1. A warm Welcome to the December market Breakfast Group

2. Breakfast Group agenda
Control Framework
Breakfast Group agenda
9:00
Arrival, breakfast & networking
All
9:15
Festive welcome!
Ali Dove
9:20
Canopius Coverholder Framework 
Jane Zonnenberg
9:40
Phase II project update
Approach to Phase III
Jaana Rouvari
10:00
Trading advice and compliance tools: Christmas update
Giles Taylor
10:15
Q & A
10:30
Close

3. Celebrating Success Ark Syndicate Management Ltd
Control Framework
Celebrating Success
Ark Syndicate Management Ltd
Beaufort Underwriting Agency Ltd
Marketform Managing Agency Limited
R&Q Managing Agency Limited

4. Canopius Coverholder Framework 2014

5. Canopius Coverholder Framework 2014
The Canopius Journey, so far…
Where Are We Currently?
What’s Next?

6. The Canopius Journey, so far…
Steep learning curve
Breaking the project down into bite-sized chunks

7. Bite-Sized Chunks Identify risk factors
Coverholder data iro the risk factors
Application of the risk factors
Overall rating mechanism for inherent risk
Approach for assessing risk
Audit results template
Bordereaux gap analysis
Update DA Audit Policy
Design BAU process

8. Risk Factors
Number of territories in which the coverholder writes business
Principal regional complexity (i.e. business written in Australia, Canada, Greece, Ireland, Italy or USA
Multiple classes of business (specifically cargo or bloodstock)
Method of introducing business (prior submit, coverholder discretion over pre-determined rates, no coverholder referral)
Route of business (direct, via broker, via master coverholder)

9. Overall rating mechanism for inherent risk
Excel spreadsheet
High/Medium/Low per risk factor
Assign values to H/M/L per risk factor

10. Approach for assessing risk
Audit results template
Bordereaux gap analysis
Desktop review

11. Audit results template
Lloyd’s 2014 audit scope converted to a template to grade audit reports
Converting the results of the audits into an assessed risk rating:
New reports received after template introduced
Retrospectively applied to reports received earlier in 2014

12. Bordereaux gap analysis
Bordereau template prepared based on data coverholder typically expected to provide
Gap analysis performed on each bordereau per BA
Simple yes/no answers on whether/not specific data is regularly provided
Values assigned to each data field according to significance
Total rating applied per binder
Desktop review - used for adhoc performance monitoring or where rating is marginal

13. Where Are We Currently?
Delegated Authority Audit Policy has been updated
Currently embedding the process of ongoing rating of a fluid coverholder population
Scoping out Control Framework recording and reporting mechanisms on BDX

14. What’s Next?
Review of the audit scope – removing possible duplications, or questions that we (as the Managing Agent) can answer
Identification of those cases where brokers are involved in the coverholders’ data
Identifying any possible areas of overlap with Conduct Risk questionnaire
Test and refine practical application of audit frequency decision process against backdrop of topical regulatory focus

15. Control framework Phase II Project Update Jaana rouvari

16. Today… 2014 round up Market progress Broker questionnaire
Control Framework
Today…
2014 round up
Market progress
Broker questionnaire
Lloyd’s support for Control Framework in 2015
Approach to Phase III – Open Market

17. The 2014 Christmas Breakfast Group Quiz
Control Framework
The 2014 Christmas Breakfast Group Quiz
Q1: What cuts of pork make bacon? (Hint: two answers!)
Q2: What is the traditional casing for a pork sausage?
Q3: To the nearest 10 – How many bacon and sausage sarnies have we gone through in 2014?
Q4: The history of the mince pie can be traced to the 13th century, what were the three key traditional fillings for this original pie?
Q5: How many market breakfast meetings have we had in 2014?
Q6: To the nearest 10 – How many people in total have attended the market breakfast group meetings?
A1: Pork belly & pork loin
A2: Intestine
A3: 520
A4: Meat, fruit and spices
A5: 5
A6: 587

18. Achievements and progress…
Control Framework
Achievements and progress…
on a more serious note
Lloyd’s market support through nearly 300 managing agent and broker meetings
Celebrating a few more sign-offs today, with rest progressing well
Some delays experienced due to renewals, changes in staff, other regulatory initiatives
Managing agent sign-off outlook
Q4 2014
30%
Q1 2015
50%
Q2 2015
80%
Q3 2015
90%
Q4 2015
100%

19. Broker questionnaire Control Framework
Developed by LMA’s Delegated Authorities Operations Committee
Looks to make the processing an intermediary undertakes transparent
Acts as a conversation opener between managing agents and those brokers who undertake processing of tax and regulatory information
Lloyd’s role is to facilitate the process of requesting and disseminating information
Lloyd’s will not take a view on the information provided by brokers

20. Control Framework
…to avoid

21. Control Framework Support in 2015
For managing agents yet to sign off
Your normal Lloyd’s Delegated
Authorities contact
For brokers
Martin Baker
Queries
Track progress through
6-monthly review meetings and additional catch ups
Communications
Queries
Broker questionnaire
Communications

22. What about Phase III- Open Market?
Control Framework
What about Phase III- Open Market?
Analysis and market consultation carried out over the past 6 months
Control Framework evaluated in light of a number of existing initiatives
Consideration given to ongoing market modernisation initiatives changing open market process and controls
Everything in the context of taking a pragmatic approach
Further mitigation of the Control Framework risks addressed through building robust central services
Addressed at the same time as LMG market modernisation initiatives
Negates the need for a separate managing agent sign-off

23. Control Framework Breakfast, 9th December Giles Taylor, Lloyd’s
Crystal/RLT update
Control Framework Breakfast, 9th December
Giles Taylor, Lloyd’s

24. Key items
Service standards and usage
New content
LITA vision & 2015

25. Service standards & usage
The headlines…
12,000 Crystal pages
15,000 Crystal users
c. 55,000 Crystal reports pcm
Still only 25% of users log in
c. 500 RLT reports

26. Service standards & usage

27. Non-US consumer information
Jurisdictions
Australia
Canada*
France
Germany
Italy
New Zealand
South Africa
Spain
Subjects
General
Definition of ‘consumer’
Consumer protection legislation
Insurance documentation
Pre-contractual notification and disclosure
Insurance documents
Processing and servicing of risks
Cancellation and non-renewal
Tacit renewal
Claims handling
Definition of ‘complaint’
Complaints handling (internal procedures)
Details of ombudsman (external procedures)
* At provincial level, Alberta, British Columbia, Manitoba, Ontario, Quebec

28. US consumer information
Consumer complaints
Posted: California, Florida, Illinois, Louisiana, Maryland, New Jersey, New York, North Carolina, South Carolina, Texas
By y.e. 2014: Connecticut, Delaware, Kentucky, Pennsylvania, USVI
2015: All remaining states
Homeowners Cancellation & Non-renewal
Posted: California, Connecticut, Delaware, Florida, Georgia, Illinois, Louisiana, Maryland, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Texas
Q1 2015: Massachusetts, Oklahoma, Virginia, Washington, Colorado, Tennessee, Ohio, Alabama, Missouri, Minnesota
Claims handling
California, Florida, New York, Texas

29. Quick search

30. Intermediary licensing
Completed for licensed territories
Drafts prepared for following priority countries, but not ‘live’
Argentina
Azerbaijan
Brazil
Chile
China
Colombia
Czech Republic
Ecuador
Finland
India
Remaining unlicensed territories drafted up to ‘U’, but not live
Indonesia
Malaysia
Mexico
Nigeria
Panama
Paraguay
Saudi Arabia
South Korea
Turkey
Vietnam

31. LITA vision and 2015 Key topics to address…
Risk Location Guidance – separate from coverholder approvals (Y4125)
US Law & Jurisdiction – reaffirm guidance (Y3406)
Renewal of online offering
Review current robustness of Crystal IT infrastructure
Consult with the market
Develop business case to overhaul Crystal, Risk Locator
LITA offering
Expanded provision of advice
Regulatory thought leadership
Above all, forward looking

33. Control Framework
Q & A

34. Control Framework
AND THE WINNER IS…

35. Further information on Control Framework controlframework@lloyds.com