Service company (Lloyd's)

A Leeds broker who is not a Lloyd's broker wants to place a regional haulier's fleet and has no reason to take the train to Lime Street. The syndicate that wants this business opens an office in Leeds, and that office is a service company: a company owned by the managing agent, or its group, that receives from the agent an underwriting authority for its own syndicates; writing for a third-party managing agent is possible, but Lloyd's attaches conditions to it. Lloyd's approves it as a coverholder, puts it on the same register and applies the same delegated authority framework, with one basic difference: the delegate and the delegating agent belong to the same group. The office's underwriters are group employees, the rating guide comes from the agent, the commission becomes an internal transfer and control runs through the reporting line rather than through a third-party audit. They are found in the British regions, on small retail business the Room would never see, and abroad, where local regulation requires an entity on the ground; several Lloyd's platforms outside London rest on this structure. The weak point comes from the same feature as the advantage. Because the agent is watching itself, the temptation is to lighten what it would demand of an independent coverholder, and it is in the regional office that a rating guide drifts while nobody in London reads the bordereaux. Lloyd's still holds the agent responsible for everything the office writes. Not to be confused with the independent coverholder, a broker or MGA outside the group, nor with Lloyd's Brussels, which issues European policies for all syndicates.