The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2004

Regulation 3

SCHEDULE Modification of Part 7 of the 1985 Act for syndicate accounts

1.  The accounts prepared under regulation 3 must comply with the provisions of the 1985 Act set out in paragraph (4) of that regulation subject to any necessary modifications to take account of the fact that syndicates are unincorporated.

2.  Where any of the provisions of the 1985 Act set out in regulation 3(4) impose a duty on the directors of a company, that provision shall, in the case of a syndicate, impose the same duty upon the managing agent of the syndicate.

3.  The following sections of the 1985 Act are modified in their application to syndicates as follows.

4.  Section 226(1) (duty to prepare individual accounts) is modified as follows—

(a) in subsection 226(2) for the word “may” substitute “must”; and

(b) at the end of subsection 226(2)(a), “or” is omitted;

5.  Section 231(2) (disclosure required in notes to accounts: related undertakings) is modified so that subsection (7) is omitted.

6.—(1) Section 232(3) (disclosure required in notes to accounts: emoluments and other benefits of directors and others) is modified as follows –

(a) For subsection (1) there shall be substituted the following—

“(1) The information specified in subsection (2) must be given in notes to the syndicate’s annual accounts.”;

(b) For subsection (2) substitute the following—

“(2) That information is—

(a) the aggregate amount charged to a syndicate by its managing agent, in respect of emoluments paid to the managing agents' directors, the active underwriter and (where applicable) the run-off manager of the syndicate, in the last financial year;

(b) the specific amount charged to a syndicate by its managing agent in respect of emoluments paid to the syndicate’s active underwriter and (where applicable) its run-off manager in the last financial year.”;

(c) for subsection (3) substitute the following—

“(3) In this section “emoluments”—

(a) includes salaries, fees and bonuses, sums paid by way of expenses allowance (so far as they are chargeable to United Kingdom income tax) and, subject to paragraph (b), the estimated money value of any other benefits received by him otherwise than in cash; but

(b) does not include any of the following, namely—

(i) the value of any share options granted or the amount of any gains made on the exercise of any such options;

(ii) any contributions paid, or treated as paid, in respect of him under any pension scheme or any benefits to which he is entitled under any such scheme; or

(iii) any money or other assets paid, received or receivable under any long term incentive scheme.”; and

(d) subsection (4) is omitted.

(2) In this paragraph—

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

“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 a 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 of an earlier year of account of that syndicate).

7.  Section 233(4) (approval and signing of accounts) is modified as follows—

(a) for subsection (1) substitute the following—

“(1) A syndicate’s accounts shall be approved and signed by the syndicate’s managing agent and where the managing agent is a body corporate or a partnership the accounts must be signed by a director or partner of the managing agent, authorised to sign on its behalf.”;

(b) for subsection (3) substitute the following—

“(3) Every copy of the balance sheet which is circulated published, issued or delivered to the Authority must state the name of the person who signed the balance sheet on behalf of the syndicate’s managing agent.”; and

(c) subsection (5) is omitted.

8.  Section 234(5) (duty to prepare directors' report) is modified as follows—

(a) in subsection (1), omit paragraph (b);

(b) in subsection (2)omit “the names of the persons who, at any time during the financial year were directors of the company, and”;

(c) subsections (5) and (6) are omitted.

9.  Section 234A(6) (approval and signing of directors' report) is modified as follows—

(a) for subsection (1) substitute the following—

“(1) The directors' report shall be approved and signed by the syndicate’s managing agent and where the managing agent is a body corporate or a partnership, the report shall be signed by a director or partner of the managing agent, authorised to sign on its behalf.”;

(b) for subsection (2) there shall be substituted the following—

“(2) Every copy of the report which is circulated, published, issued or delivered to the Authority shall state the name of the person who signed the balance sheet on behalf of the syndicate’s managing agent.”; and

(c) subsections (3) and (4) are omitted.

10.  Section 235(7) (auditors' report) is modified so that subsection (1) is substituted as follows—

“(1) A syndicate’s auditors shall make a report to the syndicate’s members on all annual accounts of the syndicate of which copies are to be sent to the syndicate members during the auditors' tenure of office.”.

11.  Section 236(8) (signature of auditors report) is modified as follows—

(a) for subsection (2) substitute the following—

“(2) Every copy of the auditors' report which is circulated, published, issued or delivered to the Authority shall state the names of the auditors and be signed by them.”; and

(b) subsections (3) and (4) are omitted.

12.  Section 240(9) (requirements in connections with publication of accounts) is modified as follows—

(a) in subsection (5), for “as required to be delivered to the registrar under section 242” substitute “as required to be sent to the Authority under regulation 5(2) of the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2004”;

(b) subsection (6) is omitted.

13.  Schedule 9A(10) (form and content of accounts of insurance companies and groups) is modified by the insertion of the following paragraph after paragraph 72—

“72A.   A description, which need not include particulars of funds held by members of the syndicate, must be given of funds which members are required to hold at Lloyd's.”.

(1)

Section 226 was substituted by S.I. 2004/2947

(2)

Inserted by the Companies Act 1989 and amended by S.I. 1993/1820 and S.I. 1996/189.

(3)

Inserted by the Companies Act 1989 and amended by S.I. 2002/1986

(4)

Inserted by the Companies Act 1989.

(5)

Inserted by the Companies Act 1989 and amended by the Companies (Audit, Investigations and Community Enterprise) Act 2004 (2004 c. ) and S.I. 1996/189.

(6)

Inserted by the Companies Act 1989.

(7)

Inserted by the Companies Act 1989 and amended by S.I. 2002/1986 and S.I. 2004/2947.

(8)

Inserted by the Companies Act 1989 and amended by S.I. 2004/2947.

(9)

Inserted by the Companies Act 1989 and amended by S.I. 1994/1935 and S.I. 2004/2947.

(10)

As substituted by SI 1993/3246 and amended by S.I. 2004/2947.