October 2, 2001 by Canadian Underwriter
Lloyd’s of London has announced an increase in its "central fund" premium levy which is charged against syndicate members by 0.9% to the 2% level. The new rate becomes effective from next year and will run through to the end of 2003, the insurance market says.
The additional income generated will boost the central fund coffer by about US$1 billion over the next two years. Lloyd’s chairman Sax Riley comments, "this is an exercise in enhancing the market’s financial security for the futureIncreasing the fund does not mean we are expecting syndicates to be unable to meet their liabilities. Clearly some business failures are possible, but this strikes us as a sensible precaution when facing so many unquantifiable aspects of the tragedy [the September 11 terrorist attacks] at this time."