Members’ annual solvency test procedure

Each Lloyd’s member must have sufficient assets to meet liabilities plus a prescribed margin (see required minimum margin (general business) and required minimum margin (longterm business). If there is a shortfall the member must provide additional assets. The members’ Funds at Lloyd’s usually covers the deficiency. Ultimately Lloyd’s must show the FSA that it has sufficient assets to cover any aggregate shortfall of all members after the prescribed surplus tests.

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