The move follows the announcement from Lloyd's last May that it favoured giving up self-regulation for supervision by an external authority. Inadequate regulatory control has been partly blamed for the huge losses run-up by Lloyd's between 1988 and 1992. The move was quickly welcomed by Lloyd's and the Association of Lloyd's Members, which represents some 8,000 names - the traditional backers of the market.
The Government yesterday announced plans to give its new super-regulator, the Financial Services Authority (FSA), extensive supervisory powers over Lloyd's of London for the first time in its 300-year history. The Treasury minister Helen Liddell said the FSA would have intervention and authorisation powers to ensure a greater independent element in the regulation of the insurance market.