Lloyd's council in sack threat

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The Independent Online
A VOTE to bring down the leaders of the troubled Lloyd's insurance market will go ahead despite the widespread reforms announced last week.

The head of a group of 100 angry Lloyd's members confirmed yesterday that he was intending to demand the sacking of the insurance market's ruling council. Claud Gurney, the underwriter, said the group intended to go ahead with its call for an extraordinary general meeting, at which a vote would be taken to replace the council with one 'which has the confidence of all Names'.

Mr Gurney's move has prompted Lloyd's chairman David Coleridge to appeal for the widest possible support among the membership.

'It is vital that we receive a decisive majority of votes in favour of the council,' he said at last week's annual meeting of the Association of Lloyd's members, which aims to protect the interests of more than 8,000 underwriting members.

'The reasons are self-evident. The only way we can take Lloyd's forward is with a strong, determined and resolute leadership.'

He added: 'The organisers of the original resolution wish to register a protest. They are angry and many of them are hurt. But it is not a course which will serve the wider - and I suggest - the best interests of the Society (of Lloyd's). Indeed, this action could serve to damage every member, including themselves.'

As a final rallying call he said: 'We rely on you as interested, committed members of Lloyd's to do all in your power to support us.'

Mr Gurney's action will precipitate Lloyd's first extraordinary general meeting since its rules were changed by an Act of Parliament of 1982. The meeting is scheduled for Monday 27 July. The original request for the meeting stated that the 100 signatories had no confidence in the council of Lloyd's or its chairman. Lloyd's has subsequently received, after extensive behind-the-scenes lobbying by officials, motions expressing confidence in the council. These will also be considered at the meeting.

Mr Gurney's is also calling for:

A scheme to allow members to leave Lloyd's knowing the full extent of their liabilities.

More consultation with members on Lloyd's financial requirements.

The opening of a register detailing all conflicts of interest of council members.

The council's full co-operation with the members over the conduct of their affairs.

Other resolutions at the meeting have come from the Asssociation of Lloyd's Members, which has urged Lloyd's to urgently implement essential reforms contained in an internal report, published earlier this year, and to separate the running of the market from Lloyd's regulatory responsibilities.

Last week, Sir Jeremy Morse's report urged Lloyd's council to delegate many of its responsibilities to two bodies: one to run the market and the other to cover regulation. Another resolution, saying 'the Society has every confidence in the council of Lloyd's' is expected to encounter strong opposition from Mr Gurney's group.

Many underwriting members are concerned about the degree of poor market practice and possible abuse that Sir David Walker uncovered during his investigation into allegations that the market was rigged and operated for the benefit of Lloyd's professionals.

Among Sir David's key proposals in his report last week was a recommendation that Lloyd's should take a more pro- active line in regulating the market and be prepared to intervene in underwriting members. This suggestion has met with a cool response from Mr Coleridge.

At the Association of Lloyd's Members last week, he said 'several of his (Sir David's) recommendations take us close to what we have hitherto shied away from - regulation which may constrain underwriters' discretion'.

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