Coleridge to go amid growing Lloyd's turmoil

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The Independent Online
DAVID COLERIDGE, chairman of Lloyd's of London, has decided not to seek re-election as head of the market at the end of this year.

His move underlines the most serious constitutional crisis facing the troubled insurance market in its 300-year history. Its problems were further compounded last night by the resignation of the entire 15-strong Lloyd's Underwriters' Association, representing the influential marine market.

It has already become clear that a senior council member, Bryan Kellett, intends to resign at the end of the year.

The market faces further pressure from working members who want the existing ruling council of 28 to resign in the wake of a reform programme proposed by Sir Jeremy Morse, who was asked by Lloyd's to review its government.

There is confusion about how the new chief executive should be appointed if the present chairman departs at the end of this year, as well as dismay within the market about some of the reforms proposed in the wake of the market's pounds 2bn losses.

One man tipped to succeed David Coleridge as chairman is David Rowland, chairman of Sedgwick, the insurance broking group, who carried out a review of Lloyd's future over the next five to seven years at the request of Lloyd's.

Mr Rowland's proposals on the form of government for Lloyd's, were initially rejected by Mr Coleridge and Alan Lord, who was chief executive, in January of this year. After protests by the members, Lloyd's recruited Sir Jeremy Morse to re-examine the proposals, which he largely agreed with, and these have been accepted.

But the departure of Alan Lord, a former top civil servant, when he retired last month, and the confusion following the publication of the Morse proposals this month, have created a power vacuum in Lloyd's. Insiders argue that it is impossible for a new chief executive to be appointed without the approval of a chairman he is likely to serve with.

Since Mr Coleridge has indicated that he is not seeking re- election as chairman - under Lloyd's rules he has to be elected each year by his governing body - they say the appointment of a chief executive should be delayed until a successor to Mr Coleridge has been found.

The latest crop of difficulties comes ahead of an important vote later this month that has its basis in a resolution of no confidence lodged by 110 members.

Professionals in the market are arguing that the move by the LUA is a clear signal by the most influential sector of the market - Lloyd's is the world's largest insurer of ships and their cargoes - that the entire Lloyd's council of 28 should resign to allow Sir Jeremy's reforms to come in.

Sir Jeremy, chairman of Lloyds Bank and a member of Lloyd's council, proposed that the present ruling body should be halved in size and a new, full-time, paid chairman appointed.

Stephen Merrett, chairman of the LUA and a former member of Lloyd's council, has told his members in the marine market that his committee needed to confirm the level of support from marine underwriters in the light of proposed reforms.

'Accordingly, the committee has tendered its resignation and is offering itself to the membership for re-election. It has been decided that this election should take place immediately.'

A ballot paper is to be circulated to the membership in the next few days.

In spite of the proposed reforms, members are mustering to express their disapproval of the the way their affairs have been run at an extraordinary general meeting on 27 July.