A clash is brewing over the Financial Services Authority regulation of Lloyd's and the market's modernisation plans, AM Best claimed.
The credit rating agency, which this week confirmed Lloyd's A- (e ...

A clash is brewing over the Financial Services Authority regulation of Lloyd's and the market's modernisation plans, AM Best claimed.

The credit rating agency, which this week confirmed Lloyd's A- (excellent) score, forecast question marks over the FSA's delegation of some of its powers to the market.

The FSA became Lloyd's regulator in December, delegating some duties to the Council of Lloyd's while it concentrates on checking the market's capital adequacy.

AM Best said there was a conflict brewing between the FSA's role and Lloyd's attempts to become more commercially attractive.

In a report on Lloyd's rating AM Best said: "AM Best believes that although the combination of FSA oversight and delegation of supervisory functions to Lloyd's has resulted in thorough monitoring of Lloyd's, it nevertheless leads to tensions that implementations of the Chairman's Strategy Group proposals are likely to exacerbate.

"The ambiguity of self-regulation will come into sharper focus as Lloyd's at the centre adopts a more commercial management perspective.

"For this reason, AM Best believes that it is likely that the continuation of the current FSA delegation arrangements may well be reviewed in future."

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