The external regulator, the FSA, delegates to the Council of Lloyd’s, the internal regulator. The Council must maintain an effective delegation of responsibilities for the purpose of carrying out the Society’s regulatory functions so that the Council can adequately control them. The Society deals cooperatively with the FSA in carrying out those regulatory functions and notifies the FSA when proposing byelaw changes. The byelaws are supplemented by Core Principles for Underwriting Agents and various codes. The FSA will regulate Lloyd’s brokers from 2005. See MARGIN OF SOLVENCY; REQUIRED MARGIN BUSINESS); REQUIRED MARGIN (LONG TERM BUSINESS). (GENERAL

Lloyd’s Act 1871 incorporated Lloyd’s as a ‘Society and Corporation’ without distinguishing between the two. However, FSMA, s. 190, specifically makes the Society an authorised person enabling the FSA to make rules and take disciplinary action against it. The FSA can issue directions to members of the Society or (s.193) direct the Society, through its Council, to impose obligations on its members. The Society is often said to comprise those individuals and entities that are for the time being members of Lloyd’s plus the legal rights and all property that collectively belongs to them.