Modification by consent of INSPRU 2.1.22R
We are making a modification by consent available to managing agents of Lloyd's syndicates writing general insurance business. This modification relates to the counterparty exposure limits, as set out in INSPRU 2.1.22(3)(c)(i).
Members of Lloyd's who write business in certain overseas jurisdictions through Lloyd's syndicates are required to have funds deposited in those jurisdictions. This is so they meet the regulatory requirements of those jurisdictions.
These funds are deposited in overseas jurisdictions by Additional Securities Limited (ASL), a wholly owned subsidiary of Lloyd's. This is because individual members are not permitted by those jurisdictions to make the deposits themselves. The managing agents of syndicates through which the relevant overseas business is carried on arrange these deposits by loaning syndicate assets to ASL. The exposure to ASL is a counterparty exposure for the purposes of the INSPRU rules.
This modification amends INSPRU 2.1.22R to increase the limit on counterparty exposure to ASL in order to increase the amount a syndicate's managing agent can count towards the syndicate's total capital. This direction is due to expire on 31 December 2009.
We have set out the details in the modification direction [PDF]
If a firm wishes to take advantage of this modification, it should write to the Central Waivers Team, FSA, 25 The North Colonnade, Canary Wharf, London, E14 5HS. The modification is subject to certain conditions, which you should note. We will write to firms to confirm the granting of waivers and we will publish each waiver we grant on our website.