The market's leading figures, the chief executive, Peter Middleton, and the chairman, David Rowland, are working on a plan to rescue Lloyd's from a cash crisis which is threatening it with closure.
Mr Middleton said on Friday: "The council of Lloyd's is currently examining all aspects of the society's operation. As part of this exercise it is studying a wide range of options. Lloyd's is seeking to produce a settlement of all outstanding litigation, to bring finality to the Lloyd's affairs of many members, and to secure a profitable future. No decisions have yet been taken."
The market's latest crisis stems from a rebellion by many of its 33,000 Names - the investors who finance the underwriting syndicates that issue insurance policies on everything from supertankers to a pianist's fingers.
As many as 9,000 Names are believed to be insolvent, owing a total of £1.3bn, which they can no longer pay. In addition, many more Names are simply refusing to meet their commitments, partly because they are suing their syndicates for professional negligence. Because of those suits, the courts are unlikely to force them to pay.
In addition, some insurance companies that owe Lloyd's syndicates money are unable to meet liabilities. They too are on the brink of insolvency as a result of a succession of catastrophes, including the Piper Alpha disaster in the North Sea, European storm damage and the Exxon Valdez oil spill off the coast of Alaska.
And the last resort for the insurance syndicates to draw on, a rainy- day contingency account known as the Lloyd's central fund, is rapidly draining.
So there is nowhere near enough money to meet the £9bn losses Lloyd's has run up in the past five years.
The problem is threatening the solvency of the whole Lloyd's market. In common with all UK insurers, the market must pass an annual solvency test administered by the Department of Trade and Industry. The market's authorities and the DTI are understood to have reached a view - confirmed by a letter written by a senior DTI civil servant to a Lloyd's Name - that the market is unlikely to pass its 1996 solvency test.
If so, without a huge cash injection the market will be unable to continue trading next year.
Mr Middleton will be under strong pressure to come up with a plan in time for next month's annual meeting of Lloyd's.
The market's ruling council is believed to favour a cash call on the Names. This special levy, as Lloyd's calls it, is seen as essential to the survival of the market.
But any levy will need to meet the approval of Names, who have the right to vote on it. In view of the widespread misery Names have suffered in recent years, it is far from certain that they would support a levy.
An alternative being considered is to ask those whose businesses depend on the market's survival to finance its bad debts. Possible contributors include the underwriters and the broking businesses. This approach would be uncertain, because it has not been tried before.
If neither of those proposals is accepted, Lloyd's will be prevented from taking new business. In effect, the market will be wound up and the 60,000 people who work in and around it at present will have to find new jobs.
Many would be re-employed in a reshaped London insurance industry, but the effect on the City's reputation would be devasting, coming as it would on top of the banks' recent refusal to rescue Barings.
"One thing is certain," an insider said, "if we get rid of Lloyd's, no replacement is going to rely on asking individuals to pledge the shirts on their backs. We've seen what happens when people are asked to hand over their shirts - they don't like it."
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