LLM3020 - Reinsurance to Close (RITC) and section 107 FA2000: which Lloyd's members must apply the rules (the 4% rule)

Regulation 7(1) and 7(8) of SI2001/1757 makes clear that the rules only apply to Lloyd’s members that have a 4% or greater share of both the syndicate that pays and the syndicate that receives the RITC ( LLM3080).

For corporate members, the syndicate entitlements of connected companies have to be aggregated in determining whether the member has a 4% share of a syndicate ( LLM3100).

In practice this means that the rules will apply to very few individual members, Scottish Limited Partnerships or one-man corporate members (“Namecos”). Larger corporate members will usually come within the rules.