Prudential Regulation Authority Rulebook

12.1

This Chapter applies to the Society and managing agents.

12.2

For the purpose of;

1. (1) 3.1(2)(b), 3.8(2)(c) and 6.1(1)(i), as applied to managing agents, the reference to “SCR” is to be interpreted as a reference to the notional syndicate SCR calculated by managing agents as required by Solvency Capital Requirement - General Provisions 8.2.
2. (2) 3.7 and 3.8(5), as applied to managing agents, the reference to “internal model” is to be interpreted as a reference to any internal model used by a managing agents to calculate the notional syndicate SCR as required by Solvency Capital Requirement - General Provisions 8.2; and
3. (3) 3.10, as applied to managing agents, the reference to “risk profile” is to be interpreted as a reference to the risk profile of any syndicate managed by the managing agents.

12.3

For the purpose of 3.8 to 3.11, as applied to managing agents, managing agents must conduct an ORSA for each syndicate which they manage.

12.4

Where a provision of this Part requires that a function be established, the Society and managing agents must each separately establish that function.

12.5

The actuarial function of a managing agent must, in respect of each syndicate managed by the managing agent, carrying out general insurance business;

1. (1) review the technical provisions of each syndicate year (other than a closed year); and
2. (2) provide an opinion to the managing agent and the Society confirming that the technical provisions (before addition of the risk margin) for each syndicate year are no less prudent than the best estimate of the amounts required to be held (before addition of the risk margin) in accordance with Technical Provisions 2 to 12.

12.6

The PRA must be informed by the managing agent promptly if the managing agent becomes aware that the actuarial function of the managing agent will or may be unable to produce an unqualified opinion under 12.5(2).

12.7

For the purpose of 9.1, the Society and managing agents must take all reasonable steps to ensure that:

1. (1) a corporate member does not carry on any commercial business other than insurance business and activities arising directly from that business; and
2. (2) individual members do not, in their capacity as underwriting members, carry on any commercial business other than insurance business and activities arising directly from that business.