FCA strategy for Lloyd’s & London Market Intermediaries & MGAs
The FCA has issued a ‘Dear CEO’ letter setting out its main areas of concern and its expectations of firms in the Lloyd’s and London Market Intermediaries and Managing General Agents (LLMI) portfolio.
The FCA says its supervisory work will concentrate on the perceived drivers of potential harm to customers and markets. The ‘key drivers of harm’ or themes have been identified by the FCA as:
Financial Resilience and Orderly Wind down
Ineffective Governance and Oversight of businesses
Culture and Non-Financial Misconduct
Business Models which provide poor oversight of distribution chains
Recognising the significant challenges that many firms face from the Covid-19 pandemic, hardening markets, EU withdrawal and cyber crime, the FCA makes clear that firms need to address any shortcomings in these areas. In particular, they must continue to meet the capital requirements and Threshold Conditions.