Some of those worst hit by the insurance market's disastrous results for 1990 said they would meet their commitments or seek help from the Lloyd's hardship committee before giving up their seats in the House of Commons. A bankrupt may not sit as an MP.
At least 47 Tory MPs, including three Cabinet ministers, are believed to have incurred significant losses as a result of Lloyd's trading deficit of about pounds 2.6bn for 1990. There was concern among Conservatives yesterday that any members being made bankrupt would cause by-elections and reduce the Government's majority from 18.
But many of those facing losses dismissed the fears. Sir Richard Body (Holland with Boston), whose losses are estimated to be in six figures, said: 'I am not going bankrupt and I have not heard of another Conservative MP who is faced with it. It is not in Lloyd's interest to make people bankrupt and, because (Lloyd's) members have already pledged a minimum of pounds 250,000 in assets - aside from their home - it would not be in their interests to go voluntarily bankrupt.'
There was no official offer of help from the Conservative Party yesterday. Since the matter was first highlighted by the Independent on Sunday, government whips have believed several MPs might be severely pressed but none would be bankrupted. No contingency plans have therefore been made to bail them out. This does not, however, rule out private donations from wealthy party supporters.
Sir Richard's stance was echoed by, among others, Sir Nicholas Bonsor (Upminster), whose losses could be up to pounds 56,000 if his investment was the Lloyd's average of pounds 25,000 per line of insurance.
Those thought to be facing losses include David Hunt, the Secretary of State for Employment ( pounds 58,250 from an average investment); Ian Lang, the Secretary of State for Scotland ( pounds 67,800 from average investment); Peter Brooke, the Secretary of State for National Heritage ( pounds 16,000 from average investment); and Sir Norman Fowler, Conservative Party chairman.
Sir Nicholas Lyell, the Attorney General, has losses, if based on the Lloyd's investment average, of about pounds 67,000. The Lloyd's 'Blue Book', a restricted guide to members, suggests that David Treddinick, the MP for Bosworth, was the biggest loser in 1990. If he had invested the Lloyd's average his losses would be pounds 235,000.
Paul Marland (Gloucestershire West), whose losses for 1990 would be pounds 160,000 from an average investment, may be facing total losses of up to pounds 500,000 if his deficits for 1988 and 1989 are taken into account. He criticised the management of some syndicates but said he was not faced with bankruptcy and knew of no Conservative MP who was.
More than 2,600 Lloyd's underwriting members, including the former Prime Minister, Edward Heath, face losses of about pounds 61m as a result of their involvement in insurance syndicate 317/661 under the management of RHM Outhwaite (Underwriting Agencies). The underwriting members will be required to pay up to pounds 35m from their own resources to meet the losses.
The syndicate has already suffered losses of pounds 264m for its trading account of 11 years ago. Over a year ago the members secured an out-of-court settlement against the Outhwaite agency, which they were suing for negligence. The members received pounds 116m from the agency's own insurers to meet the losses. The pounds 264m worth of losses arose on asbestosis and pollution damage related risks. The latest pounds 61m worth of losses on the 1990 underwriting account have been caused by the rush of claims against agents' own insurance policies which they take out to protect themselves against suits for damages by their clients or members for whom they act.Reuse content