Which regulator[s] would authorise a Lloyd's broker?

A Lloyd's broker must be authorized by both the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) to operate legally within the UK insurance market. The FCA is responsible for ensuring that firms conduct their business with integrity and protect consumer interests, while the PRA focuses on the financial soundness and stability of firms, particularly those that could pose a systemic risk to the financial system.

Authorizing a broker entails a comprehensive assessment of the firm’s business model, governance, prudential resources, and compliance with regulations. The dual oversight by both regulators ensures that Lloyd's brokers not only function effectively within the operational framework of the Lloyd's market but also adhere to broader regulatory standards aimed at maintaining market integrity and protecting policyholders.

Choosing a single regulator, such as only the FCA or the PRA, would not address the complete regulatory requirements necessary for Lloyd's brokers, as both aspects of conduct and prudential oversight are critical in the complex environment of insurance. Therefore, an understanding of how both the FCA and PRA contribute to the authorization process is essential for grasping the regulatory landscape governing Lloyd's brokers.