Lloyd's fights off rebel challenge

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The Independent Online
THE ruling authorities of the Lloyd's insurance market yesterday gained a vital vote of confidence from members following a direct challenge from more than 4,000 rebel 'names' stung by underwriting losses totalling pounds 2bn.

A motion expressing every confidence in the market's council was carried in a postal vote by 18,508 votes to 4,543. The council was backed by 80.3 per cent of those who voted on a turnout of 72 per cent.

Four motions from rebels suggesting various ways of alleviating the burden of losses on individual members were all heavily defeated.

A resolution seeking a way of taking members off years of account that have been left open because of uncertainty over future claims was defeated by 14,484 votes to 8,255.

Resolutions asking the council to provide a register of the financial interests of its present members, to co-operate fully with all groups representing members and to rescind an emergency levy imposed in July on all members were defeated by between 3,000 and 6,500 votes.

However, the result of the confidence vote brought claims of victory from both sides. Claud Gurney, a rebel external member who is seeking reparations for the large losses that members are facing, said the result was 'fantastic'.

Mr Gurney stressed that those like himself who did not work in the market but provided the capital to allow Lloyd's to function had given a majority vote in favour of his critical resolutions.

David Coleridge, Lloyd's chairman, said: 'I am very pleased. I think it is the first time the silent majority have been given a chance to vote.'

The celebrated Lutine Bell on the market floor, the traditional signal of good news, was struck twice yesterday after Mr Coleridge made a short announcement detailing the results.

Vigorous applause broke out, as opposed to the usual calls of 'resign, resign' that have been made by the members in the past few months as they have protested about the losses that threaten to ruin them.

Among the rebels, however, Mr Gurney is planning to return to the fray. Another extraordinary general meeting is under consideration. Among the resolutions he proposes to put forward is one that will call for an independent chairman of Lloyd's.

The last extraordinary meeting which he organised in July attracted 2,500 members. Many accused the 28-member council, headed by Mr Coleridge, of contributing to their losses by failing to regulate the market properly.

Mr Coleridge yielded to mounting pressure with an announcement that he would not stand for re-election at the end of the year.

Mr Gurney plans to put forward his call for a further meeting unless

Mr Coleridge accepts his plans for reforms of the market.

The idea does not appeal to Mr Coleridge. 'Each one of these meetings costs at least pounds 100,000 plus management time and loss of business in the market,' he said. The reform programme, drawing on two reports compiled by senior City figures earlier this year, would continue, he said.

All Lloyd's meetings are held on the trading floor but the market intends to hold future meetings elsewhere.

Lloyd's council will consider whether any subsequent call for an extraordinary general meeting in the wake of the vote is an abuse of procedure. The council is due to meet the week after next.

Lloyd's is heading for a 1990 loss of around pounds 1.5bn, according to Chatset, the independent analysts.

The forecast was based on profit and loss estimates for 1990 issued by 70 per cent of Lloyd's underwriting syndicates, which indicate an underwriting loss of pounds 750m.

To this, Chatset has added its own estimate of a further pounds 750m deficit made up of shortfalls from previous years plus expenses. In January, Chatset forecast a loss of pounds 1.2bn for 1990.