Accounts

1. Every managing agent shall in respect of each syndicate that it manages as at 31 December that has a run-off account, prepare underwriting year accounts in respect of that run-off account for the members of the syndicate for that year of account unless those members agree unanimously in writing that no underwriting year accounts for that run-off account shall be prepared in respect of that syndicate.

2. Underwriting year accounts in respect of a run-off account shall be prepared on an underwriting year basis.

3. The provisions of [3. and 4. in Consolidated Requirements Part 2 > General Operational Matters > Syndicate Accounting > Accounts > Syndicate underwriting year accounts] shall apply to underwriting year accounts prepared in respect of a run-off account, with the modifications set out in this paragraph.

4. In the balance sheet format – 

(a) Asset item 3 shall refer to “reinsurance recoveries anticipated on gross amounts retained to meet all known and unknown outstanding liabilities”; and 

(b) Liabilities item 2 shall refer to “amounts retained to meet all known and unknown outstanding liabilities – gross amount”.

5. In relation to underwriting year accounts prepared at the date at which the run-off account would normally have been closed - 

 (a) item 4(b) in the profit and loss account format (technical account) shall refer to “the amount retained to meet all known and unknown outstanding liabilities, net of reinsurance”; and 

 (b) item 10 in the profit and loss account format (non-technical account) shall refer to “the result for the three years ended 31 December…for the…run-off account”.

6. All subsequent underwriting year accounts prepared in respect of that run-off account while it remains open shall show the transactions in respect of that run-off account in the year ended on the reference date under the headings listed in the format except that - 

(a) for items 2 and 4(b) in the profit and loss account format there shall be substituted “the amount retained to meet all known and unknown outstanding liabilities, net of reinsurance” at the beginning and at the end of that year respectively; 

(b) item 10 in the profit and loss account format (non-technical account) shall refer to “the result for the year ended 31 December…for the …run-off account”; 

and shall also show the cumulative transactions as at the reference date under the headings listed in the format, with the modifications specified in [5.(a) and (b) above].

7. Where a syndicate has more than one run-off account, the managing agent may instead of preparing separate underwriting year accounts for each run-off account, prepare combined underwriting year accounts in respect of those run-off accounts showing – 

(a) a separate profit and loss account for each run-off account; and 

(b) a combined balance sheet in respect of those run-off accounts as at the reference date.

8. The amounts to be included in respect of all items shown in the underwriting year accounts prepared in respect of a run-off account shall be determined in accordance with the principles set out in [1. to 4. in Consolidated Requirements Part 2 > General Operational Matters > Syndicate Accounting > Underwriting Year Accounts - Fundamental Principles and Accounting Policies], the provisions of Schedule 9A to the Companies Act 1985 (as modified by the Lloyd’s Syndicate Accounts Regulations) and accounting standards applicable to the syndicate’s underwriting year accounts as if the syndicate were an insurance company formed and registered under the Companies Act 1985.

9. Premiums and claims in respect of insurance contracts underwritten by the members of a syndicate and syndicate operating expenses shall be allocated to years of account in accordance with [5. and 6. in Consolidated Requirements Part 2 > General Operational Matters > Syndicate Accounting > Underwriting Year Accounts - Fundamental Principles and Accounting Policies].

10. The accounting policies adopted in determining the amounts to be included in respect of items shown in the underwriting year accounts in respect of a run-off account shall be stated in the notes to the accounts, and shall comply with the provisions of [7. in Consolidated Requirements Part 2 > General Operational Matters > Syndicate Accounting > Underwriting Year Accounts - Fundamental Principles and Accounting Policies] (disclosure of accounting policies).

11. It shall be stated whether the accounts have been prepared in accordance with applicable accounting standards and particulars of any material departure from those standards and the reasons for it shall be given.

1. A syndicate’s underwriting year accounts shall be approved by the syndicate’s managing agent and signed by a director or partner of the managing agent on its behalf.

2. The signature shall be on the syndicate’s balance sheet.

3. Every copy of the balance sheet which is issued by the managing agent shall state the name of the person who signed the balance sheet on behalf of the managing agent.

1. Every managing agent shall in respect of each syndicate managed by it at 31 December of the preceding year for which it is required by the Lloyd’s Syndicate Accounts Regulations or this byelaw to prepare underwriting year accounts, prepare a managing agent’s report.

2. Every managing agent’s report prepared under [1. above] shall – 

(a) include – 

 (i) in the case of a year of account closed at the reference date, a review of that year of account, including an explanation of any material surplus or deficiency which is attributable to an earlier year of account which has been reinsured into the year of account closed at the reference date, specifying the earlier year of account concerned; 

 (ii) in the case of a run-off account - 

 (aa) an explanation as to why that year of account has been kept open; and 

(bb) a review of that year of account, including the managing agent’s current evaluation of its expected outcome; 

 (iii) any other matters which the managing agent considers it appropriate to include in its report; and 

(b) be approved by the syndicate’s managing agent and signed by a director or partner of the managing agent on its behalf.

3. The particulars contained in a managing agent’s report shall be consistent with the underwriting year accounts to which it relates and shall not be misleading.

1. Every managing agent shall, in respect of each syndicate managed by it at 31 December of the preceding year for which it is required to prepare underwriting year accounts, prepare personal accounts (and, where applicable, syndicate MAPA accounts) complying with [2. and 3. below].

2. Except to the extent that he is a member of the syndicate by virtue of his participation in a MAPA, a personal account shall be prepared for each member for whom underwriting year accounts in respect of a closed year of account or a run-off account is required to be prepared at the reference date.

3. In relation to each MAPA through which members of the syndicate participate in the syndicate the managing agent shall prepare for the members’ agent concerned a syndicate MAPA account giving in relation to those members in aggregate in respect of such participations like information as is required to be given in a personal account prepared for a single member of a syndicate in respect of his participation otherwise than through a MAPA.

1. (a) Every personal account prepared for a member shall state the amount of such part of his member’s syndicate premium limit as is not allocated through a MAPA for each closed year of account or run-off account included in the annual report made up to the same reference date and the proportion which that amount bears to the syndicate allocated capacity, expressed as a percentage.

(b) Every syndicate MAPA account prepared for a members’ agent in respect of a MAPA shall state the aggregate amount of the members’ member’s syndicate premium limits allocated through the MAPA for each closed year of account or run-off account included in the annual report made up to the same reference date and the proportion which that amount bears to the syndicate allocated capacity, expressed as a percentage.

2. Every personal account shall as a minimum contain the following information in relation to the member’s participation in the syndicate otherwise than through a MAPA - 

(a) in respect of each closed year of account to which the personal account relates: 

 (i) the member’s profit or loss; 

 (ii) the amount charged to the member by way of underwriting agent’s salary or fee; 

 (iii) the amount of profit commission charged to the member, and how that profit commission has been calculated; 

 (iv) the amount of the Lloyd’s subscription paid on behalf of the member; 

 (v) the amount of any contributions to the New Central Fund made on behalf of the member, analysed between contributions made under paragraphs 4(1) and 4(2) respectively of the New Central Fund Byelaw (No. 23 of 1996); 

 (vi) any other expenses charged to the member; 

 (vii) the member’s result before overseas taxation; 

 (viii) the amount of overseas taxation charged to the member; and 

 (ix) the member’s result after overseas taxation; 

(b) in respect of each run-off account to which the personal account relates - 

 (i) in the case of the personal account made up to the date at which that run-off account would normally have been closed, the member’s run-off account result and any amounts charged to or paid on behalf of the member in respect of the items specified in sub-paragraph (a)(ii) to (vi) and (viii); 

 (ii) in any other case, the member’s run-off account result and any amounts charged to or paid on behalf of the member in respect of the items specified in sub-paragraph (a)(ii) to (vi) and (viii) during the year; and 

(c) the member’s net result.

3. Every syndicate MAPA account shall as a minimum contain like information in relation to the aggregate of the members’ member’s syndicate premium limits allocated through the MAPA as is required by paragraph 2 in respect of a single member’s participation otherwise than through a MAPA.

4. The information required by paragraphs 2 and 3 above may be presented in whatever format the managing agent may consider appropriate including electronic means.

The syndicate auditor shall in preparing any report under [Consolidated Requirements Part 2 > General Operational Matters > Syndicate Accounting > Accounts > Audit of run-off accounts, personal accounts and syndicate MAPA accounts] or under Regulation 4(4) of the Lloyd’s Syndicate Accounts Regulations, carry out such investigations as will enable him to form an opinion as to the following matters - 

(a) whether the managing agent has kept proper accounting records in respect of the syndicate; and 

(b) whether the underwriting year accounts, personal accounts or syndicate MAPA accounts to which his report relates are in agreement with the accounting records, 

and if the syndicate auditor is of the opinion that the managing agent has not kept proper accounting records in respect of the syndicate or if the underwriting year accounts, personal accounts or syndicate MAPA accounts to which the syndicate auditor’s report relates are not in agreement with the accounting records, the syndicate auditor shall state that fact in his report.

The underwriting year accounts and managing agent’s report required by [this Syndicate Accounting part of the Consolidated Requirements] shall be prepared within 3 months after the end of the syndicate’s financial year.

1. Every managing agent shall, free of charge, send a copy of the underwriting year accounts prepared under [Consolidated Requirements Part 2 > General Operational Matters > Syndicate Accounting > Accounts > Run-off accounts]  and a copy of the managing agent’s report that relates to those accounts prepared under [Consolidated Requirements Part 2 > General Operational Matters > Syndicate Accounting > Accounts > Managing agent’s report]  to each member to whom they relate, or to his members’ agent, within 3 months after the end of the syndicate’s financial year.

2. Every managing agent shall not later than the prescribed date in each year send to the Society – 

(a) a copy of the underwriting year accounts which it is required by paragraph 4 to prepare in that year; and

(b) in the prescribed format, a copy of every personal account and syndicate MAPA account prepared by it under [Consolidated Requirements Part 2 > General Operational Matters > Syndicate Accounting > Accounts > Personal accounts and syndicate MAPA accounts] and the syndicate auditor’s report that relates to those accounts.

3. The Society shall, within one month (or such other period as the Council may specify) after the date prescribed for the purposes of [2. above], send to every members’ agent, for each member for whom it acts as such in relation to any syndicate, and to every corporate member which has no members’ agent, a combined personal account in respect of all such syndicates, showing – 

(a) separately in respect of each syndicate the particulars specified in [Consolidated Requirements Part 2 > General Operational Matters > Syndicate Accounting > Accounts > Form and content of personal accounts and syndicate MAPA accounts]; and 

(b) in respect of all such syndicates in aggregate the particulars specified in [2. in Consolidated Requirements Part 2 > General Operational Matters > Syndicate Accounting > Accounts > Form and content of personal accounts and syndicate MAPA accounts].

4. The Society shall, within one month (or such other period as the Council may specify) after the date prescribed for the purposes of [2. above], send to each members’ agent operating a MAPA the syndicate MAPA account prepared for the members’ agent under [Consolidated Requirements Part 2 > General Operational Matters > Syndicate Accounting > Accounts > Form and content of personal accounts and syndicate MAPA accounts].

5. Every members’ agent which receives copies of any document under [3. above] shall, not later than the prescribed date, send one copy to the member for whom it has been prepared.

6. In this paragraph – 

(a) “the prescribed date” means such date in each year as the Council may from time to time prescribe for the purpose of the provision in which the reference occurs; 

(b) “the prescribed format” means such format as the Council may from time to time prescribe for the purpose of the provision in which the reference occurs; and 

(c) references to underwriting year accounts include the syndicate auditor’s report which relates to those underwriting year accounts.