Names group talks of secret deficit

The Treasury and Civil Service Select Committee looking into self-regulation at Lloyd's was told by the Lloyd's Names Defence Association yesterday that the closely guarded statistics showed most Lloyd's syndicates ran into loss four to six yearsafter having been created, writes William Gleeson. The names claimed Lloyds losses had been covered up for at least two decades by creative accounting.

The losses could only be paid by Lloyd's by drawing in new capital. An NDA member, Roger Bradley, a former Lloyd's underwriter, said: "It was a massive Ponzi scheme." Mr Bradley said the documents he had obtained also showed that syndicate reserves, set by Lloyd's and the Department of Trade and Industry, were below the level of losses foreseen by Lloyd's and recorded in the document. The document had no title or mark to show it was an official. Instead it only had a plain cover, the colour of which changed from one year to the next.

Mr Bradley said the key information about the asbestos losses which hit the market in the early Eighties had not reached the market floor.

Members of the Lloyd's Underwriting Association, which represents Lloyd's professional agencies told the committee Lloyd's needed self-regulation.

Mr Malcolm McKenzie said "he had informal discussions with members of Lloyd's council and the chairman in which he said that his members favoured self-regulation".

Mr McKenzie agreed that some underwriters at Lloyds had not shown a proper duty of care towards names.