Another U.S. Judge Dismisses Suit Over Lloyd’s of London : Insurance: District Court in San Diego says 574 American investors claiming fraud had agreed to settle disputes in Britain.

A federal judge in San Diego has dismissed a lawsuit by 574 American investors in Lloyd’s of London who claim they were defrauded of millions of dollars by the 307-year-old insurance organization.

The dismissal by Judge Irma Gonzales of U.S. District Court in San Diego is another setback for Lloyd’s investors, called Names, who are battling to have their complaints heard in the United States rather than England.

Gonzales, like judges in three previous federal cases, ruled that the investors are bound by a “forum selection clause” in their Lloyd’s contracts, under which they agreed that any disputes would be settled in British courts.

Richard D. Rosenblatt of Rancho Santa Fe, Calif., chairman of the American Names Assn., a group of U.S. investors that brought the San Diego action, said Tuesday that the dismissal will be appealed to the U.S. 9th Circuit Court of Appeals in Los Angeles.

Rosenblatt said that he had long expected the case to land in appeals court regardless of which side won at the District Court level.

Lloyd’s, in a statement Tuesday, said the San Diego plaintiffs had “merely recycled” arguments that have already been rejected by federal appeals courts in New York, Chicago and Denver.

Lloyd’s predicted a similar fate for a case now on appeal in the U.S. 6th Circuit Court of Appeals in Cincinnati.

The dissident Names contend that Lloyd’s and its representatives gulled them into investing without disclosing what was already known: that Lloyd’s faced staggering losses from natural disasters, industrial pollution and asbestos disease among American factory workers.

Lloyd’s investors are mainly wealthy individuals who back up Lloyd’s insurance policies by pledging unlimited personal liability for claims losses.

When the business is profitable, the Names share in the profits, but when it turns down as it has in recent years, entire fortunes can be wiped out.

Lloyd’s has announced $12.3 billion in losses for the years 1988 through 1991 and is expected to disclose an additional loss of more than $2 billion loss for 1992, its most recently completed accounting year.

The world’s oldest insurance market could face extinction if it fails to pass an annual solvency test by British regulators later this year.

Chatset, a British firm of insurance industry analysts, said that Lloyd’s faces a cash crisis that might require it to get a loan from the Bank of England or put an additional levy on the Names.

Lloyd’s Chairman David Rowland denied that the market is in talks with the central bank and said that its insurance business is solvent.

In addition to the San Diego lawsuits, the American Names Assn. has filed complaints against Lloyd’s in several states, alleging violation of securities regulations.