Lloyd’s of London Ready for Reform

Lloyd’s of London said it plans an overhaul that could spell the end of the three-centuries-old insurance market’s tradition of attracting the wealthy to invest money and assume total liability for claims.

Lloyd’s backed proposals that force all investors in Lloyd’s to have limited liability, meaning the individual investors, known as “names,” will need to become companies by 2005.

The plan now has to be approved by members later this year.

Lloyd’s, which was founded in the 1680s and almost collapsed in the early 1990s, aims to increase scrutiny of the business and also plans to reform its bookkeeping as the unprofitable market tries to get more corporate members.

Companies, which now put up 80% of Lloyd’s capital, favor the package.