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Lloyd’s control framework for Regulatory & tax reporting. Phase II- Coverholders 2014. Lloyd’s Control Framework . Why it’s important What is it and who does it affect? How is it implemented? The risk model and how it applies Coverholder audit Delivery roadmap 2013-2015 Board sign off…
Phase II- Coverholders
The increasing number of tax audits, notably in Europe, both in the Lloyd's environment and the general insurance market mean that it is even more important to “raise the bar” on information standards to ensure Lloyd's can satisfy tax authorities that requirements have been met.
Control Framework is the managing agents responsibility
Phase I – Completed
39 managing agents successfully signed off on time!
Phase II – Commenced in July 2013
Process for continuous improvement to “raise the bar”
How it may transpire
Requirements are not understood
There are many reasons why this risk may crystallise. It could be that the person interpreting the requirements does not have the requisite skills or experience, human error, or the requirements being unclear or ambiguous
Data capture is inadequate
This may relate to data not being captured, being captured more than once (duplicate) or that the data captured is erroneous. It may also be that data is not refreshed at the appropriate point (if relevant).
Data is processed incorrectly
Between capture and reporting data will undergo some form of processing. In some cases this will be about using different elements of data to compute other information, but it also relates to things such as erroneous report definitions. Typically, this risk can also be used to cover security and continuity risks, but given the specific focus in the Operating Principles these have been broken out.
Data is corrupted
Data may be corrupted accidentally or on purpose. Typically this involved inadvertent or erroneous changes to data when it is being adapted outside of core processing systems.
Data is lost and cannot be recovered
This is most likely to crystallise where historic information is not contained in core processing systems that are subject to a robust backup regime, but in end user computing facilities such as spreadsheets or user maintained databases.
New coverholder audit scope extended to include questions addressing the Control Framework
Areas of focus include: