Accredited Lloyd's broker

A broker in Lyon gets a political risk request from a manufacturer for a plant in West Africa. The market that writes that risk is on Lime Street, but no syndicate will take the submission from him directly: he is not accredited. He hands it to a London broker who is, who shows it at the box, and the two split the brokerage. Lloyd's gets most of its business from brokers it has accredited; a managing agent may also deal with its coverholders, its own service companies, the insured directly or an intermediary that meets the Council's criteria. Accreditation is granted by the Corporation, on application, and then reviewed. It requires authorization from the regulator, the FCA in London or its equivalent abroad, adequate capital and professional indemnity cover, premium handling rules, sanctions and financial crime controls, and systems connected to the market's central accounting and settlement. With each agency the broker signs a terms of business agreement, which among other things says whether a premium paid to the broker counts as payment to the insurer. That point matters the day a broker fails with premiums sitting in its accounts. Accredited brokers number in the hundreds, more and more of them based outside the UK. The broker remains in principle the agent of the insured, even when it prepares all the market documents, contract and data. The other doors exist: the accredited wholesale broker acting as a relay, the coverholder who binds the syndicate under delegation, an agency's service company. Each relay adds brokerage and delay, and the insured pays for the chain. Not to be confused with the coverholder, who binds the syndicate, nor with the wholesale broker, defined by a clientele of brokers and not by an accreditation.