Lloyd's braces for showdown with rebel names

LLOYD'S names meet tomorrow to protest about the pounds 2bn worth of losses they have suffered and the conduct of their affairs by the insurance market's officials.

At an unprecedented extraordinary general meeting, Lloyd's ruling council will be challenged by a group of names led by Claud Gurney to provide further financial help.

Mr Gurney is also attempting to stop a levy of names to raise pounds 500m to lift Lloyd's central fund, designed to protect policyholders, to pounds 1bn.

He wants the council to reveal their business interests so that any conflicts of interest may be identified, and he is asking for further information to be provided to names so they can assess their affairs.

Lloyd's has agreed that its council should provide more information about members' involvement in the market. But Lloyd's chairman David Coleridge has urged members to vote against Mr Gurney's other demands.

At the meeting, Mr Coleridge is expected to confirm that he does not intend to seek re-election as chairman for 1993 and that elected members of the council will also stand down, with some offering themselves for re-election.

The upheaval has been prompted by proposals from Sir Jeremy Morse, a council member and chairman of Lloyds Bank, that Lloyd's council should be halved from 28 to 14, with many of its responsibilities delegated to two other bodies: one in charge of regulation and the other of overseeing business development.

Mr Gurney has told the members: 'The council has brought the Society (of Lloyd's) and the market to the brink of insolvency and confidence in the name of Lloyd's to an all-time low.'

There are divisions, however, among the names. The Association of Lloyd's Members, which claims to represent the interests of more than 8,000 names, angered many when it urged them to vote against Mr Gurney's plans and for its own resolution of confidence in the council.

Neil Shaw, chairman of sugar group Tate & Lyle and the association's newly elected chairman, criticised Mr Gurney's resolutions as 'plainly prejudicial to Lloyd's commercial standing'.

He added that the case for voting against all Mr Gurney's proposals 'is that collectively they might be seen as qualifying members' confidence in the council, which would negate or delay all the changes now being made to improve the operations of Lloyd's'.

Mr Shaw's intervention has prompted a wave of resignations from the association.

Other professionals in the market are concerned about the worsening situation. David Springbett, a leading insurance broker, has sent a report to Mr Shaw in which he claims 'many of the traditional methods of transacting the business (at Lloyd's) are dated. This process is expensive and often clumsy and is capable of improvement, so as to allow policyholders a better deal and members a better investment'. He has urged a range of reforms.