subsidiary undertaking]]; or

                        (ii)         a person in accordance with whose directions or instructions, either alone or with those of any connected person or persons, the directors of the body corporate are accustomed to act; [or

                        (iii)        any person who, either alone or with any connected person or persons, holds such part of the share capital of that body corporate or of [[the parent undertaking of]] that body corporate as would, if the whole of the income of the body corporate or [[the parent undertaking]] were in fact distributed among its shareholders entitle him to receive [10] per cent or more of the amount so distributed; or

                        (iv)        any person who, either alone or with any connected person or persons, has such rights as would, in the event of a winding up of that body corporate or of [[the parent undertaking of]] that body corporate or in any other circumstance, entitle him to receive [10] per cent or more of the assets of the body corporate or [[the parent undertaking]] available for distribution among its shareholders;]

                                    and “control” shall be construed accordingly;

NOTE

            [(da)     “controller” means, in relation to a Scottish limited partnership:

            (i)         a person who, either alone or with any associate or associates, is entitled to exercise, or control the exercise of 10 per cent. or more of the voting power at any meeting of the partners;

            (ii)         a person who directs the business of the partnership whether under a formal or informal agreement or in accordance with whose directions or instructions, either alone or with those of any associate or associates, the partners are accustomed to act (but disregarding advice in a professional capacity);

            (iii)        a person who, either alone or with any associate or associates, has such rights as would, if the whole of the income of the partnership profits were in fact distributed among the partners entitle him to receive 10 per cent. or more of the amount so distributed; or

            (iv)        a person who, either alone or with any associate or associates, has such rights as would, in the event of a winding up of the partnership or in any other circumstances, entitle him to receive 10 per cent. or more of the partnership’s assets available for distribution among partners;]

NOTE

            (e)        [“10 per cent controller” means a controller in whose case the percentage referred to in sub-paragraph (d) above is 10 or more but less than 20;

                        “20 per cent controller” means a controller in whose case the percentage is 20 or more but less than 33;

            “33 per cent controller” means a controller in whose case that percentage is 33 or more but less than 50;

                        “50 per cent controller” means a controller in whose case that percentage is 50;

            “majority controller” means a controller whose shareholding is such that the body corporate is his subsidiary undertaking.]

NOTE

            [(f)        “notifiable holding” means voting rights or shares which, if acquired by any person, will result in his becoming a 10 per cent controller, a 20 per cent controller, a 33 per cent controller, a 50 per cent controller or a majority controller;

            (g)        “subsidiary undertaking” and “parent undertaking” have the respective meanings given in section 258 of the Companies Act 1985.]

NOTE

  3.(1) In this byelaw “interest in securities” includes an interest of any kind whatsoever in shares, debentures or any other form of securities (“securities”); and accordingly there are to be disregarded any restraints or restrictions to which the exercise of any right attached to the interest is or may be subject and references, which relate to securities, to having an interest in securities shall be construed accordingly.

  (2) For the purposes of this byelaw a person also has an interest in securities if—

            (a)        he enters into a contract for their purchase by him (whether for cash or other consideration); or

            (b)        not being the registered holder, he is entitled to exercise any right conferred by the holding of the securities or is entitled to control the exercise of any such right;

            (c)        he is a beneficiary of a trust where the property held on trust includes an interest in securities;

            (d)        otherwise than by virtue of having an interest under a trust, he has a right to call for delivery of the securities to himself or to his order; [. . .]

            (e)        otherwise than by virtue of having an interest under a trust, he has a right to acquire an interest in securities or is under an obligation to take an interest in securities[; or

            (f)         he has a right to subscribe for securities;]

                        whether in any case the contract, right or obligation is absolute or conditional, legally enforceable or not and evidenced in writing or not, and it shall be immaterial that a security in which a person has an interest is unidentifiable.

  (3) Where persons having a joint interest in securities each is treated as having that interest for the purposes of this byelaw.

  (4) Subject to sub-paragraph (5), for the purposes of this byelaw a person also has an interest in securities if—

            (a)        his spouse or any child (including any step-child or adopted child) of his under the age of 18 years is interested in those securities;

            (b)        a body corporate controlled by him is interested in those securities; or

            (c)        a body corporate which is [that person’s holding company or] a subsidiary of that person’s holding company is interested in those securities.

  (5) The provisions of sub-paragraph (4)(c) do not apply in relation to paragraph 12(2) of this byelaw.

NOTE

112. Lloyd’s Advisers Byelaw No. 19 of 1993, 8 September 1993

COMMENCEMENT

  This byelaw came into force on 8 September 1993.

AMENDMENTS

  This byelaw was amended by

Companies’ Accounts (Miscellaneous Amendments) Byelaw (No. 15 of 1994)

Appeal Tribunal Byelaw (No. 18 of 1995).

REVOCATION

  This byelaw was revoked with effect from 9 September 1999 by byelaw No. 15 of 1999 dated 8 September 1999.

EXPLANATORY NOTE

(This note is not part of the byelaw.)

  This byelaw provides for the registration of a body corporate or partnership as a Lloyd’s adviser and for the review, renewal and withdrawal of such registration.

  The Council may not grant registration under the byelaw unless satisfied that the applicant is fit and proper to be a Lloyd’s adviser.

  The byelaw empowers the Council to impose conditions and make requirements regarding Lloyd’s advisers’ financial resources, and makes provision regarding accounting records, accounts and other reports, audit and annual returns.

113. Underwriting Agents’ Qualifications Byelaw No. 31 of 1993, 8 December 1993

COMMENCEMENT

  Part B of this byelaw will come into force on 1 January 1995 and Part C from 1 January 1997.

AMENDMENTS

  This byelaw was amended by:

Underwriting Agents’ Qualifications (Amendment) Byelaw (No. 44 of 1996).

REVOCATION

  This byelaw was revoked by the Training and Development Byelaw (No. 23 of 1998).

EXPLANATORY NOTE

  (This note is not part of the byelaw)

This byelaw provides that, as from 1 January 1995, no one shall hold the position of active underwriter unless he has at least five years’ experience of accepting risks on behalf of syndicates and is an associate of the Chartered Insurance Institute (paragraph 2). These provisions will not apply to active underwriters who are in post on 31 December 1994. Further, the Council will have a discretion to exempt those already qualified to become active underwriters as at that date; and may treat experience gained in the companies market as though it were gained at Lloyd’s when considering whether an active underwriter has satisfied the requirements of this byelaw (paragraph 3).

  Furthermore, the byelaw provides that, as from 1 January 1997, no one shall be an executive director of (or partner in) an underwriting agent, or its compliance officer, unless he has a relevant degree or professional qualification and has passed Part I of the Lloyd’s Market Certificate (“LMC”) or has passed LMC Part I and Part II (paragraph 4). There are exemptions for those directors who are in post on 31 December 1994 or had been employed by an underwriting agent as a senior manager for at least seven years ending on that date (paragraph 5).

  This byelaw also requires active underwriters, directors of underwriters and compliance officers to participate in programmes of continuing professional education (paragraph 6).

  The Council also has discretion under this byelaw to grant discretionary exemptions, limited in time but subject to conditions if appropriate, to allow prospective active underwriters, directors and compliance officers a reasonable time after taking up an appointment in which to comply with the requirements of this byelaw (paragraph 7).

114. Run-Off Companies Byelaw No. 2 of 1995, 10 January 1995

COMMENCEMENT

  Paragraphs 2, 3, 17 and 19 come into force on 1 October 1995. The rest come into force on 1 February 1995.

AMENDMENTS

  This byelaw was amended by

Appeal Tribunal Byelaw (No. 18 of 1995)

Loss Review (Revocation) Byelaw No. 16 of 1997)

Premiums Trust Fund and Regulating Trustee Byelaw (No. 22 of 1998)

Underwriting Agents (Amendment No. 16) Byelaw (No. 15 of 1999)

Run-Off Companies (Amendment) Byelaw (No. 2 of 2000)

Lloyd’s Policy Signing Office Byelaw (No. 11 of 2000)

Lloyd’s Claims Byelaw (No. 12 of 2000).

EXPLANATORY NOTE

  (This note is not part of the byelaw.)

  This byelaw provides for the registration of a body corporate or partnership as an approved run-off company and for the review, renewal and withdrawal of such registration. It also provides that managing agents must delegate their insurance functions and their administration and processing functions (as defined in the byelaw) in respect of longer term run-off accounts (where they are managing more than one such run-off account in respect of any one syndicate) to approved run-off companies. Further, such functions must be delegated in respect of any run-off account where this is the wish of a majority of relevant syndicate members voting in general meeting or where the Council so directs. Managing agents may, however, apply for approval to conduct such work themselves; and they may be granted interim approval in respect of the syndicates they manage when this byelaw comes into force.

  The Council may not grant registration under the byelaw unless satisfied that the applicant is fit and proper to be an approved run-off company.

  The byelaw empowers the Council to impose conditions and make requirements regarding approved run-off companies’ financial and operational resources, and makes provision regarding tendering, accounting and other records, accounts and other reports, audits, reviews and annual returns.

  This byelaw shall come into force in accordance with the provisions of paragraph 24.

The Council of Lloyd’s in exercise of its powers under section 6(2) of Lloyd’s Act 1982 by special resolution hereby makes the following byelaw.

Part A—Definitions

1. Interpretation

  (1) The provisions of Schedule 1 to this byelaw (interpretation) shall have effect.

  (2) For the purposes of this byelaw, the functions undertaken in the management of a syndicate set out in column 1 of the table in Schedule 2 to this byelaw (functions) shall be called “executive functions”, those set out in column 2 shall be called “insurance functions” and those set out in column 3 shall be called “administration and processing functions”.

Part B—Rules for Conducting Run-Off

2. Delegation of run-off functions

  [(1) Save where the Council otherwise permits or directs, no managing agents shall delegate any of its executive functions, insurance functions, administration and processing functions in respect of any run-off account of any syndicate managed by it otherwise than to an approved run-off company or another managing agent.

  (2) No managing agent shall delegate any of its executive functions, insurance functions, administration and processing functions in respect of any run-off account of any syndicate managed by it to another managing agent, without the written consent of the Council.]

NOTE

3. […]

NOTE

Part C—Registration of Approved Run-Off

Companies

4. Registration etc. to be under control of Council

  The registration of approved run-off companies and the renewal, review and withdrawal of such registration shall be under the control of the Council.

5. Register of approved run-off companies

  (1) The Council shall maintain a register of approved run-off companies. The register shall contain such particulars as the Council may from time to time determine.

  (2) The register shall be kept at the Society’s premises in the City of London and shall at all reasonable times be available for inspection by any person.

6. Applications for registration

  Applications for registration under this byelaw shall be made to the Council in accordance with such procedure and shall be accompanied by such documents and information, as the Council may from time to time determine.

7. Powers of the Council

  (1) Subject to this byelaw, the Council shall have power to:

            (a)        consider any application for entry in the register and any application for the renewal of any such entry;

            (b)        on the grant of any such application, cause the name of the applicant (and all applicable particulars which the Council may determine in accordance with paragraph 5(1)) to be entered in the register;

            (c)        review the registration of any approved run-off company in accordance with paragraph 9; and

            (d)        remove the name of any approved run-off company from the register in accordance with paragraph 10.

  […]

  (3) An approved run-off company may be registered under this byelaw as being authorised to undertake the insurance functions or administration and processing functions of a managing agent without limitation; or it may be registered as being authorised to undertake only certain of those functions, or to exercise such functions only in respect of certain classes of insurance business; and any such qualification shall be recorded against the name of the approved run-off company in the register.

NOTE

8. Criteria for registration

  (1) An applicant shall not be registered as an approved run-off company unless the Council is satisfied that:

            (a)        the applicant complies with the requirements of this and every other byelaw applicable to it (and all conditions and requirements imposed under them) for the time being in force; and

            (b)        the applicant is fit and proper to act as an approved run-off company.

  (2) In deciding whether or not an applicant is fit and proper to act as an approved run-off company, the Council shall have regard to the following criteria:

            (a)        the character and suitability of its directors (or, as the case may be, the partners), both individually and as a body;

            (b)        in the case of an applicant which is a body corporate, the character and suitability of any controller or connected company of the applicant;

            (c)        the organisation of its corporate infrastructure;

            (d)        the character, suitability, competence and experience of its personnel;

            (e)        the efficiency and effectiveness of its business systems and use of information technology;

            (f)         its strategy for taking on new business;

            (g)        the adequacy of its financial resources; and

            (h)        any other matters which, in the opinion of the Council, ought to be taken into account.

9. Conditions

  (1) In registering an applicant as an approved run-off company, or following a review of any such registration under paragraph 10 or under the Review Powers Byelaw (No. 5 of 1986), the Council may impose such conditions as are in its view necessary or expedient to ensure:

            (a)        that the applicant or approved run-off company is or will continue to be fit and proper to be an approved run-off company; and

            (b)        that the applicant or approved run-off company will or will continue to comply with the requirements of Lloyd’s Acts 1871 to 1982, the byelaws and regulations made under those Acts (and any conditions and requirements imposed thereunder) and for the time being applicable to it, and will pay or continue to pay due regard to any codes of practice issued by or under the authority of the Council.

  (2) Without prejudice to the generality of sub-paragraph (1), the Council may as a condition of registering an applicant as an approved run-off company or of permitting an approved run-off company to remain on the register following a review under paragraph 10 or under the Review Powers Byelaw (No. 5 of 1986, 406), require:

            (a)        the applicant or approved run-off company to execute such undertakings in such form and in favour of such persons as the Council may specify (whether generally or in relation to a particular case), which may in particular include an undertaking that the applicant or approved run-off company will, after the removal of its name from the register, provide to the Council such information, explanations, documents and other material relating to the affairs of a client of an approved run-off company; and

            (b)        any controller of the applicant or approved run-off company to execute such undertakings and guarantees in such form and in favour of such persons as the Council may specify (whether generally or in relation to a particular case), which may in the particular include:

            (i)         undertakings that the controller will not, save in such circumstances as may be specified, interfere with the conduct of the business of the applicant or approved run-off company by its directors or partners;

            (ii)         undertakings that the applicant or approved run-off company will at all times have sufficient resources to enable it to comply with the conditions and requirements prescribed under paragraph 16(1)(a) and for the time being applicable to it and any directions made or conditions imposed under this byelaw; and

            (iii)        guarantees that the controller will discharge the liabilities of the applicant or approved run-off company or such classes or descriptions of those liabilities as may be specified, subject to such limits (if any) and on such terms as may be specified.

10. Review of registration

  (1) The Council may at any time conduct a review of an approved run-off company’s registration under this byelaw for the purpose of determining:

            (a)        whether it continues to qualify for registration under paragraph 8; and

            (b)        whether there are or may be grounds for exercising any power of the Council under paragraph 9 or paragraph 11.

  (2) In connection with any such review the Council may require that the approved run-off company:

            (a)        provide such documents and information as the Council may specify; and

            (b)        comply with such requirements as the Council may determine relating to the procedures for conducting any such review.

11. Removal from the register

  […]

NOTE

  (2) The Council may at any time (whether or not as a consequence of a review conducted under paragraph 10) remove the name of an approved run-off company from the register if it:

            (a)        ceases to comply with any of the requirements of this byelaw for the time being applicable to it;

            (b)        is not in the opinion of the Council a body which is fit and proper to be an approved run-off company;

            (c)        ceases to carry on business as a run-off company;

            (d)        [fails or ceases to comply with any conditions imposed upon it by the Council under paragraph 9 or any term of any agreement or undertaking entered into or given by it pursuant to such a condition; or fails to cease to comply with any condition or requirement imposed upon it under the [[Lloyd’s Claims Byelaw (No. 12 of 2000, 528),]] Central Accounting Byelaw (No. 20 of 1998, 525) or the Lloyd’s Policy Signing Office Byelaw (No. 11 of 2000, 527); or]

            (e)        so requests.

NOTE

  (3) Where a controller of an approved run-off company has, on being required to do so by the Council under paragraph 9(2)(b), executed such an undertaking or guarantee as is referred to in that paragraph, the Council may at any time remove the name of the approved run-off company concerned from the register if the controller fails in a material respect to perform and observe the terms of the undertaking or guarantee or if the undertaking or guarantee ceases for any reason to be in full force and effect and binding on the controller.

  (4) Where the Council considers that there are grounds for removing the name of an approved run-off company from the register under any of the preceding provisions of this paragraph the Council may:

            (a)        postpone that removal for such period as the Council shall specify from time to time or until the Council shall otherwise determine;

            (b)        in connection with such a postponement at any time give such directions as it thinks fit, including without limitation:

            (i)         a direction that the approved run-off company shall not carry on any business or activity, or business or activity of a specified class or description, at Lloyd’s;

            (ii)         a direction that the approved run-off company shall not describe or hold itself out as an approved run-off company.

  (5) Where the Council, having under sub-paragraph (4) postponed the removal of the name of an approved run-off company from the register, at any time thereafter considers that there are no longer grounds for continuing to do so, the Council may, subject to sub-paragraph (6), remove the name of the approved run-off company from the register from such time as it may specify (provided that where the Council has decided to retain the name of an approved run-off company on the register for a specified period, the removal shall not take effect before the expiry of that period).

  (6) Where the Council proposes to remove the name of an approved run-off company from the register under sub-paragraph (2), (3) or (5), to postpone the removal of the name of an approved run-off company from the register under sub-paragraph (4) or to extend any such postponement under that sub-paragraph, the Council shall give to the approved run-off company concerned notice in writing of the Council’s intention specifying the reasons why the Council proposes to act and, before taking any action under any such sub-paragraph, the Council shall take into account any representations made by or on behalf of the approved run-off company concerned within the period of 14 days beginning with the date of the service of the notice. After taking account of such representations, the Council shall decide whether to:

            (a)        take the course of action originally proposed;

            (b)        take no further action; or

            (c)        take some other course of action open to it under any byelaw or regulation for the time being in force;

and shall forthwith notify the approved run-off company of its decision.

12. Rights of appeal

  [. . .]

NOTE

Part D—Rules for Approved Run-Off Companies

13. […]

NOTE

14. Controllers

  (1) No approved run-off company shall be a Lloyd’s broker without the prior consent of the Council.

  (2) Where an approved run-off company becomes aware that a person is proposing to become a controller of the approved run-off company, it shall forthwith notify the Council in writing of that fact.

  (3) The Council may at any time require any person who controls or proposes to control an approved run-off company to execute (and may require the approved run-off company to procure that he execute) such undertakings and guarantees in such form and in favour of such persons as the Council may specify (whether generally or in relation to a particular case).

15. Compliance officer

  (1) Each approved run-off company shall appoint a compliance officer who shall (without prejudice to the responsibilities of the directors or, as the case may be, partners of the approved run-off company) be responsible:

            (a)        for compliance by the approved run-off company with Lloyd’s Acts 1871 to 1982, any byelaw, regulations, requirements or conditions made thereunder and for the time being applicable to the approved run-off company and with any undertaking given by the approved run-off company to the Society; and

            (b)        for ensuring that the approved run-off company pays due regard to any codes of practice, market circular or other advice issued by or under the authority of the Council.

  (2) The person so appointed shall, unless the Council otherwise agrees, be a director of (or, as the case may be, partner in) the approved run-off company.

16. Power to make requirements etc

  (1) The Council shall have power to prescribe conditions and requirements regarding such matters as may be necessary or expedient for the regulation of approved run-off companies, and in particular their:

            (a)        possession and maintenance of financial resources,

            (b)        maintenance of accounting and other records and the preparation of audited accounts,

            [(bb)     performance of any discretions, powers or authorities of a managing agent in relation to any premiums trust fund or under any premiums trust deed;]

            (c)        sub-contracting of executive functions, insurance functions and administration and processing functions,

            (d)        provision of information to the Society,

            (e)        participation in Lloyd’s central services and any trade associations, and

            (f)         maintenance of insurance against claims in respect of civil liability.

NOTE

  (2) Contracts between a managing agent and an approved run-off company shall include such terms as may from time to time be prescribed by the Council.

  (3) The Council shall have power to make, from time to time, codes of practice which shall be observed by all approved run-off companies.

Part E—Rules for Managing Agents

17. […]

NOTE

Part F—Approval of Managing Agents

18. Approval or exemption of managing agents

  […]

NOTE

19. Tendering notwithstanding approval of managing agent

  […]

NOTE

20. Transitional provision (interim approvals)

  […]

NOTE

Part G—Fees

21. Power of the Council to prescribe fees

  (1) Every applicant for registration under paragraph 5 of this byelaw shall pay to the Society such fees as the Council may require.

  (2) Every approved run-off company shall pay to the Society such fees as the Council may require.

  (3) For the purposes of this paragraph the Council may:

            (a)        determine the amount of any fees in accordance with a specified scale or other specified factors;

            (b)        provide for the return or abatement of any fees in specified circumstances; and

            (c)        make different provision for different cases.

           

Part H—Miscellaneous

22. Application of other byelaws

  The provisions set out in Schedule 3 to this byelaw (application of other byelaws) shall apply to an approved run-off company as they apply to or, as the case may be, in relation to a managing agent.

23. Consequential amendments

  […]

NOTE

Part I—Commencement

24. Commencement

  (1) Paragraphs 2, 3, 17 and 19 of this byelaw shall come into force on 1 October 1995.

  (2) The remainder of this byelaw shall come into force on 1 February 1995.

Schedule 1—Interpretation

  1. In this byelaw, unless the context otherwise requires:

“approved run-off company” means a run-off company which has been registered under the provisions of this byelaw;

“associate” has the meaning given to it in the Lloyd’s Brokers Byelaw (No. 5 of 1988);

“compliance officer” means the person appointed by the approved run-off company under sub-paragraph 15(1) of this byelaw to perform the functions described in that sub-paragraph;

“connected companies” are companies in which the same person can (either alone or in association with others) control the exercise, in both companies, of 30 per cent. or more of the voting power exercisable at a general meeting or 50 per cent. or more of the voting power exercisable at board meetings and “connected company of the applicant” shall be construed accordingly;

“controller” means (a) in relation to a body corporate, a person who (either alone or in association with others) can control, directly, or indirectly, the exercise of 15 per cent. or more of the voting power exercisable at a general meeting of the body corporate, or another body corporate of which it is a subsidiary; and (b) in relation to a partnership: (i) any person in accordance with whose directions or instructions, either alone or with those of any associate or associates, the partners are accustomed to act (but disregarding advice given in a professional capacity); and (ii) any person who, either alone or with any associate or associates, is entitled to exercise, or control the exercise of 15 per cent. or more of the voting power at any meeting of the partners;

“general meeting” means a meeting called under paragraph 3 of the Syndicate Meetings Byelaw (No. 11 of 1994, 324);

“Lloyd’s entity” means a […] Lloyd’s broker, managing agent or members’ agent or any subsidiaries thereof;

NOTE

[…]

NOTE

[“premiums trust deed” and “premiums trust fund” have the respective meanings given in paragraph 1 of the Schedule to the Membership Byelaw (No. 17 of 1993, 111);]

NOTE

“relevant members” shall have the meaning given to it in the Syndicate Meetings Byelaw (No. 11 of 1994, 324);

“run-off company”means a company or partnership whose business is to perform insurance functions and administration and processing functions (or any parts thereof) on behalf of managing agents;

“run-off account” has the meaning given to it in Schedule 1 to the Syndicate Accounting Byelaw (No. 11 of 1987);

[…]

NOTE

“the register” means the register maintained under paragraph 5(1) of this byelaw; and

“trade association” means an association of persons of a common occupation which is recognised by the Council as forming a trade association.

Schedule 2—Functions

 

Column 1

Executive functions      Column 2

Insurance functions      Column 3

Administrative and processing functions          

Responsibility for syndicate strategy, including

         approval of forecasts and budgets

         claims reserving and commutation policy and approval

         annual solvency and syndicate accounts

         compliance with the Lloyd's Acts and other requirements of the Council

         management and control of expenses

Reporting and accounting to Names

Performance of duties under premiums trust deed—including (but not limited to) investment management policy

Management of conflicts of interest between syndicates and years of account

Responsibility for the performance of any delegated or sub–contracted functions.       Claims adjusting

Identifying reinsurance recoveries

Purchasing reinsurance

Evaluating reinsurance security

Effecting commutations, negotiations and set–off of inwards and outwards business

Preparing and maintaining reserving and actuarial data

Undertaking cash and investment management           Maintaining policy risk records

Administering and processing claims

Aggregating claims and calculating reinsurance recoveries

Credit control in collecting reinsurance recoveries

Maintaining statistical records  

 

Schedule 3—Application of Other Bylaws

Inquiries and Investigations Byelaw (No. 3 of 1983)

Issue of Proceedings by Council Byelaw (No. 18 of 1983, 402)

Paragraphs 3, 4 and 6 of the Suspension: Supplementary and Consequential Matters Byelaw (No. 19 of 1983)

Disclosure by Direction Byelaw (No. 21 of 1983, 404)

Review Powers Byelaw (No. 5 of 1986, 406)

Administrative Suspension Byelaw (No. 7 of 1987, 407)

Modified Arbitration Procedure Byelaw (No. 14 of 1987)

Paragraph 4 of the Insurance Ombudsman Bureau Byelaw (No. 1 of 1989, 411)

[…]

Misconduct, Penalties and Sanctions Byelaw (No. 9 of 1993)

Disciplinary Committees Byelaw (No. 10 of 1993)

Reinsurance to Close (Restriction) Byelaw (No. 15 of 1993, 317)

Information and Confidentiality Byelaw (No. 21 of 1993, 417)

NOTE

Schedule 4—Amendments

NOTE

115. Individual Registration Byelaw No. 3 of 1998, 4 February 1998

 

COMMENCEMENT

  This byelaw came into force on 4 February 1998.

AMENDMENTS

  This byelaw was amended by:

Premiums Trust Fund and Regulating Trustee Byelaw (No. 22 of 1998)

Underwriting Agents (Amendment No. 16) Byelaw (No. 15 of 1999)

Intermediary Amendment Byelaw (No. 10 of 2000)

Amendment Byelaw (No. 9 of 2001).

EXPLANATORY NOTE

(This note is not part of the Byelaw)

  This byelaw requires that individuals who carry out certain regulated functions can only do so if registered. It extends the individual registration scheme initially set up under the Individual Registration Byelaw (No. 13 of 1996) to directors, partners and compliance officers of Lloyd’s brokers. An application for registration must be supported by the person by whom the individual is to be retained (“the sponsor”). No amendment of registration can be effected without the Council’s consent.

  The criteria for registration are that the individual is fit and proper, possesses any Council prescribed qualifications, and is a suitable person to conduct the regulated functions for which he is registered with his sponsor.

  The Council has power to attach conditions to an individual’s registration and to require the individual to establish at any time that he continues to satisfy the criteria for registration.

The Council of Lloyd’s in exercise of its powers under section 6(2) of Lloyd’s Act 1982, by special resolution hereby makes the following byelaw.

1. General Principles

  (1) No […] run-off company [or] Lloyd’s underwriting agent […] shall permit any individual to carry out for it any regulated function (whether as employee, consultant or agent or in any other way) unless that individual is registered in accordance with the terms of this byelaw to carry out that regulated function for that person. Persons registered in accordance with the Individual Registration Byelaw (No. 13 of 1996, 115) shall be deemed to be registered in accordance with the terms of this byelaw.

NOTE

  (2) A person shall not carry out a regulated function unless he is registered to carry out that function in accordance with the terms of this byelaw.

  (3) A registered individual shall only carry out the permitted function as stated in his registration for the sponsor which supported his registration.

  (4) In determining an application for registration, including an application to amend registration, the Council may:

            (a)        grant any such application for registration;

            (b)        refuse any such application for registration;

            (c)        grant any such application for registration subject to such conditions as Council thinks appropriate;

            (d)        defer its determination of the application for such period as may be necessary to carry out further investigations or to allow for the provision of additional information.

  (5) The Council shall have power to review the registration of any registered individual and:

            (a)        impose such conditions upon the registration of the registered individual as Council thinks appropriate;

            (b)        suspend the registration of the registered individual’s entitlement to act as a registered person.

  (6) The Rules set out at Schedule 1 to this Byelaw (Rules for Individual Registration) shall have effect.

NOTE

2. The Register

  (1) The Council shall continue to maintain a register of individuals registered under this byelaw including details of any conditions attached to an individual’s registration.

  (2) The register shall be open to inspection by any person at such times as the Council may from time to time prescribe.

3. Rules

  The registration of individuals under this byelaw shall be in accordance with the Rules set out at Schedule 1 of this byelaw.

4. Interpretation

  The provisions of Schedule 2 to this byelaw (“Interpretation”) shall have effect.

5. Revocations and Amendments

  The Individual Registration Byelaw (No. 13 of 1996) is revoked.

6. Commencement

  The byelaw shall come into force on 4 February 1998.

Schedule 1—Rules for Individual Registration

1. Application for registration

  (1) Applications for registration under the Individual Registration Byelaw (No. 3 of 1998) (“the byelaw”) shall be made in accordance with these Rules.

  (2) An applicant shall apply in writing in such form and manner as the Council may prescribe.

  (3) An application for registration shall include written support by the person for which the individual is to carry out the regulated function (“the sponsor”) in such form and manner as the Council may prescribe, and the sponsor shall pay such fee as the Council may determine.

  (4) The burden is at all times upon the applicant to demonstrate to the Council that he satisfies the criteria for registration.

  (5) At any time after receiving an application and prior to its determination, the Council may:

            (a)        require an applicant to:

            (i)         provide additional information;

            (ii)         provide additional documents;

            (iii)        provide verification of any documents and information provided by the applicant in such manner as may be specified; and

            (iv)        answer questions in such manner as may be specified by the Council, which may include attendance by the applicant.

            (b)        require a sponsor to:

            (i)         provide additional information;

            (ii)         provide additional documents;

            (iii)        provide verification of any documents and information provided by the sponsor, in such manner as may be specified; and

            (iv)        answer questions in such manner as may be specified by the Council, which may include attendance by the sponsor.

            (c)        carry out such enquiries as the Council considers are appropriate.

  (6) An application for registration may be withdrawn at any time by the applicant by serving a written notice upon the Council to that effect. Notice shall be given in such form and manner as the Council may prescribe. The Council shall serve a copy of any such notice it receives on the applicant’s sponsor.

  (7) A sponsor may at any time withdraw his support for any application by serving a written notice upon the Council to that effect. Notice shall be given in such form and manner as the Council may prescribe. The