Lloyd's Head Pushes Reform Plan
NU Online News Service, Sept. 6, 11:57 a.m. EST?Speaking this morning to the Association of Lloyd's Members, Lloyd's Chairman Sax Riley urged the group to vote their approval of a proposed reform package for the 300-year-old insurance market.
Balloting on the modernization plan is due next week. Earlier this week, the ALM, while backing the proposed franchise system for Lloyd's, announced that it would oppose the overall reform plan as it stands.
The ALM–representing private capital providers at Lloyd's, both limited and unlimited liability members–cited a number of points that it found unacceptable in the reform plan.
Mr. Riley spoke of his desire to make Lloyd's a "strong, healthy business," operating to the highest possible standards. He outlined how the reforms would allow Lloyd's to evolve into a strongly regulated, well-managed and profitable market fit for the 21st century.
"We have undertaken a long and thorough consultation process," he said. "During the course of that consultation, we have listened to your views and we have made changes to the proposals to reflect your concerns. Lloyd's has demonstrated that it is prepared to listen and respond."
However, he added that "now is not the time for protest votes and disunity. Now is the time to seize the moment and vote to implement the solutions we have devised, and for which there is already broad support, both inside and outside Lloyd's."
He concluded that "your best interests, and the best interests of Lloyd's as a whole, are one and the same?consistent profitability. And if that is what you seek, then you must vote for these reforms. I urge each of you to do so."
The ALM had complained about several parts of the reform plan, which led the group to recommend to its members that they vote against the proposal.
An oversight of the proposals, according to Michael Deeny, chairman of the ALM, is the "failure of Lloyd's" to address a major cause of substantial claims against the Lloyd's Central Fund, caused by subsidiaries of international corporate capital members.
Mr. Deeny said ALM also opposes the plan by Lloyd's revisit the one-member, one-vote provisions of the Lloyd's Act governing the market. He said another problem with the Lloyd's proposals is that there is a plan to abolish both the Lloyd's market board and the Lloyd's regulatory board, in favor of creating a franchise board.
On Sept. 12, an "extraordinary general meeting" will be held to discuss the resolution to approve the proposals. Votes will be weighted according to members' capacity levels, giving the views of corporate members an edge.
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