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Y3821 Us Taxation

1. 22 Feb 06 Line 16 amended due to changes to Expenses forms SIS Run Off Lloyd s Syndicate Information Statement for 12 24 and 36m 2 ine 17 Feb 06 MAPPED TO NEW TRANSITION YR FORMS 3 Syndicate Number Year of Account Tax Year 4 5 Managing Agent Exchange Rate 6 7 Illinois Kentucky US Binding Authority Other US Situs Other Worldwide 8 9 A B C D E F 3 Appendix 4 1 Gross Premium Net of Brokerage Form Transition Yr PREMIUMS A13 Form Transition Yr PREMIUMS B13 Form Transition Yr PREMIUMS C13 Form Transition Yr PREMIUMS D13 Form Transition Yr PREMIUMS E13 Form Transition Yr PREMIUMS F13 2 Reinsurance to Close Assumed Form Transition Yr OTHER WORKINGS A4 Form Transition Yr OTHER WORKINGS B4 Form Transition Yr OTHER WORKINGS C4 Form Transition Yr OTHER WORKINGS D4 Form Transition Yr OTHER WORKINGS E4 Form Transition Yr OTHER WORKINGS F4 j 3 Reinsurance Ceded Form Transition Yr RI CEDED A6 Form Transition Yr RI CEDED B6 Form Transition Yr RI CEDED C6 Form Transition Yr RI CEDED D6 Form Transition Yr RI CEDED E6 Form Transition Yr RI CEDED F6 4 Claims Paid Form Transition Yr Claims form A6 Fo
2. 1 8 2 Signage of data The software requires that data is input using the same signage as required for the annual return Therefore premiums figures will be positive return premiums negative and claims negative etc 2 Naturally Open Years of Account only i e 2003 2004 and 2005 YOA 2 1 Premiums Schedule 40 The previous Closing Agreement used signed premiums as a basis for calculating US income which was the same basis used for the purposes of preparing the syndicate accounts Under annual accounting the premium included in the accounts and the Annual Report is the written premium The new Closing Agreement has brought the basis for US tax in line with the accounts and the annual return and therefore written premiums will be used as a basis for calculating US income However XIS data remains on the signed basis and therefore syndicates may not have sufficient information to allocate their written but not signed premiums between I K BA Other US Situs and Other Therefore the SIS software automatically allocates the written premium in the same proportion as the signed premium As premiums are allocated on a cumulative basis by the 36 month point of the year of account when signed should be largely equal to written incorrect allocations applied to accruals other than de minimus amounts will have been corrected All premiums are shown net of brokerage and include both direct and reinsurance premiums 2 1 4 Brought Forward S
3. 2 2 5 Calendar Year Movement of Claims Paid This figure is automatically calculated and is the total of lines 4 and 5 This total then flows through to line 4 of the SIS In the large majority of situations the figures shown on line 4 of the SIS will be the same as those given on line 2 of the Claims Schedule 2 3 Reinsurance Ceded Schedule 60 The software requires only a total amount allocated to each of I K BA Other US and Other and does not contain an automatic calculation to do this Therefore you will need to calculate the allocated amounts outside of the software and input only the totals in each column 2 3 1 Reinsurance Ceded Brought Forward The figure entered at line 1 Column F must be the same as the figure shown on the 2004 Transitional SIS for the same year of account at line 3 Column C 2 3 2 Reinsurance Ceded 2005 This figure will be pre populated from line 4 of the AR100 for the relevant year of account 2 3 8 Manual Adjustment of AR100 RI Ceded Value A manual adjustment will only be made in very exceptional circumstances and you must discuss with Lloyd s before making such an adjustment In the first instance please contact MSU as detailed in 1 1 2 3 4 Total Reinsurance Ceded Cumulative Reinsurance ceded needs to be allocated between K BA Other US Situs and Other Amounts should be allocated between these categories in accordance with the rules below a Facultative reinsurance premiums The coding o
4. A19 GBPUS ROE B19 C19 CANUS ROE Illinois Expenses 20 Input Import Input Import Input Import A20 GBPUS ROE B20 C20 CANUS ROE Kentucky Expenses 21 Input Import Input Import Input Import A21 GBPUS ROE B21 C21 CANUS ROE Exchange gains amp losses 22 Input Import Input Import Input Import A22 GBPUS ROE B22 C22 CANUS ROE Overseas Levy s 23 Input Import Input Import Input Import A23 GBPUS ROE B23 C23 CANUS ROE LDTF Custody Fees 24 Input Import Input Import Input Import A24 GBPUS ROE B24 C24 CANUS ROE Legal amp Prof Fees US bus 25 Input Import Input Import Input Import A25 GBPUS ROE B25 C25 CANUS ROE US Federal Excise Tax 1 26 Input Import B30 Lloyds Use Only 1 27 Input Import Input Import Input Import A26 GBPUS ROE B26 C26 CANUS ROE Lloyds Use Only 2 28 Input Import Input Import Input Import A27 GBPUS ROE B27 C27 CANUS ROE Lloyds Use Only 3 29 Input Import Input Import Input Import A28 GBPUS ROE B28 C28 CANUS ROE Lloyds Use Only 4 30 Input Import Input Import Input Import A29 GBPUS ROE B29 C29 CANUS ROE General Expenses Total 31 Column A Total for Column B Total for Column C Total for Column D Total for General Expenses General Expenses General Expenses General Expenses Form 1 Expenses Charitable Contributions 32 Input Import Input Import Input Import A32 GBPUS ROE B32 C32 CANUS ROE Entertainment Expenses 33 Input Import Input Import Input Import A33
5. Accomodation costs 5 Input Import Input Import Input Import A5 GBPUS ROE B5 C5 CANUS ROE Bank charges 6 Input Import Input Import Input Import A6 GBPUS ROE B6 C6 CANUS ROE Computer amp data processing 7 Input Import Input Import Input Import A7 GBPUS ROE B7 C7 CANUS ROE Commun Stationary amp print 8 Input Import Input Import Input Import A8 GBPUS ROE B8 C8 CANUS ROE Citibank Trustee amp Sec fees 9 Input Import Input Import Input Import A9 GBPUS ROE B9 C9 CANUS ROE Interest payable 10 Input Import Input Import Input Import A10 GBPUS ROE B10 C10 CANUS ROE Irrecoverable VAT 11 Input Import Input Import Input Import A11 GBPUS ROE B11 C11 CANUS ROE Lloyds Reg Levy 12 Input Import Input Import Input Import A12 GBPUS ROE B12 C12 CANUS ROE Legal Professional amp Audit 13 Input Import Input Import Input Import A13 GBPUS ROE B13 C13 CANUS ROE LPSO Fees 14 Input Import Input Import Input Import A14 GBPUS ROE B14 C14 CANUS ROE Management fees 15 Input Import Input Import Input Import A15 GBPUS ROE B15 C15 CANUS ROE Marketing 16 Input Import Input Import Input Import A16 GBPUS ROE B16 C16 CANUS ROE Overrider expenses 17 Input Import Input Import Input Import A17 GBPUS ROE B17 C17 CANUS ROE Bad debt write off 18 Input Import Input Import Input Import A18 GBPUS ROE B18 C18 CANUS ROE Claims handling 19 Input Import Input Import Input Import
6. Agents should Key value as If Field non zero warn user that MSU positive but require details of why Adjustment has negatives are been necessary allowed Reinsurance recoveries period derived from 2 Pre Filled AR100 line 16 return period Manual Adjustment of AR100 RI Recoveries 3 Input Total reinsurance recoveries 4 Input Input Input Input Input F1 F2 F3 Validation Rule Regions must sum to Worldwide Less Prior years reinsurance recoveries 5 Input Input Input Input Input F1 Warning Message Agents should key as positive but negatives are Total reinsurance recoveries in the year 6 A4 A5 B4 B5 C4 C5 D4 D5 E4 E5 A6 B6 C6 D6 E6 i Data Fields to appear on New SIS Data Collection SIS OTHER WORKINGS Form DATA COLLECTION Appendix 4 Reporting Yr of Account Drop Down List of expected YOAs inc Run off Return Period FROM CONTROL FORM K A B s D E F Illinois Kentucky Other Binding Authority Other US situs Other Worldwide Reconciliation Travers Armitage 5 3 5 s 5 3 Forte Tarte Yen Agers wl be rere to Key Line these values into the returns due to the diffiulties in No establishing bfwd values for open Yrs of Account After RITC assumed from related Syndicates B Fwd 1 Input Input Input Input Input A1 B1 C1 D1 E1 arning Message Agents should Key transition the forms will be require
7. GBPUS ROE B33 C33 CANUS ROE US Federal Excise Tax assumed 34 Input Import Input Import Input Import A34 GBPUS ROE B34 C34 CANUS ROE Gifts over 25 35 Input Import Input Import Input Import A35 GBPUS ROE B35 C35 CANUS ROE Meals and Entertainment 36 Input Import Input Import Input Import A36 GBPUS ROE B36 C36 CANUS ROE Motor 37 Input Import Input Import Input Import A37 GBPUS ROE B37 C37 CANUS ROE Travel Expenses 38 Input Import Input Import Input Import A38 GBPUS ROE B38 C38 CANUS ROE Form 1 Expenses Total 39 Column A Total for Column B Total for Column C Total for Column D Total for Form 1 Expenses Form 1 Expenses Form 1 Expenses Form 1 Expenses Solvency Expense Total 40 D31 D39 Column D Total for General Expenses Column D Total for Form 1 Expenses Member Expenses Cash Call Charges 41 Input Import Input Import Input Import A41 GBPUS ROE B41 C41 CANUS ROE Central fund Contributions 42 Input Import Input Import Input Import A42 GBPUS ROE B42 C42 CANUS ROE Interest on late Payments 43 Input Import Input Import Input Import A43 GBPUS ROE B43 C43 CANUS ROE Lloyds Subscriptions 44 Input Import Input Import Input Import A44 GBPUS ROE B44 C44 CANUS ROE Managing Agents Fees 45 Input Import Input Import Input Import A45 GBPUS ROE B45 C45 CANUS ROE Mangaging Agents Prof Commission 46 Input Import Input Import Input Import A46 GBPUS ROE B46 C46 CANUS ROE Members Ag
8. LQ LR LU LV LW in the segment PIA B under qualifier FIL Exclude items where the 4 character FIL code LFU1 LFU2 LFU3 LFU4 within the Line U Narrative in the FTX B segment NB This narrative line is only present for US and Canadian business Each transaction selected above is assigned to a single Reporting Category for output The Reporting Categories are as follows o Illinois Kentucky Binding Authority US Situs USD business o Other These categories have been specified as mutually exclusive following the rules below If FIL code 1 or 2 ILA1 then assign to Illinois Reporting Category If FIL code1 or 2 KYA1 or KYB1 then assign to Kentucky Reporting Category If not assigned above and the item is a Binding Authority slip type B then assign to Binding Authority Reporting Category If not assigned above and item has a FIL code 1 or 2 ILC1 USL1 USA1 USE1 USC1 USD1 KYA2 KYA3 KYA4 LLA2 then assign to US situs Reporting Category If not assigned above and item has settlement currency USD then assign to USD business Reporting Category If not assigned above then assign to other Reporting Category O O 0O 0 Each transaction should be assigned to a single Reporting Category following the same logic as left For USM Version 9 2 the 4 character FIL codes 1 and 2 are present in segment PIA B under qualifier FFL and the matching criteria can be applied to identify Illin
9. USD on form A Pre Post Trans Exp Data no conversion read apportion across regions using USPremiurrs ratio in A to E3 above Sample Calculation Rule 4 Data collected in USD on form A Pre Post Trans Exp Data no conversion reqd Apportion across regions using Allocation of 100 allowable US Expenses in line 3a above for relevant region as calculated in background workings for apportionment Retrieve Expenses data for line item in GBP on form A Pre Post Trans Exp Data converted to USS at specified Exc Rate A1 above multiplied by premiums in Line 4 line item in Cans on form A Pre Post Trans Exp Data converted to US at specified exc line item in USD on form A Pre Post Trans Exp Data premiums in Line 3 above Exchange Rates to be IRS average Rate for 31 12 last DATA FOR DISPLAY UPON SELCTION OF APPORTIONMENT CALCULATION FOR RUNOFF YRS OF ACCOUNT FOR TRANSITION YR Appendix 4 y Line No A B c D E F GBP to US ROE 1 1 83 CAN to USD ROE 2 2 39 Illinois Kentucky Other Binding Authority Other US Situs Other Worldwide A B Cc D E 36 Month US Premium 96 3 Input Input Input Input Input Row Total A3 B3 C3 D3 E3 Allocation of 100 allowable US Expenses 3a Apportion Other E3 Apportion Other E3 Apportion Other E3 Apportion Other E3 Row Total Repportionment of line 3 above must above across regions in above ac
10. be entered as a positive figure unless the reserves at 31 December 2004 was negative 2 6 Syndicate Expenses Schedule 30 Syndicate Expenses should be entered in original currency in the available columns Sterling US Dollars and Canadian dollars Expenses incurred in any other currency should be converted to Sterling at the average rate of exchange for the year and added to your Sterling expenses 2 7 1 General Expenses Lines 1 to 30 Expenses should be entered in original currency in the relevant column on lines 1 to 26 Lines 27 to 30 should not be used without obtaining prior permission from MSU 2 7 2 Form 1 Expenses Lines 32 to 38 These are expenses that are not allowable for US tax purposes however they are required in order that your total expenses can be reconciled to the annual return 2 7 3 Member Expenses Lines 41 to 48 These are member level syndicate expenses such as central fund contributions and members agents fees which will be picked at member level from distribution DD files when a Syndicate year of account reaches 36 months and thereafter if the year does not close However such expenses can be claimed at a syndicate level to reduce the taxable income at 12 and 24 months and can be claimed by entering the expense on the appropriate line MSU will reverse out the syndicate level figures when the Member level breakdown is received at 36 months Completion of member expenses is not mandatory 2 8 Apportio
11. gross or net premiums methodology as described above but by using the percentage of I K BA Other US Situs and Other as a percentage of the premiums covered by the policy not just US premiums 2 3 5 Prior Years Reinsurance Ceded Cumulative Prior Yr In 2005 this figure will need to be manually input from line 3 of the 2004 Transitional SIS columns F E D G and H 2 3 6 Total Reinsurance Ceded in the year This figure is calculated automatically as the total of line 4 less line 5 and flows through to line 3 of the SIS 2 4 Reinsurance Recoveries Schedule 65 The software requires only a total amount allocated to each of I K BA Other US and Other and does not contain an automatic calculation to do this Therefore you will need to calculate the allocated amounts outside of the software and input only the totals in each column 2 4 1 Reinsurance Recoveries Brought Forward The figure entered at line 1 Column F must be the same as the figure shown on the 2004 Transitional SIS for the same year of account at line 6 Column C 2 4 2 Reinsurance Recoveries 2005 This figure will be pre populated from line 16 of the AR100 for the relevant year of account 2 4 3 Manual Adjustment of AR100 RI Recoveries Value A manual adjustment will only be made in very exceptional circumstances and you must discuss with Lloyd s before making such an adjustment In the first instance please contact MSU as detailed in 1 1 2 4 4 Total Reinsurance
12. in USD All FIL codes but Excluding any transition that has already been picked up under 1 2 3 or 4 above 6 0 Total worldwide All Premiums AP RP TTY Stmts irrespective of settlement currency All FIL codes G BIC Staff plc USTax A ppendix 3b doc SIS line No 05 Feb 06 MAPPED TO NEW TRANSITION YR FORMS Appendix 4 Lloyd s Syndicate Information Statement Syndicate Number Year of Account Tax Year Managing Agent Exchange Rate Illinois Kentucky US Binding Authority Other US Situs Other Worldwide A 03 D E F 1 Gross Premium Net of Brokerage Form Run Off Calcs A4 Form Run Off Calcs B4 Form Run Off Calcs C4 Form Run Off Calcs D4 Form Run Off Calcs E4 Form Run Off Calcs F4 2 Reinsurance to Close Assumed Form Other Workings A24A3 Form Other Workings B2 B3 Form Other Workings C2 C3 Form Other Workings D2 D3 Form Other Workings E2 E3 Form Other Workings F2 F3 3 Reinsurance Ceded Form Other Workings A10 Form Other Workings B10 Form Other Workings C10 Form Other Workings D10 Form Other Workings E10 Form Other Workings F10 4 Claims Paid Form Run Off Calcs A7 Form Run Off Cales B7 Form Run Off Cales C7 Form Run Off Calcs D7 Form Run Off Calcs E7 Form Run Off Ca
13. salvage including settlement costs and less facultative reinsurance recoveries c Reinsurance policies which reinsure both US dollar and other business Reinsurance recoveries under reinsurance contracts covering US dollar and other business including whole account reinsurances should be split using the same gross or net claims methodology as described above but by using the percentage of I K BA Other US Situs and Other as a percentage of the claims covered by the policy not just US claims 2 4 5 Prior Years Reinsurance Recoveries Cumulative Prior Yr In 2005 this figure will need to be manually input from line 6 of the 2004 Transitional SIS columns F E D G and H Please note that the order of columns on the transitional SIS is different to that shown on the SIS for 2005 2 4 6 Total Reinsurance Ceded in the Year This figure is calculated automatically is the sum of lines 4 and 5 and flows through to line 6 of the SIS 2 5 Other Workings Schedule 70 2 5 1 Please ignore line 1 on this Schedule 2 5 2 RITC from Unrelated Syndicates 2 5 3 RITC from Related Syndicates An RITC assumed from a Related Syndicate line 3 must be distinguished from an RITC assumed from an Unrelated Syndicate line 2 An RITC assumed must be allocated to K BA Other US Situs and Other in the same proportion as the closing syndicate reported it on the SIS of the ceding syndicate The assuming syndicate must also report the RITC assumed premi
14. same syndicate as at either 31 December 2004 or 2005 2 1 6 Total Written Premium net of RITC Line 6 is automatically calculated and is the total of lines 4 and 5 2 1 7 Brought Forward Written Premium Net of RITC The figure which needs to be input into Worldwide column is the total written premium for the year of account as at 31 December 2004 2 1 8 Cumulative Total Written Premium net of RITC Line 8 is automatically calculated as the sum of lines 6 and 7 2 1 9 Allocation of Written Premiums Line 9 automatically allocates the worldwide Cumulative Total Written Premium net of RITC on line 8 across the columns using the ratio of Total Signed Premium at line 3 2 1 10 Override Allocation As explained above the calculation at line 9 allocates the written premium in proportion to the signed premium In effect any written but not signed premium is assumed to be in the same proportion to the premiums signed in the year As the calculation is performed on a cumulative basis in each calendar year of the year of account up to the 36 month point any over or under allocations of written but not signed premiums to specific categories of business in one year will automatically be adjusted in the following year when the premium is signed The allocation at line 9 assumes that managing agents will not have any more specific data which would enable them to allocate written premium on a more accurate basis However if managing agents do have more accu
15. treaty sections within treaty These amounts are supplied in Settlement statements use the Syndicate Net Currency on the Transactional listings and Amount in Settlement Currency in are equivalent to the Settlement LSR amount segment TRA E under qualifier NET shown on Lloyd s Account Enquiry LAE preceding the PIA D segment selected as above This represents the premium related element of the total net settlement amount e Noconversion to USD required e No conversion to USD required e Total the net settlement amounts for each e Total the net settlement amounts for each Reporting Category by Settlement Currency Reporting Category by Settlement Currency The totals are supplied in Settlement Currency on the DEV 484 report for input to the SIS system Annual Claim Reporting for 2003 amp 2004 The extraction is the same as for the Premium for 2003 amp 2004 except that Lloyd s Category Codes of 4 and 5 are used on both sides to identify both treaty and non treaty paid claims Annual Claim Reporting for 2005 The extraction is the same as for the Premium for 2005 except that Lloyd s Category Codes of 4 and 5 are used on both sides to identify both treaty and non treaty paid claims Version 4 26 5 6 US Income Tax and Federal Excise Tax Appendix 3b FIL code and country of origin parameters 1 0 Illinois Description USD USD TF FIL Illinois Licenced Insurance ILA1 I
16. using Others Ri 44C24 D244E24 Overseas Levy s 25 Calculate using Rule 3 Calculate using Rule 3 Calculate using Rule 3 Calculate using Rule 3 late using Rule 3 A25 B25 C25 D25 E25 3a Overrider expenses 26 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others Ri A26 B26 C26 D26 E26 Bad debt write off 27 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others RlA27 B27 C27 D27 E27 Claims handling 28 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others RiA28 B28 C28 D28 E28 LDTF Custody Fees 29 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others Ri A29 B29 C29 D29 E29 Legal amp Prof Fees US bus 30 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others Ri A30 B30 C30 D30 E30 US Federal Excise Tax 1 31 Calculate using Rule 4 Calculate using Rule 4 Calculate using Rule 4 Calculate using Rule 4 A31 B31 C81 D3T Winois 32 Convert to USD and all here C32 Rule 5 Kentucky 33 arena USD and all her B33 le 5 Lloyds Use Only 1 34 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others R A344B34 C34 D344E34 Lloyds Use Only 2 35 Rule 2 no apportion su
17. using Rule 1 Calculate using Rule 1 Calculate using Others RuldA27 B27 C27 D27 E27 EET gie tae idis PostiTrensiexp Data US Federal Excise Tax 1 28 Calculate using Rule 4 Calculate using Rule 4 Calculate using Rule 4 Calculate using Rule 4 j A28 B28 C28 D28 E pans iC on form Aere Post Trans Exp Data converted to Illinois 29 Convert to USD and all C29 US at specified exc rate A2 above here Rule 5 Kentucky 30 Convert to USD and all B30 here Rule 5 Lloyds Use Only 1 31 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others RuldA31 B31 C31 D31 E34_ Lloyds Use Only 2 32 Rule 2 no apportion sum E32 GBP USD CAN Lloyds Use Only 3 33 Calculate uS ing Rule 3 Calculate using Rule 3 Calculate using Rule 3 Calculate using Rule 3 Calculate using Rule 3 c Em ud 3a Sample Calculation Lloyds Use Only 4 34 Calculafe using Rule 4 Calculate using Rule 4 Calculate using Rule 4 Calculate using Rule 4 A34 B34 C84 D34 un collected in USD no conversion redd apportion arose regione Ucing Total for SIS Summary RunOff 35 Column A Total for Column B Total for Column C Total for Column D Total for Column E Total for Column F Total for USPremiums ratio in A to E3 above Apportioned General Apportioned General Apportioned General Apportioned General Apportioned General Apportioned Gener penses Expenses Expens Expenses Expenses Expenses Rule 5 Region
18. years of account Syndicates that did not write any US business in an open year will still need to complete an SIS for that year However as the backing schedules to the SISs are pre populated with worldwide figures all that such a syndicate will need to do is ensure that the pre populated figures are correct complete the expenses schedule and check that no XIS data appears in either the K BA or Other US Situs columns and submit the SIS If a syndicate which does not write any US business discovers that XIS data has been inserted into any of the US columns of the SIS please contact Juliet Phillips from Lloyd s Tax immediately to discuss 1 5 Rate of Exchange a All items other than expenses Dollars must be used when inputting all figures into the SIS software apart from expenses Both the AR100 and the AR223 show three columns Column A is the total in sterling column B shows the sterling business plus all currencies except US dollars converted into sterling and column C shows the US dollar business The rate of exchange for converting foreign currencies into sterling for the annual return is not prescribed but for US tax purposes all items other than expenses must be converted at the Lloyd s year end rate Therefore in preparing the SIS items in column B will be converted into US dollars at the Lloyd s year end exchange rate and added to the figures given in column C b Expenses The Closing Agreement prescribes the average ra
19. 1 Calculate using Rule 1 alcu ate using Rule 1 Calculate using Others Ru dA5 B5 C5 DB EB Withholding Tax 5 Subscriptions 6 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others Rulg A6 B6 C6 D6 E6 Salaries amp Related Costs 7 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others RulgA7 B7 C7 D7 E7 Sample Calculation Premium Levy 8 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others RulgA74B74C7 D74E8 Rule 2 No Apportionmnt reqd Accomodation costs 9 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others Rule A9 B9 C9 D9 E9 Bank charges 10 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others RuldA10 B10 C104D104EfO If data collected in USD on form A Pre Post Trans Exp Data no conversion reqd Computer amp data processing 11 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others RulgA11 B11 C11 D11 E11 VSSGETTISMSSSI Commun Stationary amp print 12 Calculate using Rule 1 Calculate using Rule 1
20. 15 C15 D15 E15 Total US Premiums period derived from return 1 PreLoaded XIS PreLoaded XIS Preloaded MIS iDxol cle ct VIS PreLoaded XIS A16 B16 C16 D16 E16 For the Transition Year Agents will be required to Key For the Transition Yaar Agerfs wiil be raquired to Keay 7 z Manual Adjustment of US Premiums ires vues Into ihe mare dae to the dre ia Input these values into the returns due to the diffiulties in Input A17 B17 C17 D17 E17 Warning message if any column other than worldwide not zero MSU will require reasons as Total Cumulative US Premiums lestablishing bfwd values for open Yrs of Account After B15 B16 B17 establishing bwd valuas for open Yrs gf Account After E15 E16 E17 F15 F16 F17 Reqd for Expense apportionment No Validation available transition the forms will be required to derive these values as per the Post Transition Premiums form transition the forms will be required to derive these values as per the Post Transition Premiums form Appendi x4 x4 Data Fields to appear on New SIS Data Collection Form Claims Paid B Wd Claims paid Overide Allocation Cummulative Total Less Claims Paid B Wd Calendar Year Movement of Claims Paid SIS CLAIMS DATA COLLECTION Reporting Yr of Account Drop Down List of expected YOAs Return Period From control form A Line No Illinois B Kentucky Cc D Other US situs Other Binding A
21. Calculate using Rule 1 Calculate using Rule 1 Calculate using Others RuldA12 B12 C124D124E12 If data collected is in GBP or CAN on form A Pre Post Trans Exp Data then Citibank Trustee amp Sec fees 13 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others RulgA1 3 B13 C13 D1 3 E13 Retrieve line item from form A Pre Post Trans Exp Data in GBP converted to US Interest payable 14 Calculate using Rule 1_ Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others RuldA144B14 C144D144E14 at specified Exc Rate Al above Irrecoverable VAT 15 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others Ru ig A15 B15 C1 5 D15 E15 Line item from form A Pre Post Trans Exp Data in CANS converted to GBP A2 Exchange gains amp losses 16 Rule 2 no apportion sum E16 ROVE ema Ja ati specced exc irate A above Lloyds Reg Levy 17 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others RulgA17 B17 C17 D17 E17 Legal Professional amp Audit 18 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others RuldA18 B18 C18 D18 E18 LPSO Fees 19 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others Rul A19 B19 C19 D19 E19 Managemen
22. IN Additionally you will be requested to check revised transitional SISs that are in the process of being returned to you XIS are able to provide a breakdown of the high level data to assist with the reconciliation of the data Requests for the data should be sent to data information xchanging com or requested on 01634 887800 There may be areas of subjectivity where data included within the XIS report differs from the syndicate s basis of preparation The document attached as appendix 3a shows how the data in the report used by MSU has been reflected in the signing messages sent to managing agents by XIS A full description of the FIL codes utilised is attached as appendix 3b The new SIS must be submitted to Lloyd s electronically via the Lloyd s Core Returns website The SIS uses data available via the Data Warehouse from the Syndicate annual return and XIS data to pre populate some of the fields The specification used to develop the software is attached as appendix 4 Where fields have been pre populated the managing agent by submitting the SIS is signing off that the figures as pre populated are correct Therefore it is very important that these figures are checked and verified to syndicate records before the SIS is submitted 5 Identification of syndicates which need to prepare an SIS in respect of 2005 All syndicate years of account that were open during 2005 including run off syndicates will receive a pre populated SIS which ne
23. LLOYDS MARKET BULLETIN From Christine Allcott Date 31 May 2006 Reference Y3821 Subject Completion of United States Syndicate Information Statements SIS Subject areas US taxation Attachments SIS Software Instructions Action points Agents to check pre populated XIS data within the SIS software Agents to submit completed Syndicate Information Statements to Members Services Unit utilising Core Market Returns 5 Deadlines 31 May Software available for review of XIS data See 4 below Midday on 9 June report any XIS data discrepancies 12 June Software available for completion 28 June Submission of returns The purpose of this Bulletin is to provide instructions to managing agents for the preparation of the new US Syndicate Information Statement SIS incorporating the terms of the new United States Closing Agreement and using new software Additionally managing agents are requested to check pre populated data see 4 below and report any discrepancies to the Members Services Unit MSU 1 Background Lloyd s members US tax arrangements are contained within a Closing Agreement between Lloyd s Lloyd s members and the US tax authorities The new agreement was signed on 1 July 2005 and is effective for all taxable periods from 1 January 2005 onwards Under the old Closing Agreement all US situs business was subject to tax Under the new Closing Agreement the business on which a member is subject to t
24. Premiums A18 F18 US Premiums A18 F18 Premiums A18 F18 US Premiums A18 F18 Allocation of 100 allowable US Expenses 3alApportion Other E3 above Apportion Other Ed above Apportion Other E3 above Apportion Other E3 above Row Total Repportionmnt of line above must sum across regions in proportion across regions in proportior across regions in proportion across regions in proportion A3a B3a C3a D3a to 100 in worldwide No remainder to A3 above to B3 above to C3 above to D3 above permite P Sample Calculation Rule 1 All Currencies Premium 4 Derive from Premiums Derive from Premiums Derive from Premiums Derive from Premiums Derive from Premiums Row Total Details for Region Details for Region Details for Region Details for Region Details for Region A44 B44 CA4DASEA Allocation of total written premium A11 F11 Allocation of total written premium A11 F11 Allocation of total written premium A11 F11 Allocation of total written premium A11 F11 Allocation of total written premium A11 F11 Apportioned General Expenses Calculate using Others RAS BS CB DSES Withholding Tax S Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Subscriptions 6 Calculate using Rule 1 Calculate usi
25. Recoveries Cumulative Reinsurance recoveries need to be allocated between K BA Other US and Other Amounts should be allocated between these categories in accordance with the rules below a Facultative reinsurance premiums The coding of the original insurance should be followed b Recoveries on reinsurance protecting US business only Recoveries on reinsurance policies which protect only US business usually have an O FIL code The safe harbour methods negotiated with the IRS are the gross and net premium method and these are unchanged from the safe harbours under the previous Closing Agreement You should note that this does not necessarily mean that other methods are prohibited but syndicates using other methods must be prepared to demonstrate the reasonableness of the methodology used Gross claims method Allocate reinsurance recoveries under reinsurance policies protecting US business only to I K BA and Other US Situs and Other based on the percentage of gross US dollar claims allocated to K BA Other US and Other to total gross US dollar claims Gross claims are defined as claims less salvage including settlement costs e t c Net claims method Allocate reinsurance recoveries under reinsurance policies protecting US business only to I K BA Other US Situs and Other based on the percentage of net US dollar claims allocated to K BA Other US and Other to total net US claims Net claims are defined as claims less
26. Specific Illinois only If data collected in USD on form A Pre Post Trans Exp Data then no currency conversion reqd Use Data provided If data collected is in GBP or CAN on form A Pre Post Trans Exp Data then Retrieve Expense data in GBP Col A on form A Pre Post Trans Exp Data converted to US at specified Exc Rate Al above expenses data in CAN Col C on form A Pre Post Trans Exp Data converted to US at specified exc rate A2 above Rule 5 Region Specific Kentucky only If data collected in USD on form A Pre Post Trans Exp Data then no currency conversion reqd Use Data provided If data collected is in GBP or CAN on from A Pre Post Trans Exp Data then Retrieve Expense data in GBP Col A on form A Pre Post Trans Exp Data converted to US at specified Exc Rate A1 above expenses data in CAN Col C on form A Pre Post Trans Exp Data converted to US at specified exc rate A2 above Sample Calculation Rule4 Data collected in USD on form A Pre Post Trans Exp Data no conversion reqd Apportion across regions using Allocation of 100 allowable US Expenses in line 3a above for relevant region as calculated in background workings for apportionment CONTACT DETAILS APPENDIX 5 Agent Name Agent Number Syndicate Number Preparers Address Second contact address if different from above
27. ars of account to which the liabilities relate to enable the RITC ceded to be allocated in accordance with this method As for the 2004 Transitional SIS you may not have sufficient data in relation to back years to be able to allocate the reserves relating to old years in line with premiums in those years Therefore for reserves which relate to years of account up to and including 2004 you should use the same methodology for allocating the RITC ceded as you used in your 2004 Transitional SIS see Section 2 of the Market Bulletin The methodology used must be reasonable and you must be prepared to defend it if challenged by the IRS Whichever method is selected it should be used consistently from year to year taking into account the difficulties relating to the transition year The permission of the IRS is required to change the methodology used Therefore if you wish to change the method of allocating the RITC ceded you should contact Taxation Department 2 5 6 Prior Year Cumulative UPR Deduction 8096 You will need to input any figures shown on the 2004 Transitional SIS A UPR adjustment will only be shown on the 2004 Transitional SIS for the 2004 year of account and therefore the only 2005 SIS which will show a prior year UPR will be the 24 month SIS 2 5 7 Total UPR Cumulative You should input the UPR figure from the AR223 line 16 unless this figure is after deduction of deferred acquisition costs DAC If that is the case the figu
28. assured via US broker for risk located outside USF4 RI Situs USA Treaty RI US Reassured not subjected to FET no US broker for USN2 RI Situs risk located in USA Fac RI US Reassured not subjected to FET no US broker for USN3 RI Situs risk located in USA XL RI US Reassured not subjected to FET no US broker for USN4 RI Situs risk located in USA Treaty RI US Reassured subjected to FET no US broker for risk UST2 RI Situs located in USA Fac RI US Reassured subjected to FET no US broker for risk UST3 RI Situs located in USA XL RI US Reassured subjected to FET no US broker for risk UST4 RI Situs located in USA Treaty RI US Reassured not subjected to FET no US broker for USH2 RI Situs risk located outside USA Fac HI US Reassured not subjected to FET no US broker for USH3 RI Situs risk located outside USA XL RI US Reassured not subjected to FET no US broker for USH4 RI Situs risk located outside USA Treaty RI US Reassured subjected to FET no US broker for risk USJ2 RI Situs located outside USA Fac RI US Reassured subjected to FET no US broker for risk USJ3 RI Situs located outside USA XL RI G BIC Staff plc USTax A ppendix 3b doc US Reassured subjected to FET no US broker for risk USJ4 RI Situs located outside USA Treaty RI 5 0 USD non situs Any Premiums AP RP TTY Stmts settled
29. ax is dependent upon their entitlement to benefits under a tax treaty with the US A member who is entitled to the benefits of a treaty with the US will be subject to US Federal Income Tax FIT on 70 of mb doc Page 1 of 5 Lloyd s is authorised under the Financial Services and Markets Act 2000 MARKET BULLETIN the profits from Illinois I and Kentucky K licensed business and 35 of the profits from Other US Binding Authority business BA A member who is not entitled to the benefits of a treaty with the US will be subject to US FIT on all US situs business which is largely similar to the previous basis for calculating US FIT The fact that there may be members participating on syndicates who are not entitled to the benefits of a US treaty or that a member s treaty status may change means that it is necessary to separate Other US Situs business Other US Situs i e US Situs business other than I K and BA from Other business Other on the SIS The new Closing Agreement still allows Lloyd s to prepare and file a Lloyd s Consolidated US tax return and as previously all Lloyd s syndicates will be required to provide a SIS which forms the basis of the US tax return As a result compliance with the deadlines and instructions within this market bulletin is mandatory The new Closing Agreement and other changes at Lloyd s e g the move to annual accounting have led to a significant number of changes in
30. changing Ins sure Services in the Dev484 data output to the Lloyd s MSU and data provided via the Underwriting Signing Message USM USMs are produced on a daily basis as part of the overnight processing of premiums and paid claims Two versions of the USM are currently in use by syndicates Version 8 2 and Version 9 2 There is a difference in the reconciliation dependent on the version of the USM taken detail in table below In both cases Managing Agents can opt in or out of receiving delinked premium discrepancies will occur if delinked information is not present As part of the same overnight processing transactional information for premiums and paid claims is loaded to the Xchanging Data Warehouse The Dev484 extract has been built based on this data following the extract criteria specified by Lloyd s Taxation and MSU departments The Xchanging delivery to Lloyd s for Dev 484 has taken the form of 2 files per processing period These are 1 Summary Information for a single processing year for premium data 2 Summary Information for a single processing year for claim data These have been provided to MSU who have loaded it into the Lloyd s SIS software Syndicates are asked to validate the data output from SIS against their own records Further transactional listings can be provided to assist this process e Atransactional listing of the signings which make up the premium summary e Atransactional listing of the signings which
31. crease in reserves However the annual return of Syndicate 2 for 2006 will show the RITC premium assumed mb doc Page 4 of 5 MARKET BULLETIN from Syndicate 1 and the corresponding increase in reserves As Syndicate 1 closed at the end of 2005 no annual return is submitted for 2006 For US tax purposes the RITC must be reflected in the year as at the end of which it took effect In the example given the RITC will need to be reflected in the tax return for 2005 Therefore the closing reserves of Syndicate 1 will need to be reduced by the RITC amount and the closing reserves of Syndicate 2 must be increased by an equal amount The premiums of Syndicate 2 will also need to be increased to include the RITC premium received In the year after an RITC has been assumed from an unrelated syndicate an adjustment needs to be made to the written premiums as per that year s SIS Further instructions relating to these adjustments are given in appendix 1 7 Point of contact for queries on the SIS As in previous years the SIS software asks for a contact to whom questions on the SIS can be directed lt is important to note that the questions raised may require answers from people who are familiar with the business of the syndicate which is likely to be members of senior management For this reason we are requesting that two contacts are given for queries relating to the SIS The first contact will be the preparer of the SIS and the second contact a
32. d to derive these value as positive but negatives are values as per the Post Transition Other Workings form allowed RITC assumed from UnRelated Syndicates 2 Input Input Input Input Input A2 B2 C2 D2 E2 Warning Message Agents should Key value as positive but negatives are allowed RITC assumed from Related Syndicates 3 Input Input Input Input Input A3 B3 C3 D3 E3 Warning Message Agents should Key value as positive but negatives are For the Transition Year Agents will be required to Key allowed _ these values into the returns due to the diffiulties in Total RITC Assumed A1 A2 A3 B1 B2 B3 C1 C2 C3 D1 D2 D3 E1 E2 E3 F1 F2 F3 establishing bfwd values for open Yrs of Account After Calendar Year RITC ceded Input Input Input Input Input A5 B5 C5 D5 E5 Warning Message Agents should Key eese A T value as neg tive but positives are llow d Prior Year Cumulative UPR deduction 8096 6 Input Input Input Input Input A6 B6 C6 D6 E6 Warning Message Agents should Key value as positive but negatives are allowed Total UPR Cumulative 7 Input Input Input Input Input A7 B7 C7 D7 E7 Validation Rule Regions to sum to Wordwide If negative value keyed warn user that positives are expected UPR Deduction 80 8 0 8 A7 0 8 B7 0 8 C7 0 8 D7 0 8 E7 0 8 F7 Closing Reserve 9 nput Input Input Input Input Line 20 line17 line 16 of Validation Rule Regions to sum to current year AR223 Wordwide If positive value
33. duce the number of queries raised with you during the course of the year Subsequent changes to the SIS caused by errors in the preparation may lead to additional costs being incurred which may be charged on to the managing agent on a user pays basis Throughout this document the SISs are referred to as the 12 24 36 month or run off SISs For the 2005 tax return the 12 month SIS will relate to the 2005 year of account the 24 month SIS will relate to the 2004 year of account and the 36 month SIS will relate to the 2003 year of account Run off SISs will be required for all years of account that were in run off during 2005 1 1 Pre population The backing schedules to the SIS have been pre populated with data from the Syndicates annual return pages AR100 and AR223 where appropriate and also with data from XIS Managing Agents are required to check this data with their own internal records to ensure its accuracy before completing the SIS Detailed reports can be commissioned from XIS at your expense Should you require these please e mail data information xchanging com Only fields that are white need completion all remaining fields are either pre populated or automatically calculated and cannot be amended There is provision to override the pre population should you have a better basis of allocation However in some circumstances outlined below permission should first be sought from MSU prior to utilising these fields Where it is indicated tha
34. e 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others RilA16 B15 C15 D15 E15 Exchange gains amp losses 16 Rule 2 no apportion sum E16 GBP USD CAN Lloyds Reg Levy 17 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others R A174B17 C17 D17 E17 Legal Professional amp Audit 18 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others RjA18 B18 C18 D18 E18 LPSO Fees 19 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others RjAT9 B19 C19 D19 E19 Management fees 20 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others Ri A20 B20 C20 D20 E20 Marketing 21 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others RiA21 B21 C21 D21 E21 Overrider expenses 22 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others RiA22 B22 C22 D22 Bad debt write off 23 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others RA23 B234 23 E23 Claims handling 24 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate
35. eds to be checked and completed This includes syndicates which did not write US business Syndicates that have not written any US business and have not received an RITC premium from a syndicate which did write US business only need to confirm that the pre populated data is correct and submit the SIS without the need for any adjustments However if any pre populated data appears in any column other than the worldwide column one of two things needs to be done Either you are mistaken and the syndicate did write US business in the period in which case the SIS needs to be completed in accordance with the instructions at appendix 1 or alternatively the pre population is inaccurate If the latter is the case please contact Clare Desmond on 2180 or e mail lloyds tax ops lloyds com immediately Syndicates which do not write US business but received an RITC premium from a syndicate which did write US business will need to complete the SIS in accordance with the instructions given at appendix 1 6 RITC reflected in the SIS An RITC ceded or assumed is reflected in the annual return one year later than the year in which it must be reflected for US tax purposes For example if Syndicate 1 closes at 31 December 2005 the RITC ceded will not be shown on its annual return instead it will show in its closing reserves If Syndicate 2 is the assuming syndicate its annual return for 2005 will not show either an RITC premium received or the corresponding in
36. egions must 10 sum to Worlwide Run off Reinsurance recoveries Calendar Yr Movement 11 Pre loaded AR100 AR100 Line 16 Manual Adjustment of AR100 RI Recoveries 12 Input ia Adjusted Calendar Yr Movement of RI Recoveries 13 Input Input Input Input Input A13 B13 C13 D13 E13 Validation Rule eee sum to Worlwide If Field non zero warn usel require details of why Adjus been necessary NOTE THAT EXPENSE DATA CAPTURE IS THE SAME FOR ALL 3 NATURAL YEARS OF ACCOUNT Period Reporting tax Year As at previous 31 12 Cal Yr End for Yr of Account Reporting Year of Account Exchange Rates to be IRS average Rate for 31 12 last GBP to USS ROE CAN to USD ROE SIS RETURN SYNDICATE EXPENSES DATA CAPTURE 1 83 2 39 US Can Total for Expense Type Converted to A B Cc D General Expenses Line No Withholding Tax 1 Input Import Input Import Input Import A1 GBPUS ROE B1 C1 CANUS ROE Subscriptions 2 Input Import Input Import Input Import A2 GBPUS ROE B2 C2 CANUS ROE Salaries amp Related Costs 3 Input Import Input Import Input Import A3 GBPUS ROE B3 C3 CANUS ROE Premium Levy 4 Input Import Input Import Input Import A4 GBPUS ROE B4 C4 CANUS ROE
37. ents Fee Advance 47 Input Import Input Import Input Import A47 GBPUS ROE B47 C47 CANUS ROE Schedule 9a Charges 48 Input Import Input Import Input Import A48 GBPUS ROE B48 C48 CANUS ROE Member Expenses Total 49 Column A Total for Column B Total for Column C Total for Column D Total for Member Expenses Member Expenses Member Expenses Member Expenses Appendix 4 If Field is non zero warn user that use of field requires pre approval from MSU If Field is non zero warn user that use of field requires pre approval from MSU If Field is non zero warn user that use of field requires pre approval from MSU If Field is non zero warn user that use of field requires pre approval from MSU Exchange Rates to be IRS Average Published Rate for EXPENSES DATA FOR DISPLAY UPON SELCTION OF APPORTIONMENT CALCULATION 31 12 last Line No A B A D E F Appendix 4 GBP to US ROE 1 1 83 CAN to USD ROE 2 2 39 Tliinois Kentucky Other Binding Authority Other US Situs Other Worldwide A B ic D E F US Premium 3 Derive from Premiums Derive from Premiums Derivefrom Premiums Derive from Premiums Derive from Premiums Row Total Use for any Expense in US Column B Details for Region Total USS Details for Region Total Details for Region Total Details for Region Total USJ Details for Region Total A2 B2 C2 D2 E2 lon Expense Data collection form Premiums A18 F18 US
38. ercentages However as these prior year expenses were allocated differently under the old closing agreement it is not possible to reallocate old expenses in the transition year As a result this year lines 32 to 34 are blanked out Line 35 Total for SIS summary will flow through to the SIS line 17 3 Run Off Years of Account 3 1 Run Off Data Collection Schedule 75 The calendar year only movement is shown on the schedule The 36 month percentages are then used to allocate these calendar year amounts to I K BA Other US Situs and Other 3 1 1 Run Off Premiums Line 1 Worldwide Column will be pre populated from the AR100 lines 3 10 28 29 and 30 3 1 2 Allocation by EC percent The software will automatically allocate the worldwide Premiums on line1 using the 36 month Effectively Connected Percentages shown on Apportionments Schedule 80 3 1 8 Manual Adjustment It is possible to manually override the allocation using line 3 however this should only be done if you have more accurate data regarding the correct allocation of premiums 3 1 4 Total The total at line 4 is calculated as the sum of Allocation by EC percent and the Manual Adjustment and flows straight through to line 1 of the SIS 3 1 5 Run Off Claims The K BA and Other US Situs columns on this Schedule will be pre populated from figures from XIS The Worldwide column should equal lines 11 and 12 of the AR100 and is pre populated The other column i
39. escribed at 2 5 and the same instructions need to be followed 3 3 SIS Schedule 90 The only figure that needs to be input onto this schedule is the opening discounted reserve at line 11 and this can be obtained from the 2004 Transitional SIS for the relevant year of account 3 4 Apportionment Schedule 80 The apportionment schedule is exactly the same as that described at 2 8 and the same instructions need to be followed However as mentioned above the percentages used to allocate the expenses are built up using cumulative premiums When the Syndicate year of account reaches the 36 month position the percentages are frozen at that point and used for allocating any future expenses incurred whilst the year of account is in run off For the transition year only you will need to input these percentages at lines 1 and 3 from line 2 of the relevant 2004 Transitional SIS REVISED XIS DATA FOR ENTRY INTO THE SYNDICATE INFORMATION STATEMENT SOFTWARE Syndicate Number Year of Account Premium figures all currencies Dollar premiums only Replacement claims figures Please complete the box outline and return to Lloyd Tax ops lloyds com Illinois Kentucky US Binder US situs Other Worldwide I9 Sum D9 G AR100 APPENDIX 2 Appendix 3a Z ing Xchang RECONCILIATION GUIDE BETWEEN DEV484 OUTPUT AND USM DATA Introduction This document provides a guide for reconciliation between the data provided by X
40. etrieve Expense data in GBP Col A on form A Pre Post Trans Exp Data converted to US at specified Exc Rate A1 above expenses data in CANS Col C on form A Pre Post Trans Exp Data converted to US at specified exc rate A2 above above rate A2 above premiums in Line 4 above Sample Calculation Populating the Other column using the Others Rule Retreive Wordwide Total for line item and deduct the sum of the apportied Regional Values A5 85 C5 DS from the Worldwide Total Sample Calculation Rule 2 No Apportionment reqd If data collected in USD no conversion read use data provided If data collected is in GBP or CAN then Retrieve Expenses data in GBP Col A on form A Pre Post Trans Exp Data converted to US at specified Exc Rate A1 above expenses data in CANS Col C on form A Pre Post Trans Exp Data converted to USS at specified exc rate A2 above Sample Calculation Rule 3 If data collected in USD no conversion reqd apportion across regions using US Premiums ratio in A3 to E3 above Es Rule 3a If data collected is in GBP or CAN then sum of Retrieve Expenses data in GBP Col A on form A Pre Post Trans Exp Data converted to US at specified Exc Rate A1 above expenses data in CANS Col C on form A Pre Post Trans Exp Data converted to USS at specified exc rate A2 above Sample Calculation Rule 3 If data collected in
41. f the original insurance should be followed b Premiums on reinsurance protecting US business only Premiums on reinsurance policies which protect only US business usually have an O FIL code The safe harbour methods negotiated with the IRS are the gross and net premium method and these are unchanged from the safe harbours under the previous Closing Agreement You should note that this does not necessarily mean that other methods are prohibited but syndicates using other methods must be prepared to demonstrate the reasonableness of the methodology used Gross premium method Allocate reinsurance premiums ceded which protect US business only to I K BA Other US and Other based on the percentage of gross US dollar premiums allocated to I K BA Other US Situs and Other to total gross US dollar premiums Gross premiums are defined as premiums before deducting any facultative reinsurance premiums ceded Net Premium method Allocate reinsurance premiums ceded which protect US business only to I K BA Other US and Other based on the percentage of net US dollar premiums allocated to K BA Other US Situs and Other to total net US premiums Net premiums are defined as premiums after deducting any facultative reinsurance premiums ceded c Reinsurance policies which reinsure both US dollar and other business Reinsurance premiums covering US dollar and other business including whole account reinsurances should be split using the same
42. igned Premium The total premiums shown on line 2a of the 2004 Transitional SIS for the relevant years should be manually input into line 1 of this schedule Please note that the column headings on the market returns software are in a different order from the 2004 Transitional SIS 2 1 2 Signed Premium Line 2 of the schedule will be pre populated with data received from XIS 2 1 8 Total Signed Premium Line 3 is automatically calculated as the sum of lines 1 and 2 2 1 4 Written Premium 2005 This figure will be pre populated from lines 3 10 28 29 and 30 of the AR100 2 1 5 Less RITC assumed from Unrelated Syndicates Under annual accounting an RITC assumed by a syndicate will not be recognised in the annual return until the year following the date at which the RITC is ceded by the closing syndicate see Section 7 of the Market Bulletin For instance if a syndicate assumed an RITC from an unrelated syndicate as at 31 December 2004 the RITC assumed premium would not be recognised within premiums under annual accounting in the 2004 annual return but will be recognised in the annual premiums written in the 2005 annual return Therefore line 5 Column F requires you to input as a negative entry an RITC assumed from an unrelated syndicate as at 31 December 2004 Do NOT enter any RITC assumed from an unrelated syndicate as at 31 December 2005 on this line or an RITC assumed from a related syndicate or from another year of account of the
43. keyed warn user that negatives are expected RITC assumed RITC ceded 10 A4 A5 B4 B5 C4 C5 D4 D5 E4 E5 F4 F5 Manual Adjustment 11 Input Input Input Input Input A11 B11 C11 D11 E11 worldwide warn user that MSU require details of why Adjustment has been necessary Total Closing reserve including RITC adj 12 A9 A10 A11 B9 B10 B11 C9 C10 C11 D9 D10 D11 E9 E10 E11 F9 F10 F11 Data Fields to appear on New SIS Data Collection Form SIS DATA COLLECTION RUN OFFS FOR TRANSITION YR Reporting Yr of Account Appendix 4 Drop Down List of expected YOAs Return Period FROM CONTROL FORM A B c D E F Illinois Kentucky Other Binding Authority Other US situs Other Worldwide Reconciliation Line No Run Off Premiums Calendar Yr Movement 1 Pre Loaded AR Data Derived from AR100 Lines3 10 28 29 30 Allocation by EC 2 Retrieve EC from Retrieve EC from Retrieve EC from Retrieve EC from Retrieve EC from A2 B2 C2 D2 E2 Premiums at 36m as used Premiums at 36m as used Premiums at 36m as used Premiums at 36m as used Premiums at 36m as used If Row3 non zero other than for Run Off Apportionment for Run Off Apportionment for Run Off Apportionment for Run Off Apportionment for Run Off Apportionment wo
44. lcs F7 5 Reinsurance Recoveries Form Run Off Cales A13 Form Run Off Calcs BI3 Form Run Off Cales C13 Form Run Off Cales D13 Form Run Off Calcs E13 Form Run Off Cales F13 6 Reinsurance to Close Ceded Form Other Workings A5 Form Other Workings B5 Form Other Workings C5 Form Other Workings D5 Form Other Workings E5 Form Other Workings E5 7 Opening UPR Deduction 80 Other Workings Other Workings F6 8 Closing UPR Deduction 100 Form Other Workings A7 Form Other Workings B7 Form Other Workings C7 Form Other Workings D7 Form Other Workings E7 Form Other Workings F7 9 Closing UPR Deduction 80 of Line 8 Form Other Workings A8 Form Other Workings B8 Form Other Workings C8 Form Other Workings D8 Form Other Workings E8 Form Other Workings F8 10 Net UPR Deduction Line 7 Line 9 AT A9 B7 B9 C7 C9 D7 D9 E7 E9 F7 F9 1i Opening Discounted Reserves 12 Closing Undiscounted Reserve Form Other Workings A12 Form Other Workings B12 13 DiscountQ J of Line 12 12 Dis Rate 14 Closing Discounted Reserve Line 12 Line 13 18 Net Reserve Deduction Line 11 Line 14 ATI A14 BII B14 CII CI4 DII D14 EILEI4 FII FI4 16 Expenses Form expenses apport RUNOFF A38 Form expenses apport RUNOFF B38 Form expenses apport RUNOFF C38 Form expenses apport RUNOFF D38 Form expenses apport RUNOFF E38 Form expenses apport RUNOFF F38 17 Taxable Result before Application of Appropriate USCI Factors
45. life no US broker USD1 LATF Reinsurance Kentucky Fac RI KYA2 RI Situs Kentucky XS RI KYA3 RI Situs Kentucky Treaty RI KYA4 RI Situs Illinois Fac RI incepting after 1 1 92 via Illinois broker LLA2 RI Situs G BIC Staff plc USTax A ppendix 3b doc Illinois Fac RI incepting after 1 1 92 not via Illinois LLB2 RI Situs broker Illinois XL RI incepting after 1 1 92 via Illinois broker LLA3 RI Situs Illinois XL RI incepting after 1 1 92 not via Illinois broker LLB3 RI Situs Illinois Treaty RI incepting after 1 1 92 via Illinois broker LLA4 RI Situs Illinois Treaty RI incepting after 1 1 92 not via Illinois LLB4 RI Situs broker US reassured temp life via US broker Fac RI USC2 LATF US reassured temp life via US broker XL RI USC3 LATF US reassured temp life via US broker Treaty RI USC4_ LATF US reassured temp life no US broker Fac HI USD2 LATF US reassured temp life no US broker XL RI USDS LATF US reassured temp life no US broker Treaty RI USDA LATF US Reassured via US broker for risk located in USA USE2 RI Situs Fac RI US Reassured via US broker for risk located in USA USE3 RI Situs XL RI US Reassured via US broker for risk located in USA USE4 RI Situs Treaty Rl US Reassured via US broker for risk located outside USF2 RI Situs USA Fac HI US Reassured via US broker for risk located outside USF3 RI Situs USA XL RI US Re
46. llinois 2 0 Kentucky Description USD USD TF FIL Kentucky licensed insurance via a Kentucky Broker KYA1 Kentucky Wet marine business subject to premium tax routed via a Kentucky Broker Kentucky licensed insurance direct assured Wet marine KYB1 Kentucky business subject to premium tax routed via a non Kentucky Broker or direct assured 3 0 US coverholder binding authority busienss Any AP RP declared off of an Original SNAD where that Original SNAD has both a slip type B and a country of origin of US All settlement currencies All FIL codes Excluding any transaction that has already been picked up under 1 or 2 above 4 0 US Situs Any Premiums AP RP TTY Stmts fitting one of the following FIL codes Excluding any transaction that has already been picked up under 1 2 or 3 above Excluding any transaction where the FIL ends in 2 3 or 4 and where the country of orign is recorded as Guam American Samoa Nortehrn Mariana Islands US Minor Outlying Islands or US Virgin Islands Description USD USD TF FIL Direct Illinois Surplus line ILC1 Surplus line US Surplus line taxable USL1 Surplus Line US assured no US broker for risk located in USA USA1 Non Regulated US assured via US broker and for risk located in USA USE1 Non Surplus Line eg MAT exempt or industrial Nom Regulaicd assured US assured temp life via US broker USC1 LATF US assured temp
47. loyds com mb doc Page 2 of 5 MARKET BULLETIN Accuracy of the SIS It is important that the SIS returned to Lloyd s is accurate The managing agent is responsible for the SIS and therefore the Finance Director or equivalent of the managing agent is required to sign off as to the accuracy of the return In performing this review it is helpful to review the actual result with reference to the business of the syndicate and the known performance of different lines of business If you believe that the result is unreasonable in the context of the syndicate s performance in the relevant period you should discuss with Juliet Phillips or Christine Allcott at Lloyd s as soon as possible Where late changes are made to SISs by the managing agent additional costs may be incurred centrally in collating the changes resubmitting the data to LLGM recalculating the tax and checking the tax return Lloyd s may pass any such additional costs on to the managing agent on a user pays basis 3 Using the Syndicate Annual return as a basis for the underwriting result The Syndicate Accounts are being prepared on an annually accounted basis for the first time for the year ended 31 December 2005 These accounts will not include a breakdown of the annually accounted result by year of account as required for US tax purposes and therefore it will no longer be possible to get the SIS worldwide figures from the Syndicate Accounts The Syndicate s annual retur
48. m E35 GBP USD CAN Lloyds Use Only 3 3e Calculate using Rule 3 Cal amp ulate using Rule 3 Calculate ne Rule3 Calculate using Rule 3 Calculate using Rule 3 A36 B36 C36 D36 E36 3a Lloyds Use Only 4 37 Calculate using Rule 4 Calc late using Rule 4 Calculate usingRule4 Calculate using Rule 4 A374 B31 C37 D37 N Total for SIS Summary 38 Column A Total for Columb B Total for Column C Total for Column D Total for Column E Total for Column F Total Apportioned General Apportigned General Apportioned General Apportioned General Apportioned General Apportioned Gener Expenses Expensas Expenses Expenses Expenses Expenses 22 Feb 06 new lines 34 35 36 and 37 inserted Sample Calculation Sample Calculation Rule 5 Region Specific Kentucky only Rule 5 Region Specific Illinois only If data collected in USD on form A Pre Post Trans Exp Data then no currency conversion redd Use Data provided Es If data collected is in GBP or CAN on form A Pre Post Trans Exp Data then Retrieve Expense data in GBP Col A on form A Pre Post Trans Exp Data converted to US at specified Exc Rate A1 above expenses data in CANS Col C on form A Pre Post Trans Exp Data converted to USS at specified exc rate A2 above If data collected in USD on form A Pre Post Trans Exp Data then no currency conversion reqd Use Data provided If data collected is in GBP or CAN on from A Pre Post Trans Exp Data then R
49. m XIS 2 1 17 Manual Adjustment of US Premiums No manual adjustment should be made without prior discussion with Lloyd s 2 1 18 Total Cumulative US Premiums This figure is automatically calculated by the software and is the sum of Total US Premiums Brought forward Total US Premiums and Manual Adjustment of US premiums The figures are used to calculate US EC percentages which flow through to the Syndicate Expenses Apportionments Form 80 and are used to allocate US dollar expenses to K BA Other US Situs and Other 2 2 Claims Schedule 45 2 2 1 Claims Paid Brought Forward Claims handling expenses are included in the claims figures For 2005 these figures will need to be manually input from line 5 Column F E D G and H of the appropriate 2004 Transitional SIS Please note that the order of columns on the 2004 Transitional SIS is different to that shown on the SIS for 2005 2 2 2 Claims Paid 2005 Line 2 Columns A B C and D of this Schedule will be pre populated from figures from XIS Column F should equal lines 14 and 15 of the AR100 and is pre populated Column E is the balancing figure 2 2 3 Override Allocation Figures should only be entered into the Override Allocation line 3 in exceptional circumstances If figures have been entered at this line you will need to provide an explanation to Lloyd s 2 2 4 Cumulative Total Line 4 is automatically calculated and is the total of lines 1 2 and 3
50. make up the claim summary These files can be obtained from Xchanging Ins sure Services Data amp Information please contact the Data amp Information team on Data Information Xchanging com or telephone on 01634 887800 Detailed Instructions for comparison of Data Annual Premium Reporting for 2003 amp 2004 Z For a specific Lloyd s syndicate it should be possible to compare data extracted from the 2 sources There may be some sources of difference as identified below Extraction criteria used within Dev484 Equivalent selection for USM reconciliation e Any transactions with a Processing Date between 01 01 2003 and 31 12 2003 2003 file or 01 01 2004 and 31 12 2004 2004 file e This includes both delinked and non delinked items It includes all correction versions processed during the period including corrections to items with earlier signing dates e Data items advised on USM with processing dates between 01 01 2003 and 31 12 2003 2003 file or 01 01 2004 and 31 12 2004 2004 file e All correction versions should be included e Non delinked and delinked items should be included where possible Note Where a syndicate does not receive delinked data then this is a possible source of discrepancy e Year of account gt 1993 e Year of account gt 1993 Year of Account is advised in the PIA A segment under qualifier Y AC e Lloyd s Category Code 1 2 3 e Non treaty items should be included if the
51. n does however show a breakdown of the annual result by year of account page AR100 and therefore this will be used as the basis for the worldwide figures on the SIS Details of the reserves by year of account are shown on page AR223 of the annual return and this page will be used to complete the worldwide reserves on the SIS Life syndicates will use FSA201 and FSA205 instead of the AR223 and reference is made to this in appendix 1 where applicable Please note that the first release of the SIS software does not contain final annual return data the final data will be available in the 12 June release 4 Pre population of the new software The software has been pre populated utilising data from Xchanging XIS MSU has completed some checks on the data However the system is new and MSU do not have detailed records against which the data can be checked Agents are therefore requested to check the pre populated SIS data on schedule 40 premiums line 2 and schedule 45 claims line 2 It is imperative that any discrepancies are reported to MSU by close of play on 9 June Utilising the schedule attached as appendix 2 please e mail revised figures to lloyds tax ops lloyds com An electronic version of appendix 2 together with appendix 5 will be e mailed to your compliance officer Provided that discrepancies are reported by midday on 9 June then software will be available for completion on Monday 12 June mb doc Page 3 of 5 MARKET BULLET
52. nd you must be prepared to defend it if challenged by the IRS Whichever method is selected it should be used consistently from year to year taking into account the difficulties relating to the transition year The permission of the IRS is required to change the methodology used Therefore if you wish to change the method of allocating the closing reserve you should contact Juliet Phillips in Lloyd s Taxation Department on extension 6839 2 5 10 RITC Assumed RITC Ceded An RITC assumed will be a negative figure and an RITC ceded a positive figure The RITC adjustment made to reserves at line 10 takes into account the fact that the RITC is not reflected in the annual return of the closing syndicate in the year of closure and the RITC assumed is not reflected in the annual return of the assuming syndicate until the year after the date that the ceding syndicate closed This is explained further at Section 7 of the Market Bulletin 2 5 11 Manual Adjustment This line should only be used in exceptional circumstances 2 5 12 Total Closing Reserve including RITC adjustment This figure is calculated automatically and flows through to line 12 of the SIS 2 6 SIS Schedule Schedule 90 For this year only the opening discounted reserve must be input directly onto the SIS schedule at line 11 This figure can be obtained from line 11 of the 2004 Transitional SIS for the relevant year of account The opening discounted reserve would usually need to
53. ng Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others RA6 B6 C6 D6 E6 Salaries amp Related Costs 7 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others RA7 B7 C7 D7 E7 Premium Levy Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others RUA7 B7 C7 D7 E8 Accomodation costs 9 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others Ri A9 B9 C9 D9 E9 Bank charges 1O Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others RiA10 B10 C10 D10 E10 Computer amp data processing 11 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others RiA11 B11 C11 D11 E11 Commun Stationary amp print 12 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others RiA12 B12 C12 D12 Citibank Trustee amp Sec fees 13 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others RjAT3 B13 C13 DT3 E13 Interest payable 14 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others R A144B14 C14 DT44E14 Irrecoverable VAT 15 Calculate using Rul
54. nments Schedule 80 This schedule converts the General Expenses on schedule 30 to US dollars and allocates to 1 K BA Other US Situs and Other using the EC percentages calculated from the Premiums schedule 2 8 1 EC Percentages The percentages are automatically calculated as follows Line 1 US Premium Percentage These figures are used to allocate expenses incurred in US dollars It is each column s ratio of Total Cumulative US Premiums from line 18 of the premiums form to the Worldwide figure Line 2 Allocation of 10096 allowable US Expenses These figures are used to allocate expenses that are wholly allocable to US effectively connected business e g US Federal Income Tax 1 This is each column s ratio of Total Cumulative US Premiums from line 18 of the premiums form to the sum of to I K BA Other US Situs Line 3 All Currencies Premium Percentage These figures are used to allocate Sterling and Canadian expenses It is the ratio of each column s Allocation of total written premium on line 11 of the premiums form to the Worldwide total of line 11 2 8 2 Apportioned General Expenses This section shows the General expenses from Schedule 30 after allocation 2 8 3 Totals As the percentages used to allocate the expenses are calculated on cumulative premiums they will change from one calendar year to another Expenses incurred at 12 and 24 months need to be reallocated using the current set of p
55. ois and Kentucky business For Version 8 2 Illinois business can be identified from the 2 character FIL Market code 1A in the PIA B segment under qualifier FIL For Version 8 2 Kentucky business can be identified from the 2 character FIL Market code 4A in the PIA B segment under qualifier FIL Slip type is not present on the USM and therefore Binder business cannot be separately identified This is a potential source of discrepancy For Version 9 2 US Situs business can be identified using the 4 digit FIL codes as above present in the PIA B segment under qualifier FFL For Version 8 2 some US situs business can be identified using the FIL Market Code 7K 7T 1C 5A 5F 5G 4J 4S 1J 3J 3S 5K 5T 6L 6U 7J in the PIA B segment under qualifier FIL The remaining US situs business can be identified by using the 4 digit FIL code USF3 USF4 USL1 USE1 LLA3 LLA4 USE2 USE3 USE4 USF2 UST3 USN4 USJ3 USJ4 within the Line U Narrative in the FTX B segment which is only present for US and Canadian business USD business can be identified using Settlement Currency USD in the CUX A segment under qualifier SCC These amounts are supplied in Settlement Currency on the Transactional listings and are For non treaty premium use the Syndicate Net Settlement Amount For treaty premium use the Syndicate Section Net Amount equivalent to the Settlement LSR amount shown
56. on Lloyd s Account Enquiry LAE For non treaty items use the Syndicate Net Amount In Settlement Currency in the TRA D segment under qualifier NET For treaty sections within treaty statements use the Syndicate Net Amount in Settlement Currency in segment TRA E under qualifier NET preceding the PIA D segment selected as above This represents the premium related element of the total net settlement amount Convert the net amount in settlement currency for each transaction to USD using the monthly rate of exchange held on the Xchanging Data Warehouse Convert the net amount in settlement currency to USD The use of different rates of exchange will be a source of discrepancy Total the converted amounts for each Reporting Category Total the converted amounts for each Reporting Category The totals are supplied in USD on the DEV 484 report for input to the SIS system Z Annual Premium Reporting for 2005 The reconciliation for 2005 is the same except that Lloyd s Taxation MSU have requested the summary data to be supplied in settlement currency i e there is no conversion to USD Thus the steps above should be followed as far as e For non treaty premium use the Syndicate e For non treaty items use the Syndicate Net Settlement Amount Net Amount In Settlement Currency in the e For treaty premium use the Syndicate TRA D segment under qualifier NET Section Net Amount e For
57. rans Yr Gen Expense Apport D38 Form B Trans Yr Gen Expense Apport E38 Form B Trans Yr Gen Expense Apport F38 amp 17 Taxable Result before Application of Appropriate USCI Factors A 14 A2 A3 A4 A5 A6 A 104A 15 A16 1B 1 B2 B3 B4 B5 B6 B10 B15 B16 C14 C2 C3 C4 C5 C6 C10 C15 C16 1D1 D2 D3 D4 D5 D6 D10 D15 D16 JE1 E2 E3 E4 E5 E6 E10 E15 E16 F1 F2 F3 F4 F5 F6 F10 F15 F16 22 Feb 06 Lines 1 617 remapped Data Fields to appear on New SIS Data Collection Form SIS PREMIUMS DATA COLLECTION Reporting Yr of Account Return Period Drop Down List of expected YOAs From control form _ Derived from 36m AR100 _ Lines3 10 28 29 30 d A B c D E F Notes Va Illinois Kentucky Other Binding Authority Other US situs Other Worldwide Reconciliation V4Data retrieved from previous Cal Yr Return Other 77 Workings premiums data Col F line 2 RITC z 2 ZL Assumed from Unrelated Syndicates Worldwide Line No 2 Value B EWD Signed Premium 1 Input hoot Input _ Input Input A1 B1 C1 D1 E1 of Signed premium 2 PreLoaded XIS PreLoaded XIS PreLoaded XIS PreLoaded XIS PreLoaded XIS A2 B2 C2 D2 E2 l Total signed ji A1 A2 For the Transition Year Agents will be required to Key these values into the retu
58. rate records then an adjustment can be made in the override allocation line 10 If this line is used an explanation for the adjustment will be required 2 1 11 Allocation of Total Written Premium Line 11 is calculated automatically and is the sum of lines 9 and 10 2 1 12 Less Prior Year Written Premium As premiums are allocated on a cumulative basis it is necessary to deduct the premiums included on the prior year s SIS For 2005 these figures need to be manually input The figures shown on the 2004 Transitional SIS at line 2a columns F E D G and H should be input here Please note that the order of columns on the 2004 Transitional SIS is different to that shown on the SIS for 2005 2 1 13 Current Year Written Premium This figure is automatically calculated by the software as the sum of lines 12 and 13 and flows though to line 1 of the SIS Gross Written Premiums Net of Brokerage 2 1 14 EC Percentages These figures are automatically calculated as the percentage of each column s allocation of total written premium on line 11 over the worldwide total of line 11 The percentages flow through to the Syndicate Expenses Apportionments Form 80 and are used to allocate Sterling and Canadian dollar expenses to K BA Other US Situs and Other 2 1 15 Total US Premiums Brought Forward These are shown on line 15 of the transitional SIS 2 1 16 Total US Premiums Line 16 of the Schedule will be pre populated with data received fro
59. re input should be the figure given at line 16 of the AR223 plus the DAC Therefore the methodology that you use when completing your annual return will determine the figure that should be utilised If UPR before adjusting for DAC is 100 and DAC of 20 your net UPR is 80 However the correct figure to input at total UPR cumulative will be 100 Life syndicates need to refer to line 22 and line 56 of FSA201 and line 5 of FSA 205 to obtain the UPR figures You will then need to allocate this figure across K BA Other US and Other There is no specified method which you should do this but the simplest method may be to allocate it in proportion to the total written premium shown on the Premiums Schedule at line 11 If you do not believe that this provides a reasonable result then you may use another method provide that you are prepared to explain the methodology used 2 5 8 UPR Deduction 80 Line 8 is automatically calculated as 80 of Total UPR Cumulative 2 5 9 Closing Reserve Line 9 Column F of the Schedule will be pre populated from AR223 lines 20 17 16 Life Syndicates should input lines 7 less line 5 from FSA205 and lines 25 less line22 less 56 from FSA 201 as their closing reserves figures and these figures will need to be input by on the manual adjustment line This needs to be allocated across I K BA Other US Situs and Other The Closing Agreement contains two safe harbour methods for allocating the Closing Re
60. rldwide warn user that MSU Calcs Line 4 All currencies Calcs Line 4 All currencies Calcs Line 4 All currencies Calcs Line 4 All currencies Calcs Line 4 All currencies require Premium on D Trans Yr Premium on D Trans Yr Premium on D Trans Yr Premium on D Trans Yr Premium on D Trans Yr mcg re een Exp Apport Roff F1 Exp Apport Roff F1 Exp Apport Roff F1 Exp Apport Roff F1 Exp Apport Roff F1 Manual Adjustment of Premiums 3 Input Input Input Input Input A3 B3 C3 D3 E3 Total 4 A2 A3 B2 B3 C24C3 D2 D3 E2 E3 A4 B4 C4 D4 E4 7 f Row 6 non zero other than worldwide warn user that MSU n d require Run off Claims uem details of why Adjustment has been MR a necessary Calendar Yr Movement 5 Pre loaded XIS to be loaded Pre loaded XIS to be loaded Pre loaded XIS to be loaded Pre loaded XIS to be loaded F5 A5 B5 C5 D5 E5 Pre loaded A AR100 Line 11 12 as negative as negative as negative as negative Manual Adjustment of Claims 6 Input Input Input Input Input A6 B6 C6 D6 E6 Total 7 A5 A6 B5 B6 C5 C6 D5 D6 E5 E6 A7 B7 C7 D7 E7 If Field non zero warn user that MSU Run off Reinsurance ceded off Reinsurance ceded require details of why Adjustment has been necessary Calendar Yr Movement 8 Pre loaded AR100 AR106 Line 4 Manual Adjustment of AR100 RI Ceded 9 Input Adjusted Calendar Yr Movement of RI Ceded Input Input Input Input Input F8 F9 Validation Rule R
61. rm Transition Yr Claims form B6 Form Transition Yr Claims form C6 Form ims form D6 Form Transition Yr Claims form E6 Form ims form F6 5 Reinsurance Recoveries Form Transition Yr RI RECOVS A6 Form Transition Yr RI RECOVS B6 Form Trai ion Yr RI RECOVS C6 Form Transition Yr RI RECOVS D6 Form Transition Yr RI RECOVS E6 Form Transition Yr RI RECOVS F6 6 Reinsurance to Close Ceded Form Transition Yr OTHER WORKINGS A5 Form Transition Yr OTHER WORKINGS B5 Form Transition Yr OTHER WORKINGS C5 Form Transition Yr OTHER WORKI Form Transition Yr OTHER WORKINGS E5 Form Transition Yr OTHER WORKINGS F5 z Opening UPR Deduction 80 n Yr OTHER WORKINGS A6 ransition Yr OTHER WORKINGS C6 ion Yr OTHER WORKI ion Yr OTHER WORKINGS E6 8 Closing UPR Deduction 100 ransition Yr OTHER WORKINGS C7 ion Yr OTHER WORKI ion Yr OTHER WORKINGS E7 9 Closing UPR Deduction 80 of Line 8 m Yr OTHER WORKINGS A8 ransition Yr OTHER WORKINGS C8 ion Yr OTHER WORKI ion Yr OTHER WORKINGS E8 10 t UPR Deduction Line 7 Line 9 A7 A9 B7 B9 C7 C9 D7 D9 E7 E9 F7 F9 1 Opening Discounted Reserves 12 Closing Undiscounted Reserve 13 Discount 9c of Line 12 14 Closing Discounted Reserve Line 12 Line 13 15 Net Reserve Deduction Line 11 Line 14 A11 A14 B11 B14 C11 C14 D11 C14 E11 E14 F11 F14 16 Expenses Form B Trans Yr Gen Expense Apport A38 Form B Trans Yr Gen Expense Apport B38 Form B Trans Yr Gen Expense Apport C38 Form B T
62. rns due to the E14E2 F14F2 z E oi su prenom S m diffiulties in establishing bfwd values for open Yrs of Account After transition the forms will be t k ae ihe Resi Tet stats Mee egies Written premium 4 required to derive these values as per the Post Transition Premiums form Pre Loaded AR100 k 7 Less RITC assumed from Unrelated Syndicates 5 Input For the Transition Year Agents will be required to Key these values into the returns due to the diffiulties in establishing bfwd values for open Yrs lof Account After transition the forms will be required to derive these Total Written premium net of RITC 6 FA F5 pates es penthe PossiTrensition Prelu formi Bfwd Written premium net of RITC d Input Cummulative Total Written premium net of RITC 8 F6 F7 Allocation of written premium 9 A3 F3 F9 B3 F3 F9 C3 F3 F9 D3 F3 F9 F9 A9 B0 C9 D9 F8 Override Allocation 10 Input Input Input Input Input A10 B10 C10 D10 E10 Warning message if any column other than worldwide not zero MSU will require reasons as to why adjustment has been necessary Allocation of total written premium 11 A9 A10 B9 B10 C94C10 D9 D10 E9 E10 F9 F10 Warning Should equal AR100 Lines3 10 28 29 30 Less Prior Yr written Premium 12 Input out Input Input Input A12 B12 C12 D12 E12 Current Yr written premium 13 A11 A12 B11 C11 C12 D11 D12 EITE F11 F12 36M EC 14 ATF BT FIT CHF DFN ETI FTI Total US Premiums Bfwd 15 Input A Input w Input Input Input A15 B
63. ross regions in above across regions above across regions in A3a B3a C3a D3a sum to 100 in worldwide No proportion to A3 above proportion to B3 above in proportion to C3 proportion to D3 above remainder permitted above 36 Month All currencies Premium 96 4 Input Input Input Input Input Row Total R A3 B3 C3 D3 E3 For Transition Yr the 36 m premiums values for current run offs will be keyed Row 3 3a and 4 Values will be reused for each subsequent return year until account closes This affects ONLY Retrieve Runoff Expenses Calendar Year movement data for line item in GBP A1 on A Pre Post current runs offs as post transition will have the 36m values available from the return Note that Trans Exp Data converted to US at specified Exc Rate A1 above multiplied by Ratio premiums 96 these values are also used to populate theTransition Yr Run Off Calcs in C4 above line item in Can C1 on A Pre Post Trans Exp Data converted to GBP A2 above then to US at specified exc rate Al above Ratio premiums in C4 above line item in USD Ratio premiums in C3 above uit Sample Calculation Populating the Other column using the Others Rule Retreive Wordwide Total for line item and deduct the sum of the apportied Regional Values A5 B5 C5 D5 from the Worldwide Total Apportioned General Expenses For Run Off Calendar Year Movement Calculate using Rule 1 Calculate using Rule
64. s the balancing figure 3 1 6 Manual Adjustment It is possible to manually override the allocation using line 6 however this should only be done if you have more accurate data regarding the correct allocation of claims 3 1 Total The total at line 7 is calculated as the sum of Run off Claims and the Manual Adjustment and flows straight through to line 4 of the SIS 3 1 8 Run Off Reinsurance Ceded Line 8 Worldwide column will be pre loaded from AR100 line 4 3 1 9 Manual Adjustment A manual adjustment can be made on line 9 however this line should not be used without prior approval from MSU 3 1 10 Adjusted Calendar Yr Movement of RI Ceded The reinsurance ceded needs to be allocated to I K BA Other US Situs and Other following the instructions at 2 3 4 a to c above The figures then flow straight through to line 3 of the SIS 3 1 11 Run Off Reinsurance Recoveries Line 11 Worldwide column will be pre populated from AR100 line 16 3 1 12 Manual Adjustment A manual adjustment can be made on line 12 however this line should not be used without prior approval from MSU see 1 1 3 1 13 Adjusted Calendar Yr Movement of RI Recoveries The reinsurance recoveries need to be allocated to I K BA Other US Situs and Other following the instructions at 2 4 4 a to c above The figures at line 13 flow straight through to line 5 of the SIS 3 2 Other Workings Schedule The other workings schedule is exactly the same as that d
65. senior person within the managing agent who can answer questions relating to the business of the syndicate Whilst the software has provision for contacts these may not be used consistently across the market Therefore please complete appendix 5 electronically and submit as an attachment to the SIS return Date Action 31 May 2006 SIS software available on market returns website for review of XIS data in forms 40 and 45 22 and 26 May 2006 Workshops held at Lloyds See bulletin Y3810 dated 10 May Midday on 9 June 2006 All amendments to the pre filled data to be advised to MSU Utilise form in appendix and e mail to Lloyds Tax Ops lloyds com 12 June 2006 Software available for completion 23 June 2006 Deadline for submission of the SIS Christine Allcott Manager Tax Operations Members Services Unit mb doc Page 5 of 5 Appendix 1 SIS Instructions 1 General The SIS software is significantly different to previous years The main SIS return is supported by various backing schedules The only data that is input directly onto the SIS is the opening discounted reserve and this is for the transition year only Instead the backing schedules must be completed and figures are automatically transferred to the main SIS return The accuracy of the SIS is important and is the responsibility of the managing agent Therefore please read these instructions carefully The accurate completion of the SIS should re
66. serve These are the Outstanding Claims or the Stratified Premium Income Methods You may if you wish use another method if it gives a more reasonable result but you must be prepared to explain the methodology to the IRS if it is challenged a Outstanding Claims You may allocate the closing reserve in proportion to the outstanding claims allocated to K BA Other US Situs and Other As detailed above in 2 5 5 a managing agents will be provided with outstanding claims information as at 31 December 2005 and therefore it will be possible to use this method to allocate reserves for the 2005 SISs b Stratified Premium Income This method uses the gross premium income of the year of account e g accident year to which the current reserve relates to allocate the closing reserve Therefore details of premium income from I K and BA business would be required for all prior years of account to which the reserve relates to enable the reserves to be allocated in accordance with this method As for the 2004 Transitional SIS you may not have sufficient data in relation to back years to be able to allocate the reserves relating to old years in line with premiums in those years Therefore for reserves which relate to years of account up to and including 2004 you should use the same methodology for allocating the closing reserve as you used in your 2004 Transitional SIS see Section 2 of the Market Bulletin The methodology used must be reasonable a
67. t MSU should be contacted please send an e mail to Lloyds MSU Tax Ops lloyds com providing contact details and a brief explanation of the issue 1 2 Effect of new Closing Agreement The new Closing Agreement requires the syndicate s worldwide underwriting result to be allocated to Illinois licensed business I Kentucky licensed business K US Binding Authority business other than and K business BA Other US Situs business and Other business 1 3 Transitional SISs and brought forward figures Due to the change in tax base under the new Closing Agreement Managing Agents were asked to restate certain figures on the 2004 SISs 2004 Transitional SIS These figures will need to be manually input into the SIS software and you must ensure that the figures input agree to the figures provided to us on the 2004 transitional SISs In future years all brought forward figures will be automatically carried forward from the prior years SIS The original 2004 transitional SIS that was submitted to MSU was amended by MSU and returned to you for review during the period 22 31 May 2006 It is the final figures that were returned to MSU following that review that should be utilised If you require a copy of these figures please contact Clare Desmond on Lloyd s extension 2180 1 4 Years of account for which an SIS is required A separate SIS is required for all years of account which were open during 2005 including run off
68. t fees 20 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others Rulg A20 B20 C20 D20 E20 Marketing 21 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others RulgA21 B21 C21 D21 E21 Overrider expenses 22 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others Rulg A22 B22 C22 D22 E22 Use for any Expense in US Column B on Expense Data collection form Bad debt write off 23 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others Rule A23 B23 C23 D23 E23 Claims handling 24 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others Ru Spe eBed Cede Ded E26 Overseas Levy s 25 Calculate using Rule 3 Calculate using Rule 3 Calculate using Rule 3 Calculate using Rule 3 culate using Rule 3 3a Row Total E Calculation If data collected in USD no conversion reqd apportion across regions using US Premiums ratio in A3 to E3 above Se Rule 3a LDTF Custody Fees 26 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Rule 1 Calculate using Others RuldA26 B26 C26 D26 E26 If data collected is in GBP or CAN then sum of Legal amp Prof Fees US bus 27 Calculate using Rule 1 Calculate using Rule 1 Calculate
69. te of exchange for the taxable year as the conversion rate for expenses Expenses will need to be entered into the software in Sterling US and Canadian dollars and will automatically be converted into dollars at the average rate of exchange for the taxable year Any expenses in currencies other than Sterling US and Canadian Dollars should be converted to sterling at average rates as per the annual return 1 6 Run Off Years The instructions for run off years of account are in Section 3 and are different to those for naturally open years of account The reason for this is that at the 36 month point of a year of account the percentages of cumulative I K BA Other US Situs and Other premiums and claims are frozen If the year of account does not close these fixed percentages will be used to allocate all premiums and claims for each run off year It will however be possible to make a manual adjustment to override this calculation if more accurate information is available See section 3 1 3 below 1 7 Changes to the SIS software For the 12 24 and 36 month SISs the backing schedules need to include cumulative data up to the end of 31 December 2005 The software will then automatically deduct the prior years SIS data as adjusted via the 2004 Transitional SISs to give the calendar year movement on the SIS schedule You should note that this is a change from previous years when the figures shown on the SIS were on a cumulative basis When revie
70. the way that the SIS is put together and has also resulted in a substantial re write of the SIS software Therefore managing agents are advised to pay close attention to the instructions given in appendix 1 before completing the SIS software Workshops to explain the preparation of the SIS have been held and further assistance will also be provided if necessary If you have any questions on the preparation of the SIS please contact one of the individuals listed below We will endeavour to ensure that at least one of these individuals is available on a particular day but we can not guarantee that we will be able to respond immediately to questions lan Chidgey tel 01634 392393 Juliet Phillips tel 0207 327 6839 Christine Allcott tel 01634 392433 Maureen McLeod tel 0207 327 6860 Rosaleen Moore tel 0207 327 6856 Helen Harrison tel 0207 327 6859 2 Restatement of 2004 SIS Managing agents have already been asked by MSU Tax Operations to restate their 2004 SISs on the new basis i e splitting the underwriting result of the 2003 and 2004 year of account SIS and the closing reserve of any run off SIS between I K BA Other US Situs and Other The most up to date version of the restated SIS held centrally will be issued by MSU by 31 May 2006 and will be needed in order to complete brought forward data on the 2005 SIS If you are unable to locate this document you should contact Clare Desmond MSU on extension 2180 or e mail on lloyds tax ops l
71. tive 4 Input Input Input Input Input F1 F2 F3 Validation Rule Regions should sum to Worldwide Prior years reinsurance ceded Cummulative Prior Yr 5 Input Input Input Input Input 1 Warning Message Agents should Key value as negative but positives are allowed Rule Regions to sum to Worldwide Total reinsurance ceded in the year 6 A4 A5 B4 B5 C4 C5 D4 D5 E4 E5 A6 B6 C63D64E6 x xX X For the Transition Year Agents will be required to Key these values as Positive into the returns due to the diffiulties in establishing bfwd values for open Yrs of Account After transition the forms will be required to derive these values as per the Post Transition RI Ceded form Data Fields to appear on New SIS Data Collection Form SIS REINSURANCE RECOVERIES DATA COLLECTION Reporting Yr of Account Drop Down List of expected YOAs Appendix 4 For the Transition Year Agents will be required to Key Return Period FROM CONTROL FORM these values into the returns due to the diffiulties in establishing bfwd values for open Yrs of Account After transition the forms will be required to derive these values as per the Post Transition RI Recoveries form A B Cc D E F Line No Illinois Kentucky Other Binding Authority Other US situs Other Worldwide Reinsurance recoveries B Fwd 1 7 7 Input Warning Message
72. um on the SIS of the same calendar year tax return as the ceding syndicate reports the RITC on its SIS 2 5 4 Total RITC Assumed Line 4 is the total of lines 1 2 and 3 2 5 5 Calendar Year RITC Ceded If a syndicate reinsured to close as at 31 December 2005 an RITC ceded needs to be entered on line 5 You must convert the amount into dollars using the Lloyd s Year End Exchange Rate and it must then be allocated across I K BA Other US Situs and Other You should note that the IRS has not formally approved any allocation methodologies other than the Coding of Outstanding Claims and the Stratified Premium Income Methods Should you decide to use another method or to make reasonable estimates in applying one of the approved methodologies you should be prepared to justify to the IRS any methodology estimates actually used a Outstanding Claims You may allocate the RITC ceded in proportion to the outstanding claims allocated to K BA Other US Situs and Other Outstanding claims data will be provided to managing agents as at 31 December 2005 and therefore it should be possible to allocate based on outstanding claims for the purposes of the 2005 SISs b Stratified Premium Income This method uses the gross premium income of the year of account e g accident year to which the RITC ceded relates in order to allocate it between I K and BA Therefore details of premium income from K and BA business would be required for all prior ye
73. uthority E F Other Worldwide A1 B1 C1 D1 E1 Pre Loaded AR100 Input Input Input Input Input A3 B3 C3 D3 E3 A1 A2 A3 B1 B2 B3 C14C24C3 D1 D2 D3 E1 E2 E3 F1 F2 F3 C1 D1 E1 F1 C4 C5 D4 D5 E4 E5 F4 F5 Appendix 4 Reconciliation AR100 Lines 14 and 15 If any row cell non zero other than worldwide warr user that MSU require details of why Adjustment has been necessary Appendix 4 Data Fields to appear on New SIS Data Collection SIS REINSURANCE CEDED Form DATA COLLECTION Reporting Yr of Account Drop Down List of expected YOAs Return Period From control form For the Transition Year Agents will be required to Key these values ias negative into the returns due to the diffiulties in establishing bfwd values for open Yrs of Account After transition the forms will be required to derive these values as per the Post Transition RI Ceded form A B C D E F P Line No Illinois Kentucky Other Binding Authority E Other US situs Other Worldwide Reconciliation sd Reinsurance ceded B Fwd 1 y 7 7 Input Warning Message Agents should Key value as negative but positives are allowed Reinsurance ceded 2 Pre Filled AR100 AR100 Line 4 Manual Adjustment of AR100 RI Ceded value 3 Input If Field is non zero warn user that MSU require details of why Adjustment has been necessary NS NS Total reinsurance ceded Cummula
74. wing the SIS for 2005 you may want to consider whether the cumulative result for the year of account is reasonable and to do this you will need to manually total the 2004 Transitional SIS for the year of account and the SIS for 2005 for the same year of account 1 8 Accessing the software The system is part of the web based Lloyds Core Market Returns and access is via the Market Returns web site http info lloyds msuapps for which Managing Agents already have the credentials if not please contact the MSU Market Returns helpdesk on 020 7327 5021 Once logged into the Market Returns using the tabs at the top of the page navigate to the Business Reporting Tasks page and select the US Syndicate Information Statement task The Core Market returns Secure Login page will be displayed 1 8 1 Logging On A username and password is required to logon to the system These are set up when the user s profile is created by the administrator and can be changed by the user at any time Once logged on the Core Syndicate Return Selection screen will be displayed at this point more detailed help is available by selecting the Help tab at the top of the screen then select User Manual from the options available on the left hand panel To launch the SIS return select SIS from the list of available returns The specification for the forms can be found in the help pages and may assist with understanding the logic operating within the tables
75. y are new premium additional premium or return premium transactions These can be identified by the Lloyd s CA Category code values of 1 2 3 in the PIA A segment under qualifier CAT e Treaty Sections within Treaty Statements should be included where the Lloyd s CA Category code has values 1 2 3 in the PIA D segment under qualifier CAT e Qualifying Category lt gt I e Non treaty Profit Commission items should be excluded These can be identified by Qualifying Category code in the PIA A segment under qualifier QCT e Treaty Profit Commission items should be excluded These can be identified by Qualifying Category code in the PIA D segment under qualifier QCT e Fil Code 1 and 2 lt gt LFC1 LFC2 LFC3 LFC4 LFl1 LFl2 LFI3 LFl4 LFU1 LFU2 LFU3 LFU4 e Loss Fund coded items should be excluded e For USM Version 9 2 the 4 character FIL code is present and the matching criteria can be applied i e items with FIL Code 1 or 2 LFC1 LFC2 LFC3 LFC4 LFM Z LFI2 LFI3 LFI4 LFU1 LFU2 LFUS LFUA in the PIA B segment under qualifier FFL should be excluded For USM Version 8 2 the 4 character FIL code is not present However it is possible to identify Loss Fund items using the 2 digit FIL Market Code in combination with the Narrative present in Line U for US and Canadian business as follows Exclude items where the 2 character FIL Market Code LP

Y3821 Us Taxation

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