The Insurance Accounts Directive (Lloyd's Syndicate and Aggregate Accounts) Regulations 2008

PART 2 U.K.AUDITORS

Appointment of auditor for aggregate accountsU.K.

5.—(1) Subject to sub-paragraph (3), the members of the Society of Lloyd's must appoint the auditor for the aggregate accounts for each financial year, unless the auditor is deemed to be re-appointed in accordance with paragraph 6(2).

(2) For each financial year for which the auditor is to be appointed, the appointment must be made before the end of the period of 28 days beginning with the end of the time allowed under regulation 18(3)(a) for preparing the accounts required by regulation 18. This is the “period for appointing auditors” for the purposes of this Part of this Schedule.

(3) The Council of Lloyd's may appoint an auditor for the aggregate accounts to fill a casual vacancy in the office of auditor.

(4) Where no appointment has been made under paragraph (1) by the end of the period for appointing auditors, and the auditor in office is not deemed to be re-appointed under paragraph 6(2)—

(a)the Council of Lloyd's must within one week from the end of that period give notice in writing to the Authority of that fact; and

(b)the Authority must appoint an auditor for the aggregate accounts to fill the vacancy as soon as possible.

(5) If the Council of Lloyd's fail to give the notice required by this paragraph, an offence is committed by—

(a)the Society of Lloyd's; and

(b)every member of the Council who was in default.

(6) A person guilty of an offence under this paragraph is liable on summary conviction to a fine not exceeding level 3 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 3 on the standard scale.

Term of office of auditors of the aggregate accountsU.K.

6.—(1) An auditor of the aggregate accounts holds office in accordance with the terms of his or her appointment, subject to the requirements that—

(a)the auditor does not take office until any previous auditor ceases to hold office; and

(b)the auditor ceases to hold office at the end of the next period for appointing auditors unless re-appointed.

(2) Where no auditor has been appointed by the end of the next period for appointing auditors, any auditor in office immediately before that time is deemed to be re-appointed at that time, unless—

(a)Lloyd's byelaws require actual re-appointment; or

(b)the deemed re-appointment is prevented by the members of the Society of Lloyd's under paragraph 7; or

(c)the members of the Society of Lloyd's have resolved that the auditor should not be re-appointed.

Prevention by members of deemed re-appointment of auditorU.K.

7.—(1) An auditor of the aggregate accounts is not deemed to be re-appointed under paragraph 6(2) if the Council of Lloyd's has received notices under this paragraph from members of the Society of Lloyd's representing at least the requisite percentage of the total voting rights of all members of the Society who would be entitled to vote on a resolution that the auditor should not be re-appointed.

(2) The “requisite percentage” is 5%, or such lower percentage as is specified for this purpose in Lloyd's byelaws.

(3) A notice under this paragraph—

(a)may be in hard copy or electronic form;

(b)must be authenticated by the person or persons giving it; and

(c)must be received by the managing agent before the end of the financial year immediately preceding the time when the deemed re-appointment would have effect.

Removal of auditors on improper groundsU.K.

8.—(1) Where an auditor of the aggregate accounts is removed from office, an application may be made to the High Court under this paragraph.

(2) The persons who may make such an application are—

(a)any member of the Society of Lloyd's; or

(b)the Authority.

(3) Where the Court is satisfied that the removal was—

(a)on grounds of divergence of opinion on accounting treatments or audit procedures; or

(b)on any other improper grounds,

it may make such order as it thinks fit for giving relief in respect of the removal.

(4) The Court may, in particular—

(a)declare that any decision to remove an auditor, or to appoint a new auditor in place of the auditor, is void;

(b)require the members of the Society of Lloyd's to re-appoint the auditor; or

(c)give directions as to the conduct of the Council of Lloyd's affairs in the future.

Duty of auditor to notify appropriate audit authorityU.K.

9.—(1) Where the auditor of the aggregate accounts ceases to hold office before the end of his or her term of office, the auditor must notify in writing the appropriate audit authority.

(2) The notice must—

(a)inform the appropriate audit authority that the auditor has ceased to hold office; and

(b)be accompanied by a statement of the reasons for the auditor's ceasing to hold office.

(3) The auditor must give notice under this paragraph—

(a)if the auditor resigns, at the same time as the auditor informs the Council of Lloyd's of his or her resignation (whether by notice or otherwise);

(b)in any other case, not later than the end of the period of fourteen days beginning with the date on which the auditor ceases to hold office.

(4) A person ceasing to hold office as auditor who fails to comply with this paragraph commits an offence.

(5) If that person is a firm an offence is committed by—

(a)the firm; and

(b)every officer of the firm who is in default.

(6) A person guilty of an offence under this paragraph is liable—

(a)on conviction on indictment, to a fine;

(b)on summary conviction, to a fine not exceeding the statutory maximum.

(7) In proceedings for an offence under this paragraph it is a defence for the person charged to show that he or she took all reasonable steps and exercised all due diligence to avoid the commission of the offence.

Duty of Council of Lloyd's to notify the appropriate audit authorityU.K.

10.—(1) Where the auditor of the aggregate accounts ceases to hold office before the end of his or her term of office, the Council of Lloyd's must notify in writing the appropriate audit authority.

(2) The notice must—

(a)inform the appropriate audit authority that the auditor has ceased to hold office; and

(b)be accompanied by a statement of the reasons for the auditor's ceasing to hold office.

(3) The Council of Lloyd's must give notice under this paragraph—

(a)if the auditor resigns, not later than the end of the period of fourteen days beginning with the date on which the auditor first informs the Council of his or her resignation (whether by notice or otherwise); and

(b)in any other case, not later than the end of the period of fourteen days beginning with the date on which the auditor ceases to hold office.

(4) If the Council of Lloyd's fails to comply with this paragraph, an offence is committed by—

(a)the Society of Lloyd's; and

(b)every member of the Council who was in default.

(5) A person guilty of an offence under this paragraph is liable—

(a)on conviction on indictment, to a fine;

(b)on summary conviction, to a fine not exceeding the statutory maximum.

(6) In proceedings for an offence under this paragraph it is a defence for the person charged to show that he or she took all reasonable steps and exercised all due diligence to avoid the commission of the offence.