A warm Welcome to the September market Breakfast Group

1. Control Framework A warm Welcome tothe September market Breakfast Group

2. Control Framework Breakfast Group agenda • 9:00 Arrival, breakfast & networking All • 9:20 Welcome Ali Dove • 9:25 Lloyd’s Delegated Authorities Lindsey Davies • Audit scope changes • Audit coordination pilot • Atlas • 9:40 Phase II progress & Responsibilities Jaana Rouvari • of lead vs. follow • 9:55 Broker conference update John Hibbert • 10:05 Integro – A broker’s view into the Dan Lott • Control Framework • 10:20Q & A All • 10:30 Close Ali Dove

3. Control Framework Lindsey DaviesLloyd’s delegated authorities • Audit scope changes • Audit coordination pilot • Atlas

4. Control Framework Progress on Phase 2 • Initial meetings with managing agents • Managing agent has project resources in place • Coverholder risk rating exercise • Risk ratings reflected in audit schedules • Confirm delivery timeline to Lloyd’s

5. Control Framework Lead vs. follow • You said… • The lead should… • Include Control Framework audit questions in the audit scope • Carry out the audit and share findings with follow • Coordinate communications with broker and coverholder • Where you follow… • You have limited power to influence • Rely on the broker to provide you with information (distribution of bordereau, audit reports, etc) • Controls available are limited, confidence in your lead is key

6. Control Framework Lloyd’s listened • The lead managing agent takes the responsibility for the Control Framework • This includes: • Risk rating exercise • Performing a gap analysis • Assessing sufficiency of controls • Remediation • Organising coverholder audits • Communications with the broker or coverholder • What about conflict of interest between the lead and the follow?

7. Control Framework Broker conference17th September 2013 • 53 Broking organisations registered out of 115 individual firms who operate in the binder space. • That represented 87% of the £4.2 billion GWP on a calendar year basis for 2012 • Actual attendees on the day represented 70% of the 2012 GWP and they were joined by LIIBA • 31 out of the top 40 BROKERS by GWP

8. Control Framework What was the feedback from the day • What if two MAs risk rate a C/H differently? Red vs Green • Have the specific CFII audit questions been issued? • Relative to LLOYD’S 2025 vision. How fluid and/or flexible is the framework ? • Very appreciative of the early engagement by LLOYD’S • Will there be a reach out to all brokers?

9. Integro – Dan LottBrokers’ view into the Control Framework

10. Lloyd’s Control Framework The Control Framework is a positive step in the right direction for Brokers and for Coverholders…

11. What is our role? • It is the Managing Agent’s responsibility to comply with the Control Framework but, as Lloyd’s Brokers, we have an important role to play: • Communication • Co-ordination • Pace-making

12. What do we need to do? • Understand the Control Framework - Phase II FAQs; Website • Be prepared: • Are you a Coverholder? Do the right people in your organisation know about the CF?! • As a Lloyd’s Broker, what (if any) processes do you undertake? e.g. validating data / supplementing data / holding data • Expectation management is key! How will you introduce this to your Coverholders? • Audits are likely to be carried out on many Coverholders • Start the dialogue early. Remember – this is nothing new!

13. Who can we talk to? • In the first instance, talk with your Managing Agent(s) • Mark Knight at LIIBA • The Project Team at Lloyd’s • It’s good to talk!

14. Control Framework Q & A

15. Control Framework Close Further information on Control Framework – jaana.rouvari@lloyds.com Control Framework Phase I end of project celebration – Thursday 26th September Next Breakfast Meeting – Tuesday 22nd October 2013 www.lloyds.com/controlframework