CII LM2 key terms

A specialist insurance and reinsurance marketplace where members accept risk through syndicates, organised by managing agents and supported by brokers, rather than being a single conventional insurance company.

A group of underwriting members at Lloyd's whose capital is pooled to accept insurance risks for a defined underwriting year, each member sharing results in proportion to their participation.

A firm that operates one or more syndicates at Lloyd's, employing the underwriters, setting the business plan and managing capital, expenses and regulatory obligations on behalf of members.

An individual or corporate investor that provides capital to support one or more Lloyd's syndicates and whose liability for the syndicate's losses is limited to the funds they have committed.

An intermediary accredited to place business at Lloyd's, who negotiates with syndicates on behalf of clients and must meet Lloyd's registration, conduct and financial requirements.

A firm or individual authorised by a Lloyd's managing agent under a binding authority to issue and administer contracts of insurance on behalf of a syndicate, usually in a defined territory and class.

A written agreement giving a coverholder authority to underwrite and issue policies on behalf of a syndicate, setting limits on classes, territories, premium volumes and the terms that may be accepted.

An arrangement where an insurer or syndicate permits another party to perform underwriting, claims or administrative functions on its behalf, subject to agreed limits, controls and oversight.

An entity owned by Lloyd's members or others that provides support services such as underwriting, claims handling or administration to syndicates, and is subject to Lloyd's approval and oversight.

The document recording the shares and terms agreed by each subscribing insurer or syndicate for a risk, prepared by the broker and signed by subscribing underwriters to evidence the contract.

The underwriter who first assesses a risk, sets the terms and price, and whose acceptance guides other subscribing underwriters in a subscription market placement.

The insurers or syndicates that accept a share of a risk after the lead underwriter has set the terms, typically adopting the lead's wording and pricing with limited further negotiation.

A market structure in which several insurers each accept a percentage share of the same risk under one contract, as distinct from a single insurer accepting the whole risk.

The intermediary who presents a risk to underwriters, negotiates terms and shares, and coordinates the placement until the slip is fully subscribed and the contract is bound.

Lloyd's business placed through a broker on a risk-by-risk basis, where each risk is individually underwritten and agreed rather than handled under a delegated authority.

At Lloyd's, the central processing operation that handles accounting, settlement and documentation between syndicates, brokers and members, now largely delivered through the Lloyd's central services platform.

A fund at Lloyd's into which premiums and other receipts are paid and from which claims and expenses are met, providing security to policyholders and subject to strict rules on permitted assets.

The maximum amount of premium or risk a syndicate or insurer is permitted and financially able to accept in a year, determined by its business plan and capital resources.

The annual document in which a managing agent sets out a syndicate's intended classes, volumes, reinsurance and capital needs, submitted to Lloyd's for review and approval before underwriting begins.

The layered protection for Lloyd's policyholders, comprising syndicate assets, member capital and the central fund, which together support the market's ability to meet valid claims.

Lloyd's central assets, available at the discretion of the Council to meet liabilities of insolvent members or syndicates, forming the final layer of policyholder security.

The governing body of the Lloyd's market, responsible for its regulation, strategy and oversight, including approving members, managing agents and the central fund arrangements.

A Lloyd's body that oversees the market's performance and risk management, monitoring syndicates' business plans and intervening where performance or standards fall short.

A set of requirements covering areas such as governance, underwriting, claims and capital, against which managing agents are assessed to remain accredited to operate at Lloyd's.

The accounting year, usually the calendar year, in which a syndicate accepts risks, with results for that year's account reported until all its business is closed.

The distinct accounting entity for a syndicate's underwriting in a given year, kept open until its liabilities are settled or transferred, so profits and losses can be attributed to members.

An arrangement whereby a later year of account reinsures the remaining liabilities of an earlier open year, allowing the earlier year to be closed and its result distributed to members.

The period during which an insurer or syndicate stops accepting new business but continues to administer and settle existing policies and outstanding claims until liabilities are exhausted.

A court-approved mechanism allowing an insolvent or run-off insurer to settle and extinguish policy liabilities in an orderly way, often used to bring long-tail Lloyd's years to a close.

A vehicle established to reinsure and run off Lloyd's pre-1993 non-life liabilities, later transferring the remaining business to Berkshire Hathaway, allowing members to close those years.

The permission granted by Lloyd's to a managing agent to operate syndicates, subject to continued compliance with capital, governance and performance standards.

A locally licensed Lloyd's insurance company or branch in a foreign jurisdiction through which syndicates write business on a local admitted basis, subject to local regulation and capital rules.

Insurance written in a jurisdiction where the insurer is licensed and the policy complies with local law, often requiring locally approved wording, pricing and capital arrangements.

Risk written in a jurisdiction where the insurer is not licensed to transact, permitted only under specific rules such as surplus lines, and typically placed with sophisticated commercial buyers.

A framework allowing licensed brokers to place business with non-admitted insurers when admitted capacity is unavailable, subject to eligibility, disclosure and tax rules in the relevant jurisdiction.

The Lloyd's arrangement that governs how claims are handled, agreed and paid, including the role of claims leads, delegated claims authorities and the market's claims management standards.

The syndicate appointed to manage and agree a claim on behalf of all subscribing insurers, coordinating investigation, negotiation and settlement under the claims scheme.

A standardised London market placing document that replaced the traditional slip, setting out risk details, clauses, conditions and subscription in a consistent, contract-certain format.

The amount of capital an insurer or syndicate must hold to cover unexpected losses at a defined confidence level, calculated under the applicable regulatory regime such as Solvency II.

An intermediary granted underwriting authority by an insurer or syndicate, often handling pricing, policy issuance and sometimes claims, with its own staff acting for the principal.