Transcript CF Breakfast Group Presentation May 2013

Control Framework
Breakfast Group
agenda
9:00
Arrival, Breakfast & networking
9:20
Welcome and The “gold star awards”
9:25
Delegated authorities update
9:45
Phase II: risk assessment, data flow
and next steps to launch
10:05
Broker engagement
10:15
Q&A
10:30
Close
- Ali Dove
- Sarah Thacker
- Jaana rouvari
- John Hibbert
- All
Control Framework
Lloyd’s market
gold star awards…
ALTERRA
ASCOT
BRIT
MONTPELIER
NEWLINE
SPORTSCOVER
TRAVELERS
MARKEL
LIBERTY
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Should Lloyd’s Mandate the CH reporting
standards?
Sarah Thacker, Lloyd’s Delegated Authorities
21 May 2013
© Lloyd’s
The consultation
► Representatives from DUC, BACG, BOLT,
DUM, Lloyd’s country managers and
Xchanging were consulted
► Stakeholders were told that there had been a
request to mandate the reporting standards in
a response to the proposed roll-out of the
control framework to coverholders
► Stakeholders were asked if they thought the
reporting standards should be mandated on
coverholders because of the control
framework
► They were also asked for general comments
around mandating the reporting standards on
coverholders
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© Lloyd’s
Issues with
mandating, London
► Changes only typically take place annually at
renewal
► Underwriters are largely not aware of the
standards, their usefulness and importance
► Many London stakeholders still do not have
systems to put this data into
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© Lloyd’s
Issues with mandating,
coverholders
► Domestic carriers typically collect this sort of
data as a bi-product of processes, this is
asking for something extra
► Customised versions of off-the-shelf systems
mean charges for implementing standards
► Over time, as coverholders change systems
so these issues are likely to be reduced
► Retail agents at the start of the chain need to
collect the data
► Coverholders want to be asked for the
same thing by all syndicates; but this is
not what was proposed
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The reporting standards and the DATA control framework
1. Information Requirements
The reporting standards ≠ the data
items in the control framework
Control framework is what to capture
and the controls, reporting standards is
what to send into London
The red fields in the standards are not
all in the control framework
The control framework includes Lloyd’s
data which a coverholder would not
know
Examples – risk codes, year of account
The control framework includes data
which London already knows
Examples – Currency if always $; state
if always Florida, Contract Type
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The reporting standards and the DATA control framework
2. Risk model
Will mandating help?
Risk 1 – requirements are not
understood
The reporting standards ≠ control
framework so may confuse
Risk 2 – data capture is inadequate
Would help to explain, but see above
may confuse and would not give the
full picture
Risk 3 – data is processed incorrectly
No
Risk 4 – data is corrupt
No
Risk 5 – data is lost and cannot be
recovered
No
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The reporting standards and the control framework
Control Framework
continued
Summary
Will mandating help?
3. Apply risk model
Each data item to be risk
assessed and prioritised
No
4. Identify and
document key controls
Identify and document the
controls mitigating the risks
Might be an example of a
control…
5. Gather evidence
Gather evidence of controls No
6. Provide assurance
This is about assuring
Lloyd’s that controls are in
place
No
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Lloyd’s should not
mandate the coverholder
reporting standards at
this time
► Limited understanding of standards
amongst London stakeholders, and
insufficient current take-up for this to be
accepted in London
► Costs for coverholders seen as
prohibitive
► Information to be mandated is unclear
– reporting standards ≠ data control
framework
► Will not deliver the requirements of the
Data Control Framework
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© Lloyd’s
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What next?
► The proposal to mandate the reporting
standards on coverholders has been
rejected.
► But
► There are still other activities separate
to the Control Framework project which
can be pursued.
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© Lloyd’s
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Audit Scope review
► Market project with reps from DUC,
DUM, BACG, BOLT and Lloyd’s:Charles Rowley, Steve Hart, Patricia
Beaton, Dan Lott, Ian Whitehead and
Sarah Thacker
► Scope is currently being reviewed
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► Plan for draft in summer and final
version in autumn
► This will be followed by
training/education for auditors
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Audit Scope Review
► How do you determine where the risk is
located for entry onto your system?
Initial recommendation for
questions RE control
Framework
► How would you risk locate for a
policyholder in your country insuring a
property in another country?
► How would you determine the location of
risk for a policy holder outside your country
but insuring property in your country?
► How do you determine what is the tax
liability for the insured or insurer?
► Does this entry drive the bordereaux or is
this entered manually onto a spreadsheet?
► Are you aware and use Crystal/Risk locator
Tool?
► Note, these are draft only……
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Data and technology
► BAU work with market promoting and
educating on data and reporting standards
► Reporting standards are mandatory for new
coverholders
► Brokers to be encouraged to provide all data
to leads and followers via IMR or similar in a
spread-sheet or other useable format
► Conversations with Xchanging around how
they can help
► Working with market stakeholders to promote
use of technology, automation and XML
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Education
► Application process could be amended, for
example, coverholders could be asked to
complete Crystal Assist
► Coverholder Toolkit includes information about
data and reporting which can be enhanced
when next updated
► Information can be put in Delegated
Authorities Area on Lloyd’s web pages
► Promote use of Crystal and Risk Locator Tool
at coverholder events
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© Lloyd’s
Control Framework
phase ii Update
Coverholder risk assessment
Data flow and controls
Next steps to launch
Future meetings
Control Framework
Coverholder risk assessment
Complexity of business written
Binding AuthoritySingle or multiple
territories
Lines of Business
Principal Regional
Complexity
Premium written
Nature of operations
Coverholder
Resources and
information
provided
Use of Lloyd’s
Tools
Historic Issues
Use of Lloyd’s
coverholder
reporting
standards
Control Framework
Dataflow and controls
Coverholder
Premium
A/S
XIS
Premium
Broker
TPA
Claims
Lloyd’s
ECF
XCS
Claims
Claims
Premium
Lloyd’s
Coverholder
reporting
standards
Purpose:
To ensure required
information is provided for
premium and claims
processing purposes
Managing
agent
Lloyd’s
Control
Framework
‘Green Book’
Purpose:
To ensure tax and regulatory
information at source meets
the minimum requirements
and is of good quality
Control Framework
Information
Data is captured/ manipulated/ held
Control Framework
Next steps to launch of phase ii
Lessons learnt
Tool kit &
market group
consultation
Phase II
communications
approach
Delegated
Authorities
engaged
Control Framework
Next steps to launch of phase ii
Finalise Lloyd’s tool kit:








Phase II road map
Coverholder risk assessment guidance notes
Data items spreadsheet adapted for phase II
Broker/ coverholder leaflet
Control Framework Standard presentation for phase II
‘Board’ sign-off wording
Phase II FAQs
Guidance on what good looks like
Look for these @ lloyds.com/controlframework in July
Control Framework
Next step to launch of phase ii
 Your contacts for phase II
 Scheduled meetings for phase II
 Initial 1-2-1 meetings within the first 3 months
 Follow up meetings on request
 Regular status reports from managing agents
 The LAUNCH event
Control Framework
Future meetings
From July..
Project update
Delegated Authorities update
Broker engagement update
Managing agent/ broker/ other
presentation
Control Framework
Update on broker engagement
John Hibbert
Control Framework
Progress so far
LIIBA endorsement of project framework
Individual broker meetings undertaken
•
•
•
•
•
•
•
•
•
Millers
Towers Watson
Willis
Cooper Gay
Crispin Speers
Integro
Decus
THB
Bell and Clements
Control Framework
Next steps
Establish broker working group
• LIIBA and BIBA members
Present to BOLT meeting 2nd July
Communicate to the wider broking
community through Phase II Launch in
July
Individual Managing Agent/broker
meetings