Lloyd’s Offers Plans to Settle PCW Scandal

Lloyd’s of London said Thursday that it plans to raise $218 million to meet claims by investors in its PCW insurance underwriting syndicates in a bid to end one of London’s biggest financial scandals since World War II.

Lloyd’s has taken nearly five years to find a solution to the affair surrounding PCW, whose former management embezzled $62.4 million from some of the richest people in Britain.

At a press conference Thursday, Lloyd’s Chairman Peter N. Miller strongly urged 3,000 PCW members to accept the offer, which would meet part of the $376 million in claims they face following the fraud.

The members have until May 30 to accept the offer. , which would involve a $164-million payment by Lloyd’s and some of its underwriters in exchange for a $54-million contribution from members, Miller said.

Lengthy Litigation Possible

Under the offer, which requires 90% acceptance, Lloyd’s would take over all the members’ future obligations connected with the PCW syndicates, and the members in turn would agree not to pursue the matter in court.

Miller said rejection of the offer would lead to lengthy court litigation.

He said the offer does not imply that Lloyd’s accepted responsibility for the affair, uncovered in late autumn 1982, when “it became quite clear that (PCW agency founder) Peter Cameron Webb and (his partner) Peter Dixon had perpetrated theft upon members.”

In the scheme, non-working underwriting members, including British author-politician Jefferey?checking spelling Archer and Saudi financier Adnan Khashoggi were defrauded of millions of dollars.

Part of the sum involved was subsequently recovered and repaid to members, but Cameron Webb and Dixon left the affairs of PCW syndicates “in a state of chaos which led to a sharp deterioration of their underwriting results,” Miller said.

Sedgwick Contributes

Webb and Dixon were fined by a Lloyd’s disciplinary committee and expelled from membership.