Lloyd's to ratify 1bn pounds rescue

Click to follow
A RESCUE plan amounting to pounds 1bn for 17,000 Lloyd's of London insurance underwriters facing financial ruin is set to be ratified by the market's ruling council on Monday.

The plan, the most ambitious financial rescue in Lloyd's 305-year history, will come under immediate attack from underwriting members, who insist it is not enough to compensate them for the pounds 2bn losses that many claim have wrecked their lives.

Already 125 underwriting agents have been asked for initial contributions, which could range from pounds 5,000 to pounds 1m depending on the size of agency companies' own insurance policies.

Lloyd's is preparing to make a payment of about pounds 300m from its central funds, with a similar amount expected to come from errors and omissions insurers that insured the agency companies against suits for damages.

Lloyd's may look for a further contribution from other companies operating in the market, such as accountancy firms.

Behind the scenes at Lloyd's, intensive discussions have been taking place to see whether any increase can be made to the offer if it is rejected by members.

A panel led by Sir Jeremy Morse, former chairman of Lloyds Bank, has assessed the size of payment that should be made.

Executives at Merrett Holdings, the underwriting agency group, are still trying to find another management group for their syndicates in the wake of a crisis of confidence in the group. They are understood to be in talks with R J Kiln.