Canadian Underwriter

Lloyd’s reforms get nod from shareholders

September 13, 2002   by Canadian Underwriter

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As expected, a package of reforms intended to modernize the 300-year-old Lloyd’s of London market has been passed at an extraordinary shareholders meeting yesterday. Despite opposition from associations representing individual members, or names, the reforms were passed with a vote of 79.88% in favour and 20.12% against, Lloyd’s reports.
Commenting on the vote, Lloyd’s chairman Sax Riley says, “”With 80% backing for these reforms, we now have a decisive mandate to implement our proposals for modernisation. The first stage of our work has concluded; the second stage implementation is now underway.”
In a separate release, the Association of Lloyd’s Members (ALM), the largest names’ association, notes that in actual numbers, 3,356 members voted against the reforms, and only 1,393 voted in favor. Votes are weighted based on capacity, and with private names representing only 36% of capacity their resistance was a symbolic gesture. However, the ALM notes that to actually change the Lloyd’s Act requires voting based on a “one member-one vote” system and so any such changes could be opposed by private capital.
In fact, the ALM did not object to many of the reforms, including the proposed new “franchise board” system for the market. However, ALM chairman Michael Deeny says that the real concern is a change to the Lloyd’s Act that would signal an end to the market’s regulatory board and its director, which the ALM says could threaten the protection of members’ investments.
“We would hope that the Council will use the Franchise Board to improve the profitability of Lloyd’s, but will reconsider the more controversial proposals, such as a new Lloyd’s Act. The ALM will make no further comment on these issues for the time being and will have a series of meetings with Lloyd’s to seek a constructive and united way forward,” says Deeny.

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