LLM1150 - Introduction to Lloyd's: syndicate capacity: Member’s Agent Pooling Arrangements (MAPAs)

A member may own capacity directly on a syndicate (often referred to as “bespoke capacity”) and through a MAPA (see LLM1110) at the same time.

A MAPA is not a member of Lloyd's, even though on occasion it may be shown as a member of a syndicate for reasons of administrative convenience, for example in Lloyd's ‘Blue Book’. The legal reality is that each member of a MAPA participates directly to a small extent on each of the syndicates for which capacity is pooled for that MAPA.

The MAPA operator manages the pooled capacity on behalf of the members of the MAPA buying and selling capacity at the capacity auctions ( LLM1140) in the same way as a member may do directly.

Joining a MAPA

Members pay cash to join a MAPA and/or bring their existing capacity into the MAPA, if the MAPA operator feels that the bespoke capacity would benefit the MAPA.

The MAPA operator adjusts the MAPA’s portfolio of syndicate capacity through the capacity auction process and “re-balances” the portfolio between the members so that each member has the same share in each of the syndicates in which the MAPA is involved.

Increasing a share in a MAPA

A member can increase their share of a MAPA by subscribing additional cash or by transferring further bespoke capacity to the MAPA.

Pre-emption offers and MAPAs

Where a syndicate’s membership includes one or more MAPAs, a pre-emption offer is made to the operator of a MAPA rather than direct to the Names that are members of the MAPA. It is for the MAPA operator to accept, decline or sell at auction all or part of the pre-emption offer, or allow it to lapse.

Leaving a MAPA

If a member wishes to reduce their share of, or completely withdraw from, a MAPA, the MAPA operator ‘gives’ the member their small share of the capacity in each of the syndicates in which the MAPA is involved. No cash is paid to the exiting member. It is for the member to decide how they wish to dispose of, or rationalise, the capacity with which they are left.