If you have an interest in compliance and work for one of the 60 managing agents operating in the Lloyd's market you will be aware that the end of April 2022 represents a new and significant deadline!
To an outside observer of the Lloyd’s market, the level of current oversight in place would doubtless be seen as robust - befitting the reputation of Lloyd’s being the world’s leading specialist insurance and reinsurance market. Last year however, Lloyd’s introduced a shakeup of the oversight framework. The framework had been built up incrementally over time with there were opportunities to remove duplication, improve efficiency and realign with changes in the market.
The changes involve a move away from looking bottom-up at a set of prescriptive processes to more of a top-down, outcomes-focused approach. A key element of the new framework is the Lloyd’s Principles for Doing Business (“the Principles”). The suite of 13 Principles replace the existing Minimum Standards and allow for more differentiation according to syndicate materiality. The Principles are the basis against which Lloyd’s will view and categorise all syndicates and managing agents in terms of both their capability and performance. Furthermore, the Managing Agent has the opportunity to give a view on its maturity relative to sub principles and this position relative to Lloyd’s expectations.
As the Principles are replacing the current minimum standards, the usual minimum standards attestations will not be required in 2022. Instead, a “best efforts” self-assessment from managing agents against the new Principles will be required by the end of April 2022.
For those agents that are already using the Decision Focus platform to demonstrate compliance with Lloyd’s Minimum Standards, the Decision Focus team have established a template ‘design pattern’ which can be applied to your Decision Focus workspace irrespective of the number of syndicates you have responsibility for. This will extend the set up for Minimum Standards and help you gather the evidence required for the self-assessment by April 2022.
We recommend that Principles and Sub Principles are managed as records within separate forms. This configuration structures the data in a way that will improve usability, leveraging linked data and hierarchy setups to increase visibility which in turn will help track progress through the assessment. This approach allows embedding ownership and easing the reporting requirements.
The screenshot below shows an example of how a Compliance Manager could navigate to the Principle ‘Reserving’ and easily see assessments that have been made for each of the sub principles.
Figure 1 Thirteen Principles together with Sub Principles
https://www.lloyds.com/conducting-business/market-oversight/self-assessment-guidance
Using this mapping, the existing LMS Requirements can be linked to the relevant Principles. This means that the person assigned as being responsible for the Principle will be able to easily navigate to the relevant requirements and get a jump start on gathering the evidence based on any relevant data collated as part of the minimum standards assessment.
Figure 2 LMS Requirements linked to Sub Principles
A key strength of the Decision Focus platform is the ability to assign named individuals to certain items such as risks, controls etc. This feature can be leveraged in the assessment required for April 2022 by ensuring that there are owners for each of the Principles and Sub Principles. Federating ownership out in this way is a proven technique to facilitate data gathering and reduce the amount of e-mail, messaging and phone-based follow up required to gather the right data. This also allows the benefits from integrated assurance, which is at the core of the Decision Focus platform.
Despite this being a “soft launch” of the framework the deadline for the submission is fast approaching. If you are currently using the Decision Focus platform to manage compliance with Minimum Standards or even if you don’t currently use the platform and are struggling with spreadsheets or old technology, get in touch and the team and we get you up-and-running to meet the April deadline!