In a market bulletin published on 5 March 2009, Lloyd's announced new arrangements for the reporting, funding and settlement of LATF liabilities (excluding long term business). The bulletin states that these changes will take effect at the end of Q1 2009. The bulletin also sets out what action managing agents need to take in order to comply with the changes.
The changes that Lloyd's has implemented relate to:
- amending the prescribed form of deeds and all existing deeds in respect of the LATFs, Lloyd's Dollar Trust Funds (LDTF), Lloyd's Credit for Reinsurance Trust Funds (CRTF) and Lloyd's Excess and Surplus Lines Trust Funds (SLTF);
- simplifying the regulatory reporting of LATF liabilities and assets and incorporating LATF business into the quarterly US situs regulatory filings;
- permitting a repatriation of all LATF assets (via CRTFs and SLTFs) to syndicates' LDTF over a five year period; and
- changing the current LATF settlement and solvency processes, which will impact daily settlement and year-end solvency reporting.
These changes will allow Lloyd's to address two major concerns which were raised agents that manage LATF namely decreasing average account sizes and disproportionate US regulatory reporting requirements.
Lloyd's has attached a timetable to the market bulletin to illustrate the steps it will take with Citibank to effect the movement of assets away from the LATF.