The surprise move comes from one of the market's leading professional brokers, Ted Benfield. He is chairman of Kininmouth Lambert Marine XL, part of the influential Lowndes Lambert broking group.
Mr Benfield has called on Ian Barrett, general manager of Lloyd's registration and review division, to 'institute whatever procedures are necessary' to bring about the reopening of the 1989 trading account of syndicate 745 and a new audit.
His letter, sent on Tuesday, represents an unusual challenge to the market's regulatory responsibilities.
If the authorities refuse the request they will face accusations of trying to conceal the background of the losses. If Lloyd's agrees it could set a dramatic precedent in which all the market's accounting procedures might be called into question.
Mr Benfield is a member of syndicate 745 and is leading the formation of an action group that could be supported by 1,750 underwriting members who form the syndicate.
He is the only professional within Lloyd's who is spearheading the formation of an action group to gain help for the members, many of whom face financial ruin.
Mr Benfield is concerned that the losses could be far worse than expected.
He estimates that losses on the 1989 and 1990 underwriting accounts could rise as high as pounds 400m for the two-year period.
The losses that have hit the syndicate have been caused by larger- than-expected payouts on insurance claims arising from European storm damage in 1990.
The managers of syndicate 745, KPH Underwriting Agencies, have already warned that the forecast pounds 132.5m losses expected for the 1990 account could 'be subject to material change'.
Unlike conventional insurance companies Lloyd's, as a market, keeps its insurance accounts open for three years to gain a better assessment of potential liabilities.
Last October, KPH asked its former underwriter, David King, to resign from his post because of the deteriorating position.
The authorities of Lloyd's yesterday announced that they have developed a 'business plan' to develop the market's profitability over the next few years.
It is the first plan of its type to be devised in Lloyd's 305-year history.
The market faces further losses of up to pounds 2bn after reporting losses of more than pounds 2bn last year. In three trading accounts Lloyd's will have lost more than pounds 4.5bn.
The new business plan is intended to resolve the problems of the last three trading accounts in the market.Reuse content