Lloyd's drops plan to limit relief

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MEMBERS of Lloyd's of London who rejected a pounds 900m offer of help this week will be able to apply to a hardship committee within the market for financial support.

Lloyd's has dropped its initial proposal, made when the offer was launched late last year, that anyone who refused the offer would not be eligible to seek relief from the hardship committee, headed by Lady Archer.

Had Lloyd's been able to push through the settlement, anyone who had not accepted would not have been entitled to apply to the committee.

Lloyd's members have been hit by losses of pounds 5.5bn in the past three years. A further pounds 2bn worth of losses is expected this year.

Meanwhile, Lloyd's names have suffered another financial setback. Names who sought to limit their losses through the arrangement of stop-loss insurance with Municipal General Insurance, which stopped accepting business in 1992, will not be paid out on their policies for an indefinite period.

Municipal General is part of Municipal Mutual, the local authority-owned insurance company that stopped accepting insurance business in 1992. Lloyd's members are believed to have policies with Municipal that could have led to payouts of about pounds 100m.