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More darkness at Lloyd's

Saturday 12 March 1994 19:02 EST
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NEARLY 2,500 Lloyd's of London Names, individuals whose assets back the Lloyd's insurance market, have been sent letters warning of imminent bankruptcy proceedings unless overdue syndicate losses are met immediately.

More than 5,000 Names have failed to meet their debts to policy-holders, according to recent figures from Lloyd's. There are also suggestions that Lloyd's may have difficulty meeting the Department of Trade and Industry's statutory solvency requirements for insurance businesses.

The letters appear to have been prompted by last month's rejection by Names of a market-wide out-of-court settlement. Lloyd's had offered hard-hit Names pounds 900m in return for their agreement to halt legal action against Lloyd's managing and members' agents over the pounds 5bn of losses that have hit the market in recent years.

The letters demanded that Names either apply to the Members' Hardship Committee or contact Lloyd's Financial Review Department.

It says: 'Lloyd's can and does take legal action to secure Names' indebtedness to policy- holders. Where Names do not respond to our letters there would be no alternative but to issue writs in order to obtain payment, with the result that bankruptcy proceedings might ensue.'

(Photograph omitted)

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