Y4909 - Economic Capital Assessment (ECA) Process for
Contents
1. Developments to the Member Modeller model since last year are outlined in Appendix 2 Please note that Lloyd s is currently evaluating the impact on member capital of changes to internal modelling methodology agreed with the PRA which is expected to change the amount of diversification that members receive and the way that capital is allocated between years of account If material we will provide further explanation of how these changes may affect member capital Page 1 of 8 Lloyd s is authorised under the Financial Services and Markets Act 2000 MARKET BULLETIN Introduction This Bulletin confirms the process for setting and modelling member capital for the 2016 underwriting year during calendar year 2015 Practical arrangements are described herein and a summarised business timetable and a description of key modelling and functional improvements are provided in the appendices Lloyd s requires the submission of an ultimate SCR uSCR via the Lloyd s Capital Return LCR The uSCR should take account of one year of new business in full attaching to the next underwriting year using Inception Date Accounting and the risks over the lifetime of the liabilities to ultimate assessed at 1 200 confidence level Managing agents are also required to prepare an SCR for each managed syndicate that meets the one year balance sheet to balance sheet Solvency II regulatory test at the 99 5th percentile Requirements for managing a2. Comprehensive firewalling to shield Lloyd s internal computer systems from external threats System monitoring to identify any unusual activity Data processing and storage facilities sited in secure locations to prevent unauthorised access Data stored and handled at all times in a manner that maintains its confidentiality integrity and availability If you have any questions or concerns or would like further information please contact Lloyd s Information Protection amp Continuity team at infosecurity lloyds com Appendix 5 Reporting Requirements in July amp September Scenarios for Agents to submit Documentation with the LCR No Major Model Change DOCUMENT JULY SEPTEMBER Methodology Document OPTIONAL MANDATORY Analysis of Change OPTIONAL MANDATORY Supplementary Questionnaire OPTIONAL MANDATORY Validation Report OPTIONAL MANDATORY Major Model Change in July Validation Report Run Off amp RITC Syndicates Seeking July Approval Validation Report No Major Model Change but Documentation Provided in July DOCUMENT JULY Methodology Document SUBMITTED Analysis of Change SUBMITTED Supplementary Questionnaire SUBMITTED Validation Report SUBMITTED Major Model Change in September SEPTEMBER OPTIONAL MANDATORY OPTIONAL MANDATORY SEPTEMBER MANDATORY MANDATORY MANDATORY MANDATORY If the Run Off RITC SCRs are agr
3. no right or remedy in respect of any statement representation assurance or warranty whether made negligently or innocently other than as expressly set out in these Terms Notices Notices which may be required to be given under these Terms by either party to the other shall be in writing and sent by email facsimile or by prepaid first class post to the following addresses Lloyd s Market Reserving amp Capital Lloyd s One Lime Street London EC3M 7HA and Firm or User the address of the registered office or such other addresses as may be notified to Lloyd s in writing from time to time In the case of a notice sent by email or facsimile it shall be confirmed by sending a copy of such notice by first class post Any notice sent by email or facsimile shall be deemed to be received on the same day of despatch and any notice sent by prepaid 16 16 1 17 17 1 18 18 1 first class post shall be deemed to be received three 3 days after the date of posting Governing Law and Jurisdiction These Terms and all matters arising from or in connection with them shall be governed and construed in accordance with English law and the parties hereby irrevocably submit to the exclusive jurisdiction of the courts of England and Wales Third Party Rights No person who is not a party to these Terms shall have any right under the Contracts Rights of Third Parties Act 1999 to enforce any term of these Terms Enforce
4. Users and that the level and nature of the access rights granted are appropriate to the Firm User s role and normal business activities 3 1 3 ensuring that Lloyd s is notified immediately so that the Firm User s username and password can be disabled to prevent them from accessing the Software if a Firm User ceases to be authorised by the Firm to use the Software for any reason including but not limited to change of function termination departure or any other action which ought to prevent them from having access to the Software and 3 1 4 monitoring Firm Users conduct to ensure that they comply with these Terms Use of the Software Users must only use the Software in accordance with these Terms Users must not provide any other individual or company with their user names and passwords A Firm User must only use the Software for the purpose of calculating indicative funds at Lloyd s ratios on an economic capital assessment basis for Members of Lloyd s for which the Firm acts and Individual Users for themselves Users may for these purposes download data from the Software Users must comply with the Applicable Regulations within the jurisdiction from which they are accessing the Software Users must not 4 5 1 use the Software for any purpose that is unlawful or prohibited by any applicable law regulation rule or legislation 4 5 2 post transmit or disseminate any information on or via the Software which is or may be har
5. anti virus software and to ensure compatibility with its equipment or 9 1 3 any content or information published on the Software is accurate or complete Any warranties which would otherwise be implied by law including without limitation warranties as to satisfactory quality fitness for purpose or skill and care are hereby excluded Content warranty Whilst Lloyd s and other third parties may provide certain data and information on the Software Firms and Users shall be entirely responsible for the content and accuracy of data and information on the Software Liability Lloyd s accepts no responsibility or liability for any loss of or corruption of data or information unauthorised access to alteration of or use of any records programs or files on the Software the Firm s or Users use of or inability to use the Software out of date or inaccurate or incomplete data or information held on the Software or any communications missed or delayed or otherwise between the Firm or Users and Lloyd s Lloyd s shall not be liable for any failure or delay in performing its obligations under these Terms that arises as a result of circumstances beyond its reasonable control 12 12 1 12 2 13 13 1 14 14 1 15 15 1 Lloyd s shall not be liable to the Firm or a User whether for negligence breach of contract misrepresentation or otherwise for i any direct loss or damage ii loss or damage arising f
6. behalf of the Firm named above to execute this application form further certify and confirm that the Firm will be bound by the Member Modelling Software User Terms and Conditions attached as amended from time to time Signed Role Print name Date This form should be completed by 1 A Firm using the Member Modelling Software for the first time only one form is necessary per Firm 2 A Firm that has changed their name 3 A Firm that has changed the Director who provided the Authorisation previously Appendix 4 Wording of User Terms amp Conditions MEMBER MODELLING SOFTWARE USER TERMS AND CONDITIONS IMPORTANT THESE TERMS AND CONDITIONS TERMS APPLY TO THE MEMBER MODELLING SOFTWARE THE SOFTWARE AVAILABLE ON THE LLOYD S WEBSITE www lloyds com YOU WILL BE ASKED TO READ AND ACCEPT THESE TERMS BEFORE ACCESSING THE SOFTWARE THESE TERMS ARE ISSUED BY LLOYD S 1 Definitions and Interpretation 1 1 In these Terms Applicable Regulations means all applicable legislation laws regulations rules codes of practice with which a Firm or User must comply when using the Software Firm means a Lloyd s Managing Agent or Members Agent that has been given permission by Lloyd s to access and use the Software Firm User means an individual registered at Lloyd s to use the Software on behalf of a Firm Individual User means a Member of Lloyd s registered to use
7. provisional exchange rates notified in market bulletin Y4882 Any submissions on or after 3 August Page 5 of 8 MARKET BULLETIN 2015 should be based on 30 June SBF final rates Resubmissions of the LCR made in March 2016 should be based 31 December 2015 year end rates of exchange Year End Adjustments Syndicates are required to keep under review the business plan and uSCR agreed for November CIL If circumstances change leading to a material change in SBF and or uSCR by the end of February 2016 then a resubmission of relevant returns must be made by 4 March 2016 This review should cover comparison of actual technical provisions on a Solvency II basis against projections actual volumes and terms and conditions achieved in respect of business written against plan and material reinsurance arrangements placed compared to plan A material change is considered to be any movement that would change the bottom line uSCR by more than 10 Should a resubmission be made the LCR must be modelled using the 31 December 2015 exchange rate and we would expect the risk margin total in the technical provisions to match that submitted in the December QMC The resubmission subject to agreement will be reflected in mid year CIL capital setting Any subsequent changes should be picked up in the following full year capital setting process although material changes to the 2016 SBF should be submitted throughout the year as they become known
8. the Software Information means any data submitted to the Software by a User Intellectual Property Rights means all rights including but not limited to trade marks names logos copyright database rights patents and know how Software means the Member Modelling Software User means a Firm User or an Individual User a clause or schedule unless the context otherwise requires is a reference toa clause of or a schedule to these Terms the singular includes the plural and vice versa unless the context otherwise requires 2 Terms and conditions of use 2 1 By completing and signing the Member Modelling Software Application Form the Firm agrees that it is bound by these Terms 2 2 By accessing the Software Users accept and are bound by these Terms 2 3 A Firm or User who has neither accepted nor been deemed to have accepted these Terms has any right to enforce them 2 4 Lloyd s reserves the right to grant restrict or revoke access of Users or prospective Users to the Software at any time 2 5 3 1 4 1 4 2 4 3 4 4 4 5 Lloyd s or its agents or suppliers may monitor usage of a User s username and password and unusual patterns of use may be investigated Firm Responsibilities A Firm is responsible for 3 1 1 providing Lloyd s with details of Firm Users who will have access to the Software in accordance with these Terms 3 1 2 ensuring persons are appropriate to be added as Firm
9. they are in line Managing Agents to re submit an LCR pro forma where there has been material change to syndicate ultimate SCR from that agreed for November Coming into Line based on 04 Mar 16 LCR year end exchange rate and latest QMC risk margin provisional dates and may be subject to change so this document should only be used as a guide Please refer to Lloyd s com for the latest information and full business timetable http www lloyds com the market business timetable Software updates A few improvements to the Member Modeller Below we have listed those which represent the more significant changes to functionality and usability Subject Description Members Agents will now be able to load and model Life underwriting in the Member Modeller as well as Non life The system will accept all participations either by import or manual input and will now enable the editing and calculation of the Life element Life Participations and ECA result will be Life ECA displayed in a new Life ECA tab modelling Reporting has been enhanced to display the Life ECA and its components on the Member Summary and a new report lists Life ECA information for selected members Participation Export functionality from the Admin menu administrators only Export has been amended to allow the export of all members rather than only active members An additional column has been added to the download file to reflect member stat
10. time For example a Net Solvency II balance at aggregated syndicate level 10m FAL valued at 130m gives available assets of 140m b SCR to ultimate 120m ECU at 35 42m gives a 2015 capital requirement of 162m 120m plus 42m c Net new capital required 22m 162m less 140m The release of margins to ensure the Solvency II technical provisions are on a best estimate basis means that full recognition is effectively provided for the margin in the net syndicate balance in the June balance sheet Lloyd s review of the submitted balance sheets and assessment of reserve risk will take this into account Managing agents should note when preparing their Solvency II technical provisions for QMC that Lloyd s does not expect the impact of the release of reserve margins in the UK GAAP technical provisions to be greater than the amount of the reserve margin reported in the Statement of Actuarial Opinion SAO Lloyd s will review the impact of these adjustments having regard to the information reported in the SAO Where Lloyd s considers the release reflected in the QMC to be excessive in this regard Lloyd s will either ask the managing agent to resubmit the QMC or to increase the syndicate s uSCR by the excess amount This would impact directly on the capital requirements for the member s supporting that syndicate Exchange Rates The initial submission of the SBF and LCR in July should be based on the
11. LLOYDS MARKET BULLETIN REF Y4909 Title Economic Capital Assessment ECA Process for 2016 Underwriting Year of Account Purpose To set out the ECA process for the 2016 underwriting year including basis of calculation and arrangements for distribution of the Member Modelling Software Member Modeller Type Scheduled From Henry Johnson Head Market Reserving and Capital Contact details 44 0 20 7327 5235 henry johnson lloyds com Date 2 July 2015 Deadlines e See timetable at appendix 1 for LCR and SBF submission dates e 13 August 2015 First 2016 release of Member Modelling Software Key Points to Note e The process to set member capital requirements for 2016 will remain largely unchanged from the previous year We will be using Solvency Capital Requirements on an ultimate basis uSCRs to meet Solvency I Regulatory Capital requirements and as a basis for Lloyd s own economic capital requirements e The Economic Capital Uplift ECU currently 35 is applied to the agreed uSCRs for all syndicates including life syndicates The agreed uSCR plus ECU determines the syndicate Economic Capital Assessment ECA requirement used in setting member Funds at Lloya s requirements e Assets available to meet member level capital requirements will be based on the 30 June valuation of Funds at Lloyd s FAL and syndicate net balances on a Solvency II basis per the Solvency II balance sheet QMC returns
12. Lloyd s of London One Lime Street London EC3M 7HA The application form can also be sent out electronically should you require it and requests should be made by email to the help desk for a word version of the form This is a one off requirement to acknowledge that the firm agrees to be bound by the user Terms and Conditions that are accepted by individual users upon access to the software Users will be required to accept the Terms and Conditions as part of the initial login process a copy of the terms and conditions is attached at Appendix 4 for information only System Requirements Users are advised to access the software via Lloyds com through Internet Explorer 7 8 and above or Firefox 3 5 3 and above Other portals may be used but have not been tested by Lloyd s and may result in a loss of user functionality or performance Internet Explorer users are advised to add the member modeller software to their list of trusted sites in the Internet Options section This allows exporting and importing of data to be completed without pop up blockers and delays occurring From within the site select the following Tools Internet options Security Trusted Sites Sites Add Training and Support An e mail help mailbox will be in operation to deal with queries on the ECA process and software and with other ECA related questions Agents with a Market Mail connection should access Ll
13. The existing requirement that following a major loss of capital members can be required to refresh capital sooner than the CIL timetable requires continues to apply subject to Lloyd s discretion Where there is a change in year end exchange rate compared to the SBF final rate 30 June Lloyd s will adjust the final ECA requirements for mid year CIL This ensures that capital requirements are exchange rate matched against the available capital and reserves Lloyd s will also normally make an adjustment for the final risk margin as reported in the December QMC Return Re submitted March LCRs if acceptable will not be included in this process A capital letter detailing the capital adjustments processed by Lloyd s as part of the mid year CIL exercise will be sent to managing agents in early April 2016 Market Changing Events In the event of significant late occurring insured or economic events it may be necessary for some syndicates to re submit the LCR after the September deadline to reflect the impact of such events on their SCRs Lloyd s will seek to adopt a pragmatic approach but action and timetable will depend on the materiality and timing of any such event and the constitution of the syndicate s stamp If required instructions and revised timetable will be communicated at that time Responsibilities MRC continues to be responsible for the member capital setting process comprising the Syndicate Benchmark Membe
14. agents are required to submit an initial SBF for ALL active syndicates on 2 July and at the same time must submit a full LCR pro forma based on that same SBF submission All syndicates must submit a final SBF and LCR by 15 September The final LCR should be supported by an analysis of change document describing any amendments from the initial submission Page 2 of 8 MARKET BULLETIN Syndicates will be required to re submit their SBF where whole account ultimate loss ratios ULRs are more than 5 percentage points below Lloyd s view Lloyd s will accept differences below 2 percentage points Where the difference is below 5 but above 2 percentage points Lloyd s will accept the SBF provided it is acceptable under the business plan review and for capital accept any of the following actions using Lloyd s view of loss ratios 1 2 Re submission of the LCR after a full re run of the model using the Lloyd s advised net ULRs This will need to be reviewed by the CPG before it can be accepted A re run of the model based on Lloyd s advised ULRs but without the re submission of the LCR The results of the re run would still be provided to Lloyd s but outside of a formal LCR submission If the number is accepted by the CPG then the difference to the submitted SCR will be reflected as a capital loading A bottom line adjustment to the SCR based on the difference in whole account net ULRs multiplied by the net premiu
15. eed in July then the LCR should not be submitted in September Documentation to evidence major model change Only the relevant sections documents are required in July Validation to support major model change must be submitted Full suite of validation tests report not required in July For any mid year coming into line LCR submissions you should contact the MRC analysts to discuss the reporting requirements
16. g software code existing now or in the future shall be and remain the property of Lloyd s The content published on the Software and all Intellectual Property Rights in it are owned by Lloyd s or that content is made available to Lloyd s under licence from third parties All Intellectual Property Rights in the Information shall remain in the ownership of the Firm or Individual User and the Firm or Individual User grants Lloyd s a perpetual licence to use the Information for its lawful business purposes Updates Lloyd s may make improvements or changes to the Software Changes or improvements that are material will be notified to Firms and Individual Users by Lloyd s Lloyd s may also modify these Terms at any time and such modification shall be effective immediately upon posting of the modified Terms on www loyds com Accordingly continued access or use of the Software is deemed to be acceptance of the modified Terms Material modifications to the Terms as determined in Lloyd s sole discretion will be notified to Firms and Individual Users by Lloyd s Data Protection Where any personal data as defined in the Data Protection Act 1998 the Act is provided by a Firm or a Firm User to Lloyd s the Firm confirms that 7 1 1 it has the consent of the owner of the personal data to provide such data to Lloyd s and 7 1 2 it has complied with its obligations as set out in the Act Lloyd s will process any pe
17. gents to submit the LCR pro forma and methodology coctment for 2016 have been set out in the SCR instructions on Lloyds com series TA and workshops Internal Model SCR Submission Requirements Lloyd s has reduced the reporting requirements for the July 2015 LCR submission A summary of the documents that should accompany the LCR pro forma in July and September are set out in Appendix 5 Agents retain the option to submit more documentation than the mandatory requirement and Lloyd s will endeavour to provide timely feedback on everything provided Managing agents applying for approval of Major Model Changes should provide the appropriate documentation enabling assessment of the changes This should be discussed in advance with the Market Reserving and Capital MRC Analyst Run Off and Reinsurance To Close RITC syndicates that provide full documentation with the July submission can request final sign off at that point i e on the expectation of no major changes through 2015 subject to Capital and Planning Group CPG approval Managing agents are required to submit a full validation report in support of their SCR by 22 September and have the option to submit an interim validation report on 2 July in order to obtain early feedback The validation report should be sent to the Solvency II mailbox Solvency2 lloyds com and copy to the MRC Analyst responsible for the managing agent Syndicate Business Plan Submissions Managing
18. if they arise will be included on the home page noticeboard and will also be e mailed to members agents as they are updated Page 3 of 8 MARKET BULLETIN Member Modeller Releases August Member Modeller Update Initial LCR pro forma and SBF submissions will be reflected in the first release of the Member Modeller made available on 13 August It should be noted that neither business plans nor SCRs are approved at this time and only a preliminary review would have been carried out September Member Modeller Update The Member Modeller will be updated on 23 September to reflect the final submission of the SBFs and non aligned syndicate LCRs provided by syndicates on 15 September before any review has been carried out October Final Member Modeller Update The Member Modeller will be updated to reflect the final CIL capital requirements for non aligned members on 23 October Member participations for non aligned members will be based on the Lloyd s Stamp System updated following each of the capacity auctions and for aligned members on SBF participation information form 420 until finalised Stamp data is received in December Members Agent Pooling Arrangement MAPA participations are based on notifications from members agents and are not guaranteed to be up to date Members agents can model the latest participations themselves together with MAPA constitution changes Further Releases of the Software In addi
19. latory authorities and as required by law or regulation Users personal information may be transferred to the above individuals and organisations located in countries which may not provide legal protection of information equivalent to that in the United Kingdom or the jurisdiction from which Users are visiting the Software Details of the individuals organisations and countries involved in a particular User s case will be provided on request Lloyd s only retains personal information for as long as is necessary for the purposes described above Getting in touch with us If you have any questions or concerns about privacy and security or your dealings with us please contact Lloyd s One Lime Street London EC3M 7HA UK or email infosecurity lloyds com LLOYD S WEBSITE SECURITY STATEMENT In order to provide Users of the Software with a personalised and secure experience Lloyd s requires all Users to authenticate to the Software using a unique user ID and password Once authenticated all information passed over the Internet between the User and the Software is protected by Secure Socket Layer encryption technology Lloyd s continually reviews its systems and processes to ensure that the Software provides the highest practicable level of protection All information submitted to the Software is passed to Lloyd s secure internal servers for processing and the following security measures are in place to ensure its protection
20. m volume No further resubmission of the LCR would be required as the calculation would be performed centrally by Lloyd s and capital would be loaded accordingly This adjustment is expected to give an equivalent result to the first two options Please also review the Year End Adjustments section for further information on the submission of SBF s post November CIL The Capital Setting Process for the 2016 Year of Account The ECA Member Modelling Software Member Modeller will be made available to registered users from 13 August 2015 and will be updated in accordance with the business capital timetable reflecting SBF and uSCR submissions Capacity Auctions and Coming into Line CIL deadlines All existing users members agents managing agents and members will be able to continue accessing the software with their current password Additional users can be added by making a request to Lloyds MRC Help lloyds com The software can be accessed via http www lloyds com The Market T ools and Resources Tools E Services Member Modeller Current Year 2015 capital requirements i e members mid year CIL and release test ECA requirements can be viewed through the current year version of the Member Modeller accessible via drop down selection on Home page From here it will also be possible to model member participations on new syndicate current year start ups and mid year pre emptions Details of these arrangements
21. ment The failure by either party to enforce any provision of these Terms shall not be deemed as a waiver of the right to enforce such term or condition PRIVACY amp SECURITY STATEMENT Lloyd s has taken steps to safeguard the confidentiality of information which identifies the Users personal information against unauthorised access amendment or deletion and to ensure access is only granted to authorised Users and only to the extent necessary This Privacy and Security Statement covers our treatment of the personal information we collect when Users are registered for or visit the Software 1 Information collection and use When Users register Lloyd s may ask for their name email address and other contact details as well as details about their status and role as an insurance professional When Users use the Software they are not anonymous to Lloyd s Lloyd s may also automatically receive and record information on our server logs from Users browser including their IP address and the page they requested Lloyd s may set and access Lloyd s cookies on Users computers Information sharing and disclosure Lloyd s will not sell Users personal information to anyone Lloyd s may disclose personal information about Users to its business associates and other professional advisers Lloyd s employees and agents suppliers and providers of goods or services financial organisations and advisers ombudsmen and regu
22. mful obscene defamatory or otherwise illegal 4 5 3 use the Software in a manner which causes or may cause an infringement of the rights of Lloyd s and or any other person 4 5 4 use any software routine or device to interfere or attempt to interfere electronically or manually with the operation or functionality of the Software including but not limited to uploading or making available files containing corrupt data or viruses via whatever means 4 6 4 7 5 1 5 2 5 3 6 1 6 2 7 1 7 2 4 5 5 deface alter or interfere with the look and feel of the Software or the underlying software code 4 5 6 take any action that imposes an unreasonable or disproportionately large load on the Software or related infrastructure 4 5 7 obtain or attempt to obtain access via whatever means to any part of the Software or the Lloyd s networks for which it is not authorised Lloyd s reserves the right to remove modify or alter any data submitted to the Software by a User in breach of clause 4 5 but this shall not affect any other remedy which may be available to Lloyd s Firms and Individual Users undertake to put systems in place to minimise the risk of viruses being transmitted or distributed over the Software including the use of and regular updating of commercially available virus detection software Intellectual Property All Intellectual Property Rights in the Software including but not limited to the underlyin
23. n credit Enhancements to the Member modeller software for 2016 now allow agents to load member life participations and to model and report Life ECAs for their members within the software Page 4 of 8 MARKET BULLETIN Economic Capital Uplift ECU The allocation of capital to members operates in a similar fashion to previous years in that the syndicate benchmark is scaled to equal the agreed uSCR requirement after uplift for economic capital Lloyd s will continue to apply an uplift to the minimum regulatory capital requirements to derive ECAs at member level The uplift currently 35 of syndicate uSCR is determined by the Franchise Board taking into account current circumstances The standard 40 minimum FAL requirement remains in force as does the reduced 25 minimum for members writing predominantly 85 EU personal lines business Summary of the Coming into Line equation The available assets to meet capital requirements will be the sum of net syndicate balances at 30 June 2015 on a Solvency II basis and the valuation of FAL at that date The net syndicate balances will be based on the Solvency II balance sheet submissions Submitted via the Quarterly Monitoring Report C QMC on 03 September subject to supporting review opinions from syndicate auditors and Lloyd s review The syndicate capital requirement will be the sum of the final SCR on an ultimate basis for the 2016 year of account and the ECU in force at the
24. oyds MRC Help the full e mail address is Lloyds MRC Help lloyds com Page 7 of 8 MARKET BULLETIN All users are advised to review the Member Modeller user manual and Frequently Asked Questions FAQ both of which have been updated for new developments detailed in Appendix 2 on Lloyds com before directing queries to Lloyd s All agent queries should be co ordinated through your agency s Administrator to improve the efficiency of the support function If the Administrator is unable to resolve the query the initial first line of support is the e mail help mailbox Any user that would like some additional training on use of the Member Modeller should also contact MRC via the mailbox and we can discuss the best way to meet those needs If you require any more information regarding the capital setting process and Member Modeller please contact one of the following Neil Wells ext 6034 neil wells lloyds com Kevin Barnes ext 5683 kevin barnes lloyds com Monazza Salar ext 5498 monazza salar lloyds com Henry Johnson Head Market Reserving amp Capital Page 8 of 8 Appendix 1 Economic Capital Assessment Timetable Deadline Topic Activity 02 Jul 15 Managing agents to submit 2016 provisional Syndicate Business Forecasts SBF for all 1pm SBF syndicates via the core market returns website Managing agents to submit a Lloyd s Capital Return LCR pro forma for all syndicates provisionally based on
25. r Capital Allocation Tool MCAT and Member Modelling Software This responsibility extends to recommending capital requirements for new syndicates The syndicate benchmark and MCAT software continue to be supported by Lloyd s High Performance Computing HPC team Page 6 of 8 MARKET BULLETIN The Relationship Management Department will facilitate the authorisation of new syndicates and should be approached by agents requiring information on the admission process They will provide application pack including a 3 year business plan template and catastrophe risk template Lloyd s Exposure Management Department will liaise directly with managing agents where they require additional information The CPG is responsible for approving the following e syndicate business plans e mid year pre emptions e syndicate LCR submissions e new syndicate capital requirements Member Modeller Software Requirements Application Form Any agents accessing the software for the first time only will need to print and complete Appendix 3 which is a conditional requirement of agents using the member modelling software Agents that have previously completed the form are not required to repeat the process The form needs to be signed by a Director on behalf of the firm and returned to Lloyd s as part of the registration process The form can be scanned and sent electronically to the email address listed above or sent by post to Kevin Barnes MRC G5
26. rom third party claims iii loss of profit or goodwill suffered by the Firm or a User or iv indirect or consequential loss or damage suffered by the Firm or a User Except as set out in these Terms all conditions warranties and representations whether express or implied by statute common law or otherwise are expressly excluded Nothing in these Terms shall operate to limit Lloyd s liability for i fraud or ii death or personal injury caused as a result of negligence on the part of Lloyd s or its employees Termination Lloyd s reserves the right to terminate at any time the Firm s or a User s access to the Software immediately for any reason including but not limited to the Firm and or Users abuse or misuse of the Software as determined by Lloyd s in its sole discretion Termination of these Terms will not affect any obligations that accrue before such termination Severability and inconsistency If any provision in these Terms shall be unlawful void or for any reason unenforceable that provision shall be deemed severable from the rest of the Terms and shall not affect the validity and enforceability of the remaining provisions of these Terms Entire Agreement These Terms constitute the whole agreement between the parties and supersede all previous agreements between the parties relating to their subject matter Each party acknowledges that in entering into these Terms it has not relied on and shall have
27. rsonal data provided by a Firm or User in accordance with the Privacy and Security Statement attached to these Terms 8 1 8 2 9 1 9 2 10 10 1 11 Security Lloyd s will use all reasonable endeavours to ensure that the Software is secure Details of the security measures for the Software are set out in the Lloyd s Website Security Statement attached to these Terms Lloyd s cannot guarantee that information displayed on the Software has not been interfered with If a Firm or User chooses to send any electronic communications to Lloyd s whether by email or otherwise they do so at their own risk Lloyd s cannot guarantee that such communications will not be intercepted or changed or that they will reach the intended recipient safely Warranties The Software is provided as is and Lloyd s gives no warranties in respect thereof Specifically but without limitation Lloyd s does not warrant that 9 1 1 Firms or Users will be able to use the Software or that the Software will continue to be made available in its current or any other form 9 1 2 the Software or any software or material of whatever nature available on or downloaded from it will meet a Firm s or User s data processing requirements be uninterrupted or free from errors defects or viruses or compatible with a Firm s or User s equipment or fit for any purpose It is the Firm s and the Individual User s responsibility to use suitable
28. the initial 2016 SBF submission on 2 July 2015 Where a major 02 Jul 15 model change has occurred the LCR submission should include documents to support 1pm LCR the changes Indicative Member Modelling Software released by Lloyd s based on 2016 yoa LCR and 13 Aug 15 ECA SBF preliminary submissions pre review by Lloyd s 15 Sep 15 Managing agents to submit final 2015 SBFs for all syndicates via core market returns 1pm SBF website Managing Agents to submit final LCR pro forma for all syndicates based on the final 2016 SBF submission The LCR submission should include full documentation on 15 Sep 15 parameterisation and methodology The submission must also contain an analysis of 1pm LCR change from the initial submission Second Indicative release Member Modelling Software update based on final 23 Sep 15 ECA submitted 2016 LCR and SBFs 30 Sep 15 Auction 1 Day one of Lloyd s capacity auction number one 07 Oct 15 Auction 2 Day one of Lloyd s capacity auction number two 14 Oct 15 Auction 3 Day one of Lloyd s capacity auction number three 23 Oct 15 SBF SBF approval deadline for non aligned syndicates Final Member Modelling Software release based on agreed SCR s for non aligned 24 Oct 15 ECA syndicates 12 Nov 15 Auction 4 Day one of Lloyd s capacity auction number four 20 Nov 15 SBF SBF approval deadline for aligned syndicates 25 Nov 15 CIL Deadline for active members to ensure
29. tion to the key release dates detailed above Lloyd s may make more regular updates to the Member Modeller as required This would be by agreement with members agents and outside of the stated timetable Appendix 1 Such updates will be advised with details and reason on the home page notice board We will also post warnings via the messaging function giving advanced notice of any times when it is necessary to make the system unavailable The downtime for updates will generally be no longer than 1 hour and would normally be performed outside of core working hours Notification of Syndicate ECA Lloyd s will issue to members agents at the time of each major data release a schedule of the latest syndicate ECA requirements USCR economic uplift for non aligned syndicates We will not comment on the make up of that ECA nor whether it has been adjusted Life Syndicates Capital for members on life syndicates will be set based on their share of the life syndicate s agreed uSCR submission uplifted by 35 to give syndicate ECA These life syndicate ECAs and ECA will be provided to members agents at the time of each Member Modeller release together with the syndicate ECA notification For life members with a spread across more than one life syndicate their capital will need to be calculated by the members agent using the Member Modeller It is calculated on a simple weighted average basis and there is no additional diversificatio
30. us active inactive modellable or dummy allowing easier filtering Participations Users reported the display of erroneous duplicated back year participations under certain circumstances last year although there was no impact on results This has now been fixed Duplicate Participations Reporting Improvements and minor bug fixes have been made to a number of reports Modelling Changes There have been a number of enhancements to Lloyd s internal modelling methodology as agreed with the Prudential Regulatory Authority PRA in seeking approval of Lloyd s internal model These changes will have an impact on the amount of diversification that members receive and the way that capital is allocated between years of account We are currently carrying out member impact assessments and we will comment further at a later date and take action where considered reasonable and necessary Appendix 3 Application Form MEMBER MODELLING SOFTWARE APPLICATION FORM In order to be provided with access to the Member Modelling Software please ask a Director or equivalent to complete and send this form to Kevin Barnes Market Reserving and Capital Lloyd s One Lime Street London EC3M 7HA Electronic copies will be accepted please send to Lloyds MRC Help lloyds com Members Managing Agents Details Firm s name Address City Postcode certify that am authorised on
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