Representatives of up to 3,000 underwriting members have appealed to Peter Middleton, the chief executive of Lloyd's, to help them meet losses on an insurance syndicate, 126, once managed by the former leading Lloyd's personality, Ian Posgate.
Losses are running in excess of pounds 50m on trading accounts dating back to the early 1980s.
Because of the problems of insurance syndicate 126, the agency company managing the syndicate's affairs, AJ Archer, has been unable to close the books. It is trying to run off the extensive insurance liabilities on the account.
The underwriting members' representatives, led by Kimbarra Mahon, are trying to form an action group to consider legal action against those companies that they believe are responsible for the losses.
The underwriting members have expressed concern about possible conflicts of interest in the way that the run-off of their liabilities on the open year accounts for 1980, 1981 and 1982 is being handled.
The underwriting members are commissioning a report from an independent analyst, Tony South, to examine issues such as whether they have been treated equitably in the conduct of their affairs in their relationship with other insurance syndicates.
The underwriting members have already sought the advice of Mr Posgate, the professional underwriter who accepted business for the 1980-82 accounts. The members are also concerned about the pounds 13m of fees charged for the accounts.
'The run-off has so far cost huge sums,' Ms Mahon has told Mr Middleton.
In other developments at Lloyd's yesterday, an internal loss review, prepared by the market's authorities for syndicate 1011, under the management of the Rose Thomson Young underwriting agency, has concluded that about pounds 10m worth of losses had 'arisen in the normal course of business'.
An inquiry team decided that losses arose because of poor trading conditions in the marine insurance market in 1988.Reuse content