Lloyd’s claims widespread support for reforms

There is strong support for a series of reforms aimed at modernizing the world’s oldest insurance market, says Lloyd’s of London in releasing results of consultation on the reforms.The original proposals have been revised somewhat since they were first introduced at the beginning of the year, but key elements remain. The plan involves the creation of “franchises” and elimination of unlimited liability “names”, the individual investors who have traditionally been the back bone of the market, but whose numbers have dwindled with the increased introduction of corporate capital in recent years. Annual accounting would also be part of the plan, rather than the market’s tradition method of reporting every three years.”We now have a set of radical, yet sensible reforms which have stood up to rigorous examination reforms that will improve profitability and transparency, and modernize the Lloyd’s market, while protecting the interests of our members,” says chairman Sax Riley. “During the consultation, we have listened carefully to the views of our members and the businesses operating in the market, and are pleased by the high level of support that’s evident. That support will, I’m confident, translate into a vote strongly in favor of implementation.”Lloyd’s notes broad support for the creation of a franchise system, but somewhat less support for the annual accounting proposal. Nonetheless, Lloyd’s says there is enough support to continue with the proposal.In response to consultation, Lloyd’s is also proposing the formation of a Compliance Committee to ensure the protection of members’ interests. At a Lloyd’s-sponsored seminar this week in Toronto, deputy chair John Coldman urged members to support the reforms. “Policyholders need to be confident in their insurer,” he said. “A Lloyd’s divided by internal tensions will not inspire confidence.” He notes that the proposals are intended to bring stability and transparency to the market. “With the creation of the Lloyd’s franchise, the great dramas associated with our financial performance in recent years — both the highs and lows — will be better managed. That can only mean fewer issues for the market to deal with internally, so therefore more resources to focus on overall customer care, product development and claims management.”Lloyd’s 16,000 members will vote on the proposals at an extraordinary meeting on September 16.