Insurance underwritten at Lloyd’s of London: syndicates
Syndicates are entities formed solely for the purposes of writing insurance within the Lloyd’s market. A syndicate is a group of Lloyd’s members, whether corporate or individual, who have joined together to insure risks. The members share in profits made by the syndicate but have several liability (that is, each member is liable for his own losses but members are not liable for each other’s).
A syndicate can have as many as hundreds of members or as few as one corporate member. In addition, members can choose to participate in as many, or as few, syndicates as they wish.
Each syndicate is a venture established for a Lloyd’s year of account which is closed when the syndicate year of account ‘reinsures to close’, usually into the following year of account of the same syndicate.
Syndicates are generally known by numbers. For example, Syndicate 2623 managed by Beazley Furlong Ltd is known simply as ‘Syndicate 2623’. If it is necessary to distinguish between different years of account of the same syndicate the year of account is put in brackets. Therefore, ‘Syndicate 2623 (2003)’means the 2003 year of account of that syndicate.
Syndicates are authorised, but not necessarily restricted, to write insurance business under the following broad headings; Marine; Aviation; Catastrophe; Professional indemnity; and Motor.
Syndicates are registrable for VAT in accordance with VATA 94 S 46(3) to account for the supplies of insurance. They can recover non-attributable input tax in accordance with the provisions of the LVA. Syndicates can only use stagger 1 as can any other VAT registered Lloyd’s associated entity.
(See also VATINS4810 for information on assurance issues relating to syndicates.)