Brokers no longer need to pass the Lloyd's Introductory Test (LIT) in order to place business at Lloyd's.
Following the transfer of regulation of brokers to the General Insurance Standards Council (GISC), new requirements have been put into place.
Now, intermediaries broking business on behalf of a commercial customer no longer need to sit the LIT, but must take out and maintain levels of professional indemnity insurance higher than those required by the GISC.
This means brokers must have a maximum indemnity limit of £3m and four times net annual retained brokerage for European Union business other than marine, aviation and transport business.
In addition, they will need six times net annual retained brokerage for all other business, provided the maximum limit does not exceed £30m.
Currently, the GISC's professional indemnity insurance provisions require a minimum limit of indemnity equal to the greater of £1m and three times net annual retained brokerage up to £10m.
The new requirements will come into effect on September 26.