Link to Lloyd's Newsletter

Link to Lloyd's Newsletter
August 2011

In this issue Golf outing to benefit the Katie School of Insurance Lloyd's Illinois surplus lines compliance Katie School of Insurance interns at Lloyd's Insurance Industry Charitable Foundation elects Midwest Board of Directors Lloyd's North America Broker Program Folllow us on Twitter @linktolloyds

Golf outing to benefit the Katie School of Insurance We're hosting our 3rd annual golf outing to benefit the Katie School of Insurance in September. The proceeds from this event provide assistance to the two interns the Katie School sends to Lloyd's in London every summer. Ask your company to sponsor a hole or come out and join us for a fun, casual afternoon of golf to support this worthy cause! Register here Monday, September 19, 2011 at the Itasca Country Club Noon lunch buffet \| 1 pm shotgun start \| 5:30 pm dinner buffet $125 per golfer \| Hole sponsorships with signage for $100 back to top

Lloyd's Illinois surplus lines compliance by Tom Oberwetter, Manager, Compliance, Lloyd's Illinois Well, the time has finally arrived! The Nonadmitted and Reinsurance Reform Act (NRRA) became effective on July 21, 2011. The new law is expected to significantly increase the efficiency in purchasing surplus lines insurance for all of those involved in the transaction, from the insurance company to the consumer. NRRA will simplify the surplus lines broker’s payment of premium taxes on multi-state risks by requiring that all premium tax due to the states in a surplus lines transaction be paid to one state - the insured’s "home state" as defined by NRRA. This eliminates the need for the surplus lines broker to pay tax in each of the individual states where there is an exposure in a multi-state transaction. Here are a few key takeaways from NRRA that may apply to your Lloyd’s placements. First and foremost, we all need to be aware that NRRA only applies to "non-admitted / surplus lines" business written via unauthorized insurers. Please remember that Lloyd’s is an admitted (authorized) insurer in Kentucky and the US Virgin Islands and not subject to NRRA there. In Illinois, Lloyd’s underwriters enjoy a dual platform. They have the ability to participate on placements on an admitted basis or as a surplus lines insurer - but only in those circumstances when the risk cannot be placed in the admitted market. All stakeholders need to ensure that the premium being reported to the "home state" is the same premium being reported to Lloyd’s through the approved Lloyd’s US intermediary, ie the Lloyd’s correspondent or coverholder. Policies and endorsement effective before July 21, 2011 that contain Illinois exposure will still need to be submitted to Lloyd’s Illinois for vetting, countersigning and recording. Policies and endorsements effective after July 21, 2011 that identify Illinois as the "home state" must be submitted to Lloyd’s Illinois for vetting, countersigning and recording. Please ensure that the Illinois premium is clearly identified on the policy or endorsement and that we are notified of the Illinois surplus line member number or the name of the licensed Illinois surplus line producer. Lloyd’s Illinois will continue to submit surplus lines policies and transactions to the Surplus Line Association of Illinois on behalf of Lloyd’s stakeholders. The Illinois Department of Insurance has published Bulletin CB2011-09 that outlines nationwide regulatory changes that will affect the placment of nonadmitted insurance in Illinois. Lloyd’s has published Market Bulletin Y4500 for Lloyd's managing agents and brokers which summarizes the changes introduced by NRRA and how they will impact the Lloyd’s market. The bulletin also outlines several key definitions which have been created by the NRRA legislation and describes how Lloyd’s admitted business should be processed through the three US representative offices in Illinois, Kentucky and the US Virgin Islands. You can see more information about Lloyd's and US surplus lines reform at lloyds.com. Please feel free to contact the Lloyd's Illinois compliance team if you have any questions. Tom Oberwetter, Manager, Compliance, +1 312 407 6204 Email John Dinges, Assistant Manager, Compliance, +1 312 407 6210 Email Katie DuMoulin, Assistant Manager, Broker Relations, +1 312 407 6215 Email back to top

Katie School of Insurance interns at Lloyd's by Aaron Augustyniak and Dan Fuld The Katie School of Insurance and Financial Services at Illinois State University is dedicated to providing students with the opportunity to experience the insurance market through industry conferences and international internships like the one at Lloyd's. Aaron Augustyniak and Dan Fuld spent part of their summer at Lloyd's in London. Here's their report. Lloyd’s of London is considered in many aspects to be the heart of the insurance world. The shear amount of capacity that Lloyd’s is able to offer is unparalleled by comparison with other world markets. We were very fortunate to have the opportunity to travel to London to experience this market for four weeks through the Katie School and with support from the Association of Lloyd’s Brokers. During our stay in London we had the chance to visit various syndicates and broking firms and experience how these two very different roles function at Lloyd’s to make the market work. We were able to sit with a different company each day and see exactly how business was conducted at a nuts-and-bolts level. Each organization we visited had explicit expertise in the specific markets in which they were involved - so we were able to narrow in on a different aspect of the insurance world from day to day. We learned that the role of the Lloyd’s Corporation is to be the facilitator for the managing agents who operate syndicates in the market. We were able to see at first hand the inner workings of this multi-billion dollar global marketplace and to understand the significant role it plays in the everyday productivity of the insurance world. We quickly became aware that the Lloyd's market and the US market are extremely different. For example, social relations and face-to-face communication play an important part at Lloyd's. We saw many deals and important exchanges taking place at the underwriting "boxes" in semi-formal social settings. We observed business conversations between brokers and underwriters that were full of friendly, light-hearted exchanges. Many meetings were conducted over a casual lunch or at after-hours events. Everything seemed to be based on trust. We found this aspect of Lloyd’s to be unique and beneficial. Fundamentally, though, the way the business is conducted at Lloyd's is very traditional. Liveried "waiters" at the doors to the building, men and women in sober bespoke suits, the underwriting boxes, the Rostrum and the Lutine Bell all speak to a sense of history, tradition and permanence. With more than 300 years behind it, this is a market that will continue to run efficiently for years to come. We are very appreciative of the opportunity we were given to travel abroad and expand our knowledge of the insurance world. We were very impressed by Lloyd’s of London. The experience we gained this summer is something we could never get in a classroom setting. back to top

Insurance Industry Charitable Foundation elects Midwest Division Board of Directors The Insurance Industry Charitable Foundation is a 501 (c) 3 tax exempt corporation and serves as a united philanthropic voice of the insurance industry. The Industry Foundation was established in 1994 and is completely directed and funded by the insurance industry. The foundation seeks to help communities and enrich lives by uniting the collective strengths of the industry to provide grants, volunteer service and leadership. Since its inception the foundation has contributed more than $17 million and over 140,000 volunteer service hours to hundreds of community nonprofit organizations. The Insurance Industry Charitable Foundation introduced and approved the Midwest Division Board of Directors and Executive Committee slate on May 12, 2011 at the inaugural Midwest Division Board of Directors meeting. Twelve senior executives representing companies operating in the Chicago area serve on the Midwest Division Board of Directors. Kathleen Savio of Zurich North America will Chair the newly launched Midwest Division. Kathleen serves as Executive Vice President and Chief Administrative Officer for Zurich North America Commercial. She is also Chief of Staff and Head of the Office of the CEO. Ms. Savio is responsible for Strategy and Operational Planning & Execution, Corporate Communications, HRBP/Talent Management, Community Relations & Corporate Giving, and the governance functions of Internal Audit and Risk Management for Zurich North America Commercial. She is also a member of the Z Zurich Foundation board. "Through the Foundation, we have a great opportunity to join a national industry-wide effort, while working, at the same time, to better our local community. As we work to establish the Foundation here in the Midwest, we are committed to addressing the community needs unique to the Chicagoland area," said Ms. Savio. Joining Chair Kathleen Savio on the Midwest Division Board of Directors is Vice Chairman Tom Ealy of Willis Group Holdings, Treasurer Michael Powell of CNA, Grants Chair William Donnell of Swiss Re and Fundraising Co-Chairs Deborah Broderick of Wells Fargo Insurance Services and Richard Gulliver of Hub International. Board members at-large include Peter Hahn of McKinsey & Company, Kevin Smith of Chubb, James Dwyer of Dewey LeBoeuf, Adrian Matthews of ACE Group, Patrick Talley of Lloyd’s America, and Tom Pluss of Lockton Companies. These outstanding executives and their organizations serve as the collective governance for the Midwest Division, providing critical leadership and guidance to Foundation operations in the Midwest. "We are honored to have the support, involvement and leadership of these outstanding individuals and their companies", said Bruce Basso, Chairman of the Board of Governors, Insurance Industry Charitable Foundation and Chairman/CEO of the Worldwide Broker Network. The Midwest Division will initially focus on serving the Chicagoland area, but will continue expanding its reach to involve other Midwestern states: Indiana, Iowa, Kansas, Illinois, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin. If you would like to learn more about the Midwest Division or have an interest in participating with the board or foundation please contact Kimberly Saccaro, Executive Director of the Midwest Division, at (312) 384-0644. To learn more about the Insurance Industry Charitable Foundation visit them on the web at www.iicf.org. back to top

Lloyd's North America Broker Program from lloyds.com A group of 30 brokers from across the US and Canada spent an intensive week at Lloyd’s in June as part of an annually organised broker programme. The brokers came to London for five days to learn about the Corporation of Lloyd’s, spend time in the underwriting room and build relationships with a variety of Lloyd’s brokers and underwriters. Hank Watkins, President of Lloyd’s America, said, "We’re delighted to host such a talented group of brokers this week. The surge in applications for the June 2011 programme is in many ways a reflection on the healthy, growing relationship between the Lloyd’s market and our partners in the North American brokerage community." Support for the programme Beazley, Hiscox, Miller Insurance Services, BMS and Price Forbes hosted networking events for the group and Lloyd’s CEO Richard Ward met with all the attendees at the end of the week to wrap up the event. This year’s brokers come from the retail, wholesale and reinsurance and have from 5 to over 25 years experience. They are experts in the fields of aviation, casualty, construction, marine & energy, property, professional liability, and sports & entertainment. Todd Morin, Senior Vice President at NAPCO LLC, a Lloyd’s coverholder in New Jersey, has 27 years of experience in the insurance industry and participated in the programme this year. He said, "Lloyd’s has always been an important market for our organisation. Put simply, we wish to strengthen our participation with Lloyd’s in order to learn new ways to enhance our trading relationship with each other." Participants in the Broker Programme are nominated by their firm and complete an application. To qualify for the programme, participants are encouraged to have a minimum of five years in the insurance or reinsurance business, demonstrate a commitment to active participation throughout the programme and articulate how they believe the experience will enhance their insurance career. If you would like to be involved next year, please contact kiran.bhovan@lloyds.com See a brief video introducing the program from Lloyd's Director Sean McGovern back to top

Views expressed in this newsletter do not necessarily reflect the opinion of Lloyd's. While every effort has been made to ensure that the information given is accurate, no responsibility (legal or otherwise) is accepted by Lloyd's for any errors or omissions. Copyright © 2011 Association of Lloyd's Brokers