Lloyd's To Begin Annual Accounting
By Lisa Howard, International Editor
NU Online News Service, Nov.19, 3:07 p.m. EST, London?Lloyd's, the global insurance market, announced a significant step today in moving to annual accounting as its statutory reporting regime on Jan. 1, 2005.
On that date, Lloyd's said it would adopt U.K. Generally Accepted Accounting Principles. Although Lloyd's will initially adopt U.K. GAAP, it plans to adopt International Accounting Standards when there is more clarity on the proposed standard on accounting for insurance contracts, Lloyd's said in a statement.
The move to adopt U.K. GAAP will mean that Lloyd's will move from the current three-year accounting system for both syndicates and the Lloyd's global accounts to annual accounting for its statutory reporting.
The move is in line with the commitment by the Lloyd's Franchise Board for syndicate accounts to be more transparent and comparable with the accounts of their global industry peer group.
"Moving to annual accounting from three-year accounting, which has been unique to this market, will make it easier for the industry to compare Lloyd's performance to our peers," said Andrew Moss, director of finance.
"It is a positive step in line with Lloyd's commitment to create greater transparency," he said.
Simon Sperryn, chief executive officer of the Lloyd's Market Association, said: "Having worked with Lloyd's to develop the proposal to adopt U.K. GAAP, we are pleased with the Franchise Board's decision. We believe that the use of U.K. GAAP will significantly improve the understanding of the market's performance."
In the coming months, Lloyd's and the LMA will work closely toward achieving full implementation, Lloyd's said.
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