Agency Agreements (Amendment No. ?) Byelaw (No. 1 of 1994, 5 January 1994).

Daily Telegraph: Lloyd's ‘withheld asbestosis facts'

CRUCIAL evidence about asbestosis related losses was withheld from Lloyd's of London's settlement process, claim loss-hit Names.

More than 17,000 members are pursuing allegations of negligence against their agents. Lloyd's sought to avoid costly litigation by making settlement offers to members, based on a legal panel's estimates of court awards.

But members facing claims for asbestosis allege Lloyd's withheld crucial evidence about their case from the panel. Chris Messer, Chairman of one members' action group, says the evidence is contained in minutes of a February 1982 meeting of auditors with Ken Randall, then Lloyd's audit manager.

The auditors are understood to have called the meeting to express grave concern about asbestosis reserves for the 1979 accounting year and warned some syndicates held inadequate reserves. The auditors claimed if proper reserves were made the market would be effectively bankrupt.

As a syndicate may not close an account with inadequate reserves, they said badly hit syndicates should leave the 1979 account open.

All but one of the 404 syndicates accounts were closed and the market declared a £229m profit for the year. Members allege some accounts were closed improperly and 1980 members inherited liabilities for which reserves were inadequate.

A Lloyd's spokesman said: "We offered the minutes under terms of strict confidentiality, but the legal panel did not wish to see any submission not made available to all parties."

• Sturge action group leader John Rew has written to Lloyd's saying members should be made aware of serious errors on its database before deciding on Lloyd's £900m settlement offer.

Mr. Paul Marland (Gloucestershire, West)

"the advancement and protection of the interests of the members of the Society."

Mr. David Jamieson (Plymouth, Devonport)

What a laugh.

How did Lloyd's, free from ally obligations under the Financial Services Act 1986 and from any duty of care, exploit its investors by insider dealing? There are many ways in which it did so, but I will explain just three.

First, there were baby syndicates. That was a device whereby a few insider - usually underwriters, agency directors and their families - got together to form a small syndicate that skinned the cream off the business going into the main syndicate run by that agency. That favoured group sliced off the best business and, when necessary, reinsured itself into the main syndicate under its control. That ensured that when there were profits, the baby syndicate fared handsomely - and when there were losses, they were picked up by others. It was a win and no lose situation. I may add that I was never a member of a baby syndicate.

The second way in which insiders favour' themselves is by churning the market and fleecing external investors. The House will be aware that churning is illegal on the stock exchange, but not at Lloyd's under self-regulation. Lloyd's professionals make money out of commission, which is usually paid at the rate of 10 per cent. each time business changes hands. Business changing hands can be simply a matter of the broker moving from one box to the next. When some Lloyd's brokers wanted to increase their earnings, they simply passed the parcel within the business and helped themselves to the commission - which in some cases they shared with the underwriters.

When, however; the risk had been split up, rebundled and passed on 20 times, all the premium income had gone in commission In many cases, so vague were the details of what was in the bundle of risk that some underwriters ended up reinsuring themselves - [Laughter] I agree that is ludicrous. Proof of that activity emerged after the Piper Alpha disaster. A claim of $750 million gave rise to the movement of $15 billion within the insurance market. The money moved was 20 times the value of the claim. No money was left to pay out - no insurance premiums were left. The insiders at Lloyd's simply turned to the names and said, "Pay up"- and it should be remembered that names are liable down to their cufflinks.

Instead of stopping that churning, Lloyd's committee - the regulators - participated as can be seen from the results of the syndicates run by those legislating at Lloyd's. Two thirds of the London market of excess loss money - more than £600 million in 1989 - went to the syndicates managed by council members. The Merrett syndicates removed £256 million from the spiral in 1989; the Murray Lawrence syndicates removed £134 million; and the Sturge syndicates removed £120 million - as well as taking vast salaries from the markets.

All of that was done while Lloyd's names were forced to sell their houses. Some regulation that was - some duty of care.

The third way in which the Lloyd's insiders abused their professional knowledge is perhaps the most pernicious of all. In the mid-1980s, Lloyd's agents actively recruited, and were encouraged by the Lloyd's council to recruit, unwitting names, which the regulator allowed to be recruited, on to syndicates already known to be heavily tainted with pollution and asbestosis claims, so that the new recruits were there to be fleeced when they were needed

Evidence of that practice and of the magnitude of claims has recently emerged in the minutes of an auditors meeting in February 1982 with Ken Randall, who was then Lloyd's audit manager. The auditors were understood to have called the meeting to express grave concern about asbestosis reserves for the 1979 accounting year and warned that some syndicates held inadequate reserves The auditors claimed that if proper reserves were made the market would effectively be bankrupt.

As a syndicate may not close an account with inadequate reserves, the auditors said that badly hit syndicates should leave tile 1979 account open. What happened? I can see that you are curious, Mr. Deputy Speaker. All hut one of 404 syndicate accounts closed and the market declared a false £229 million profit for the year. It is alleged that some accounts were closed improperly and that the 1980 members inherited liabilities for which reserves were inadequate and that those liabilities were concealed from them by lack of disclosure.

Nevertheless, the 1980 names were enrolled in droves with the promise to clean up at Lloyd's after the Lloyd's Act 1982 and many existing names were persuaded to increase their capacity.

At more or less the same time, the show of wealth required to join Lloyd's was reduced to £37,500 - not the £250,000 of which we hear talk.

From Lloyd's point of view, that exercise was a great success because from 1983 to 1988, Lloyd's capacity doubled to £14 billion - growth rate of 15 per cent. compared with an annual growth rate of 3 per cent. between 1967 and 1983.

Mr. Paul Flynn (Newport, West)

Sir Richard Body (Holland with Boston):

No Members of tile House were members of the baby syndicates.

Imagine the horror of the names who had been fleeced when they learned that Mr. Robert Hiscox, the deputy chairman of Lloyd's, had said when referring to Lloyd's names:

In order that there shall be no misunderstanding, I will repeat that. The deputy chairman of Lloyd's said of his investors:

That is backed up by another member of the Lloyd's regulatory body, whose identity I know, but I am not sure of the quote and therefore I shall not accredit it to him. He was beard to say, in effect, "If we find a mug, we use him." That is the way in which the Lloyd's regulatory authority refers to its investors. There is not much duty of care there

Dame Elaine Kellett-Bowman (Lancaster).

I should be happy to repeat it but the quotation from Mr. Robert Hiscox is on the record. I am sorry that my hon. Friend thinks this is nor on the public record: it is all on record - it is in all the newspapers. I can produce chapter and verse for all that I have said, and I can back up what I am going to say to show just how disgraceful are the goings on at Lloyd's.

The Lloyd's hierarchy put it about that they do not make people bankrupt. In the recent past, Lloyd's has made 169 people bankrupt - except those whom it has forced into independent voluntary arrangements - and has levelled similar threats at a further 3,500.

What is so misleading about the statement, "We do not people bankrupt", is the fact that the banks do it for Lloyd's, through the bank guarantee offered to Lloyd's as security by those who struggle to qualify. Lloyd's then calls the guarantee; the bank then asks the Lloyd's investor how he will service the borrowings, and if he cannot do so the hank makes him bankrupt.

I suppose that, strictly speaking, it is true that Lloyd's does not make people bankrupt: but, to quote Lord Armstrong , that is being very economical with the truth. The horror continues when we realise that the regulators at Lloyd's have been fiddling the unregulated system, and that until very recently the chairman of Lloyd's and the Lloyd's regulator was one and the same person. Lloyd's investors are not shrinking violets: they have been to court and secured a judgment in their favour about duty of care. But can you believe it? Lloyd's appealed. It was in the Court of Appeal that the negligence of the Lloyd's regulator was clearly exposed. No less a person than Sir Thomas Bingham, Master of the Rolls - sitting with Lord Justice Hoffman and Lord Justice Henry on 13 December 1993 - made the following statement:

Sir Thomas then threw out the Lloyd's appeal against the duty of care.

It is greatly to the credit of my right hon. Friend the Member for Wokingham (Mr. Redwood) that, when he was a Minister at the Department of Trade and Industry he saw and understood what was going on at Lloyd's and appointed Sir David Walker - then chairman of the Securities and Investments Board investigate what was going on. The chairman of Lloyd's tried to convince the world that be had appointed Sir David Walker to investigate, but that simply was not true.

What did Sir David find? He found that Lloyd's had kept no records. He had to design his own computer system to find out what had been going on there, despite the Boydell undertaking given to the House in July 1981 that within two years Lloyd's would adopt true and fair accounting practices. Twelve years later, Sir David found that Lloyd's had done nothing. It had no measurement of risk against premium; the Lloyd's professionals were doing substantially better than the external investors. The LMX underwriters, he found, were considered a "soft touch", and the regulator had done nothing about it. On the contrary - the regulators were helping themselves to the funds as I have already mentioned.

Sir David found that there was little consideration of duty of care by Lloyd's insiders in regard to names interests. It will come as no surprise that a majority of names are either in litigation, or threatening litigation, against the Lloyd's professionals, and that the Serious Fraud Office is investigating the activities of Mr. Anthony Gooda and Mr. Derek Walker while they ran Gooda-Walker, now one of the most notorious agencies at Lloyd's.

Mr. Peter Hain (Neath)

The hon. Gentleman is describing a massive case of not merely insider dealing but corruption on a grand stale. As he has demonstrated very eloquently, insider names - underwriters and managing agents - have protected themselves and dumped all the losses on external names. The question that he and, surely, the Government Front Bench must answer is this: why did the Government not institute a proper inquiry into Lloyd's to ensure that this corruption, fraud, mismanagement and insider dealing was rooted out and the culprits prosecuted?

I believe that it will surprise you, Mr. Deputy Speaker, when I tell you that so far mote than 30 Lloyd's investors have killed themselves or died early as a direct result of their Lloyd's losses and Lloyd's attitude towards them

Sir Gerard Vaughan (Reading, East)

I, too, am a name at Lloyd's, although I have never taken part in or been involved in any baby syndicate. My hon. Friend is expressing a clear argument. Does he agree that the conclusion is that insider dealing and other financial manipulations are rife within Lloyd's and that the whole system of self-regulation in Lloyd's and other parts of the financial market has failed? It is totally unreasonable to expect the self-interested to be self-regulating. It is time that not only Lloyd's but the over parts of the market which do not come under the Financial Services Act 1986 were brought within the Act.

Does my hon. Friend agree that the House was deceived by Lloyd's when we considered the Lloyd's Bill.? When some of us, on both sides of the House, queried whether Lloyd's should be regulated from outside, massive arguments and much persuasion were used to dissuade us from any regulation. We were deceived factually.

I agree with that. That is another helpful intervention. The proof of that is the fact that the Boydell undertaking which was given in 1981 was never implemented. Twelve years later, Sir David Walker went back to investigate Lloyd's and found that nothing had happened. It had said that within two years it would tidy up its act.

That is a valid point and perhaps it should be discussed at a later date. There is no doubt that a great deal of elbow clutching went on in the House during the early 1980s when the Bill went through. We were told, "Don't worry old boy, it will all be all right. Would you like to come and have lunch with the chairman?" Many of us were put through that treatment

I want to return to the 30 people who killed themselves or died early as a result of Lloyd's losses. Mr. Harold Weston, a 51-year-old solicitor, hanged himself from the banisters of his home in north west London. Several others have hanged themselves. Some have shot themselves and others have gassed themselves in their cars. I will spare the House the gruesome details, but my hon. Friend the Member for Lancaster Dame E Kellett-Bowman) will be reassured to know that they have all been written up and reported in the newspapers

There were two further suicides in Canada, which Peter Middleton, Lloyd's chief executive, admitted were as a direct result of their Lloyd's losses.

Sunday Times: Lloyd's plans float for syndicates

As Lloyd's braced itself for a month of yet more bad news, details are emerging of an ambitious management plan that could see insurance syndicates floated on the stock market.

The moves comes as Lloyd's faces rejection of its financial settlement with litigating names and details of bumper underwriting losses from 1991.

Lloyd's proposed £900m settlement with 17,000 loss-making names will be in jeopardy this week if members of the largest litigating groups - Gooda Walker and Feltrim - take their executives' advice and turn down the offer. Between them, they have enough voting power to secure its rejection.

In a worse-case scenario, some names' representatives fear the offer's failure could lead to a levy on the membership, or even threaten the solvency of Lloyd's and require the Department of Trade and Industry to intervene. However, Peter Middleton, Lloyd's chief executive, denies either scenario is likely.

Further disappointment will arise next month with the emergence of 1991's trading performance. Lloyd's has already forecast the 1991 deficit will be more than £1 billion.

Despite the bad news, management is developing a controversial plan to end the free-for-all trading of insurance business between insiders, a 300-year old tradition at Lloyd's. In its place, syndicates or groups of syndicates could be floated on the London Stock Exchange, with investors taking a view on their prospects depending on the business each one underwrites. Other plans include replacing the three-year accounting period with annual accounting, beefing up the market's regulatory body, licensing the Lloyd's name, and living off non-core services such as computer programming.

These ideas discussed by Lloyd's management at a brain-storming session last weekend, will be in an internal report to be finished in two months. Traditionalists will be outraged by the plan which virtually removes any role for the members' agents, who have traditionally controlled access to Lloyd's. They will have the opportunity to oppose the proposals in a vote.

"Investors in Lloyd's will be given more control over their capital and have a value placed on their membership," said Middleton yesterday.

His colleague, Robert Hiscox, Lloyd's deputy chairman, added: "The first step was introducing corporate capital, now innovation is more acceptable at Lloyd's."

Sunday Telegraph: Names face court battles with Lloyd's

LLOYD'S of London underwriters warned yesterday that loss-stricken Names rejecting Lloyd's £900 million offer would face a tough legal fight. After two key votes last week, the offer is virtually dead

Names, facing cumulative losses of £2. 8 billion, must now prepare to sue members' agents who put them onto the big losing syndicates. The Names hope legal action will enable them to tap the agents' errors and omissions cover, rumoured to be £1. 1 billion.

But leading E & 0 underwriter Brian Smith said: "We will appeal against each judgement. Some Names may get something if they move early enough. Others will get nothing." Litigation costs are already estimated to exceed £100 million and will be deducted from any payments underwriters make.

"Our reinsurers will pay £400 million but no more." said another E & 0 underwriter. Lloyd's chairman David Rowland has stressed there is no more money in Lime Street's kitty.

Syndicate members have until February 14 to reply to the Lloyd's offer, which would give them on average 30p in the pound or less for their past losses.

But two meetings of syndicate action groups last week sealed the fate of the settlement. On Monday. Gooda Walker Names, who face losses of more than £1 billion, voted by 1,563 to 300 to reject their settlement. worth £220 million. On Friday, 770 Feltrim syndicate Names voted by 11 to one to refuse their £237 million Lloyd's offer.

The offer was made to each Name individually. But it was made conditional on winning a satisfactory level of acceptances.

Lloyd's has indicated this means 70 per cent or more accepting, not by number of Names but by the value of their commitments. The Feltrim and Gooda Walker votes make it impossible for acceptances to reach anything like 70 per cent.

The legal process will start soon. Barrister Gordon Apsion, of the Lloyd's Overseas Names Group, is considering suing Lloyd's itself on February 18 for allegedly failing to disclose a key report in the early 1980s. This spelt out the insurance implications of asbestosis, one of the biggest causes of syndicate losses.

His and other Names groups are planning to sue syndicate auditors, including Ernst & Young, Coopers & Lybrand and Neville Russell. Auditors' E & 0 cover is mostly placed in the company market. Names on Cuthbert Heath syndicates facing losses of more than 300 per cent will vote on legal action soon.

A further group of Names is meeting Lloyd's officials tomorrow to protest at the enfranchisement of corporate investors.

Elsewhere, there is mounting fury that members agents have only in the last few days passed on a warning letter sent last October from stop-loss specialist Holman Wade. This said that its policies would not cover losses caused by paying a levy to set up Newco, the company that will handle pre-1985 "long-tail" claims.

• Insurers counting the cost of pollution claims are now waking up to the risk that the processes used in Britain to clean contaminated sites may in themselves provoke claims. Environmental consultant Anthony Matthews said processes using clay coagulates could produce silicosis and cancer. Broker Willis Corroon said it knew of at least one potential claim of more than £100 million.

Sunday Telegraph: My week by Mary Archer

Annual Meeting of the Institute of London Underwriters: Statement by the Chairman, Mr P L Evans

As you will be aware, membership of the Institute was further reduced during 1993. Eighteen companies gave notice of their intention to withdraw. As you can see from the annual report, at January 1, 1994, the members totalled 74. Many of the companies not going forward were transacting only small volumes of business and the increasing expense burden clearly called into question their economic viability. Others were subsidiary companies within groups whose portfolios have been assumed by a larger main entity within the same group.

Hobbs said that it is clear that the market is under reserved in some respects. The present system of setting minimum percentage reserves has operated since 1983. The DTI has set MP's with Lloyd's and the Government Actuaries Department. In previous forms the DTI has been involved with setting reserves requirements for Lloyd's since 1950. In attempting to resolve the problem of under reserving, the DTI has allowed "stair stepping", i.e. The gradual increase in reserves over a period of years;

Mail on Sunday: Britannia crew health test call

A call for all ex-crew of the Royal yacht Britannia to have medical tests has been made by Portsmouth MP Peter Griffiths.

The Mail on Sunday told last week how a retired Britannia stoker died from an asbestos-related disease.

A M Best & Co:

The insurance rating concern, stated there's more bad news on the horizon for property and casualty insurers, stemming from underwriting of years' past. The rating concern said the insurers, over the next 25 years, will face environmental and asbestos claims with a value, in today's dollars of U.S. $132bn. But those insurers have so far reserved or paid just U.S. $15bn in claims. As a result, "you're going to have substantial earnings drain and capital depreciation" for the 50 or so insurers who wrote most of the insurance at companies facing the liabilities, said John Snyder, an A M Best Senior vice-president. Mr Snyder said possible Superfund reform might lessen the costs and streamlining cleanup processes.

Wall Street Journal: Insurers' losses on catastrophes reach $7 billion

NEW YORK - Insurance losses from winter storms, the Los Angeles earthquake and other catastrophes are expected to exceed $7 billion for the first quarter of 1994, one of the worst periods ever for the nation's property and casualty insurers.

The latest catastrophe claim estimates overshadow a report issued yesterday showing that the insurers posted net income $18.5 billion last year, more than three times the $5.8 billion net income in the catastrophe-ridden year of 1992, according to the Insurance Services Office Inc. and the National Association of Independent Insurers.

The $7 billion estimate does not include a string of tornadoes that hit four Southern states over the weekend.

Sean Mooney, senior vice president of the Insurance Information Institute, said, "From an insurance point of view, this will be the worst winter on record."

In contrast, in the full year 1993, losses from catastrophes totalled just $5.7 billion. In 1992, the nation's worst year for catastrophes, insurers posted $23 billion in catastrophe losses, and the second-worst year, 1989, left them with $7.6 billion in disaster red ink.

"It's a little bit of calm between storms," Mr. Mooney said of the 1993 figures, which are estimated to represent 96% of the country's property and casualty insurance business. "We're obviously very concerned about 1994."

While the tornadoes quickly met the $5 million, 1,000-claim threshold in insured property losses to be declared a catastrophe, damage estimates are not expected for several days, according to the American Insurance Services Group, a trade group and official scorekeeper for disaster claims.

For 1993, the two insurance-trade groups found that the industry's underwriting loss dropped to $18.7 billion from $36 billion, a decline mainly explained by fewer catastrophes. Among 1993's worst disasters was a blizzard that edged up the East Coast, while 1992 gave the industry two major hurricanes, including the $16.5 billion Andrew.

In addition to higher claim losses, analysts say that the insurance companies could earn less income on their investments this year if the bond market continues to perform poorly.

The trade groups said that property and casualty insurers had pre-tax operating profit of $13.2 billion in 1993, exclusive of realised capital gains, a sharp improvement over 1992's loss of $2.5 billion. The underwriting loss was 8% of earned premiums of $234.9 billion, down from the 15.9% of earned premiums of £226 billion for 1992.

In the fourth quarter of 1993, the industry's consolidated net income was $5.9 billion, against a net loss of $1.2 billion a year earlier. But the $8 billion of net investment income in the fourth quarter of 1993 was down 4.3% from $8.9 billion a year earlier.

Meanwhile, A.M. Best Co., the insurance rating concern, said there's more bad news on the horizon for property and casualty insurers, stemming from underwriting of years past. Yesterday, the rating concern said the insurers, over the next 25 years, will face environmental and asbestos claims with a value, in today's dollars of $132 billion.

But those insurers have so far reserved or paid just $15 billion in claims. As a result, "you're going to have substantial earnings drain and capital depreciation" for the 50 or so insurers who wrote most of the insurance at companies facing the liabilities, said John Snyder, an A.M. Best senior vice president. Mr. Snyder said possible Superfund reform might lessen the cost to insurers by curtailing litigation costs and streamlining cleanup processes.

Sunday Express: Rottweiler turns on Lloyd's

Daily Telegraph: Letter to the Editor - Lady Archer of Weston-Super-Mare - Lloyd's must carry on

Amid the media furore currently surrounding Lloyd's, one fact seems to have escaped attention: all the problems aired relate to the past. That Lloyd's is not only radically reforming itself, but also successfully trading on is neglected by those who seem to want it to fail. Thus do observers incline to Adam Raphael's "meltdown" scenario rather than to his "march on" alternative (articles, April 26 and 27

However every informed person within the Society - whether among working or external members, Corporation staff or those concerned with Lloyd's governance - strongly believes that Lloyd's will survive, and they are now making tremendous efforts to achieve that end

The "meltdown" proposition is that American long-tail claims will overwhelm any future profits at Lloyd's. Certainly if Lloyd's allowed managing agents to continue to handle old-year claims as 550 separate problems, severe difficulties would persist, but NewCo and the new Special Claims Unit put in place to handle old-year business will be able to settle these much more effectively.

Old years apart, the timbers of the Lloyd's business plan have been laid. There is a new approach to regulation to professional standards, to simplifying structures, to cutting costs and strengthening members' rights. Critics of the Society should acknowledge this progress to avoid the charge of obsolescence

Regrettably, there are those who have been gravely damaged by their encounter with the market. Many are now seeking redress from the courts an uncertain alternative to the settlement offer rejected earlier this year. Those who do not wish to continue the confrontation, but rather to obtain finality with respect to their underwriting affairs, are approaching my hardship committee, which is now concluding many private arrangements.

New York Herald: Grace restores reserves for asbestos claims

W.R. Grace & Co. said it is setting aside $200 million in earnings to cover potential asbestos-claims pay-outs stemming from a recent federal court ruling.

The action restores to its original size a fund first set aside eight months ago by the Boca Raton-based company. In September, Grace had reacted to an unfavourable court ruling by setting up a $300 million reserve. But when the U.S. Court of Appeals in New York said in January it would reconsider its decision, Grace put $200 million back in its profit kitty.

The federal appeals court upheld its earlier decision that Grace's liability begins with the date of asbestos installation, not when the damage from asbestos was discovered. The company said it will appeal.

In its latest filing with the Securities and Exchange Commission, Grace estimated its maximum liability in asbestos cases at $1.17 billion. Grace made asbestos fireproofing material and acoustical plaster from 1963 to 1973, but has faced a mounting number of health-claims lawsuits from asbestosis victims ever since.

Grace has had to file suit against insurance companies unwilling to live up to its coverage. At Grace's annual meeting last week, chief executive J.P. Bolduc said the company is settling as many cases as it can out of court.

New York Herald:

W.R. Grace & Co. said Tuesday it is setting aside $200 million in earnings to cover potential asbestos-claims pay-outs stemming from a recent federal court ruling.

The action restores to its original size a fund first set aside eight months ago by the Boca Raton-based company. In September, Grace had reacted to an unfavourable court ruling by setting up a $300 million reserve. But when the U.S. Court of Appeals in New York said in January it would reconsider its decision, Grace put $200 million back in its profit kitty.

The federal appeals court upheld its earlier decision that Grace's liability begins with the date of asbestos installation, not when the damage from asbestos was discovered. The company said it will appeal.

In its latest filing with the Securities and Exchange Commission, Grace estimated its maximum liability in asbestos cases at $1.17 billion. Grace made asbestos fireproofing material and acoustical plaster from 1963 to 1973, but has faced a mounting number of health-claims lawsuits from asbestosis victims ever since.

Grace has had to file suit against insurance companies unwilling to live up to its coverage. At Grace's annual meeting last week, chief executive J.P. Bolduc said the company is settling as many cases as it can out of court.

Daily Telegraph: Gooda agent ‘told to suppress losses'

ON the ninth day of the case of the Gooda Walker Names against their Lloyd's of London agents yesterday, Anthony Willard, a former Gooda Walker underwriter said that fellow directors pressured him to suppress information about losses on his syndicate, 299.

Mr Willard, a witness for the agents, was being cross examined by Geoffrey Vos QC, for the Names, in Court 36 on the Strand. He said: "I was taking considerable stick from some fellow directors, who suggested that instead of telling the truth I should be keeping quiet. I fought alone trying to get the truth out about Syndicate 299's loss."

Mr Willard told the court that Derek Walker, a fellow underwriter and managing director of the firm that ran the Gooda Walker syndicates, had interfered in the running of Syndicate 299.

Mr Willard said Mr Walker had wanted him to seek out cheaper quotes for his reinsurance programme, but he did not want to.

Mr Willard replied: "I was in a pretty poor state about everything. I was trying desperately to save money somehow. I was under pressure."

Mr Willard said Mr Walker had tried to persuade him that "one way of getting some premium income into 299 would be for it to write a reinsurance for 164, a non-marine syndicate." Mr Willard said the policy would be worth £1m and the premium would be £1m. He explained, "effectively I would have the use of the £1 m until such time as I had to pay it back."

Mr Willard said he told Mr Walker that he would have to report the transaction to his auditors and added: "Mr Walker said, "surely Tony you do not tell your auditors everything do you?" Mr Willard said he refused to take part in the transaction and within two days was informed the firm was seeking a replacement for him.

Mr Willard said Anthony Gooda, w ho ran the members agency, asked him to write to Names on the syndicate, "an optimistic upbeat letter saying how much better things would be." He wrote it, but Mr Gooda told him "it was not optimistic enough."

Annual General Meeting of Members of Lloyd's:

No One Lime Street: Accurate accounting

Daily Telegraph: Ruling loses Heath A. $50m

The Grosvenor House Hotel: Seminar on Schemes of Arrangement, Commutations and Run-Offs.

Evening Standard: Court setback for Lloyd's Names

The court of Appeal today found against a group of Lloyd's Names in a move that could have major implications for actions worth hundreds of millions of pounds being brought against underwriters of the insurance society.

The cases, between the Outhwaite agency and the 1992 Outhwaite Names Association, centred on whether litigation can be brought on actions that happened many years ago, even if those actions were subsequently concealed by their perpetrators.

English law maintains that proceedings have to start within six years of acts of negligence occurring.

But the Names say these acts were concealed and they did not become clear until losses started flooding through in the past five years. As soon as they did, action groups formed and litigation proceedings began.

But today, Kevin Ryan, acting for the Outhwaite agency through solicitors Denton Hall, said: "The Appeal Court ruled that if a cause of action has arisen and there is a subsequent fraudulent concealment, that does not stop limitation time running from the time when the cause of action arose unless the fraudulent concealment happened at about the same time."

The ruling, in which two judges found for the Outhwaite agency and one against, could mean that actions in which Lloyd's agents did not immediately conceal underwriting commitments may be proved invalid.

Lloyd's action groups said Outhwaite case was a one-off because most Names fought their pitch years ago. It is therefore hard for the 1992 group of Names to claim that concealment occurred.

Solicitors involved in the case say it centres purely on the point of law, not on whether concealment did or did not take place.

Washington Post: Attention – Individuals exposed to asbestos or asbestos-containing products (Their spouses, household members or legal representatives) and individuals or entities which may be sued by those exposed to asbestos-containing products

2.) The Global Third-Party Claimant Class includes all persons or entities who now have, or in the future may have, any claim for contribution or indemnity or other third-party claim's alleging that Fibreboard or certain of its related entities, or Continental Casualty Company., CNA Casualty Company of California, Columbia Casualty Company or Pacific Indemnity Company (collectively. the "Insurers") is or may be liable for all or part of an asbestos-related personal injury claim of a Global Health Claimant Class member.

Lloyd's Solicitors Dept: Re Byelaws

Lloyd's List: US concern over Superfund Delays

Substantial concern has arisen over the cost and slow rate of clean-ups at hazardous waste sites, the US General Accounting Office (GAO) has concluded after a 16 month investigation of the Superfund programme.

Meanwhile, GAO found that Superfund clean-up work as at 30 September 1993 had been completed for only 52 hazardous waste sites. However, significant progress had been made in moving about half of the 1,320 Superfund sites beyond the initial study phase into the design and construction phases of clean-up.

Yet GAO said that 150, or 18% of the sites in the Superfund programme for at least eight years had not progressed beyond the initial study phase, and even that phase had not begun at nine sites placed on the National Priorities List (NPL) before 1987.

Among the findings, GAO noted that in the financial years 1987 - 1993 some 60% of the $10bn obligated to the Superfund scheme went to the contractors performing site clean-ups. The largest portion of clean-up spending was for remedial or long term activities including site studies, remedial designs, and construction of the cleanup remedy.

EPA had concentrated a large portion of the Superfund remedial-action budget on cleaning up a very small number of sites. In financial years 1987 - 1993, for example EPA obligated $1-1bn, or more than 40% of the $2-6bn obligated to construct cleanup remedies at 13 sites - or about 7% of the more than 200 sites that were funded during this period.

Lloyd's List: US Liabilities cast a long Shadow

Currently there are about 1,300 sites on the Environmental Protection Agency (EPA) priority list, and the EPA expect the total to reach 2.100 by the year 2,000. Overall more than 36,000 hazardous waste sites have been identified by the EPA, which estimates the average cost to clean up a site is $31.5m.

By January 1994 clean-up had finished at 218 sites. By the end of 1992 potentially responsible parties (PRP's) had paid about $7bn in total - cumulative appropriations under Superfund were $9bn by the end of 1991. There are over 26,000 identified PRP's.

Based on a study of 53 large US insurer groups the industry paid $2,184bn in 1990-92 and increased reserves for pollution by $3,645bn. By the end of 1992, reserves were equal to almost seven years payments at the then current level. If the US insurance industry continued to increase its annual reserve additions by 6% each year for 25 years, it could meet the expected cost.

Times: Fraud through concealing information

A person could be guilty of fraud when he dishonestly concealed information from another which he was under a duty to disclose to that other or which that other was entitled to require him to disclose.

The Judicial Committee of the Privy Council [Lord Templeman, Lord Jauncey of Tullichettle, Lord Browne-Wilkinson, Lord Woolf, and Lord Lloyd of Berwick] so stated on October 31 in dismissing an appeal by the appellant, Grant Adams, from the dismissal by the Court of Appeal of New Zealand of his appeal; against his conviction of conspiracy to defraud.

Lord Jauncey said that the appellant had been charged with conspiring with his co-accused to defraud any one or more of Equiticorp Holdings Ltd, its subsidiary companies and others by agreeing to use dishonestly a system of disguising the source and utilisation of moneys from legitimate enquiry by the use of offshore companies and bank accounts and a New Zealand legal firm.

Since a company was entitled to recover from directors secret profits made by them at the company's expense, any dishonest agreement by directors to impede a company in the exercise of its right of recovery would constitute a conspiracy to defraud.

The Times: Reinsurance is insurance business

In re NRG Victory Reinsurance Ltd before Mr Justice Lindsay [Judgment July 27]

Mr Justice Lindsay so held in a reserved judgment in the Chancery Division when giving reasons for having sanctioned on 19 July, on the petition of NRG Victory Reinsurance Ltd, presented to the court on 24 May 1994, under section 49 of the 1982 Act, a scheme for the transfer to Employers Reassurance Ltd of its long term business carried on in the United Kingdom.

At the heart of the ordinary meaning of the word "insurance", which was not precluded by the partial definition thereof in section 95 of the Act, was the notion of securing against pecuniary loss in consideration of a payment proportioned to the risk contemplated and, accordingly, the ordinary meaning of the word included reinsurance

The Financial Times: USG wins court ruling on asbestos claims.

USG, the US manufacturer of building materials which is fighting a large number of asbestos-related claims has won a legal victory which could have implications for the liability of insurers in asbestos cases, writes Richard Waters in New York.

The decision in the Illinois Appeals Court, upheld USG's contention that it should be able to claim against insurance policies on a property from the date that asbestos was first installed not just from the date it was discovered.

This so-called "continuous trigger" test means the company can claim under insurance policies issued between the late 1940's and 1984.

If applied to all outstanding property damage claims against the company over asbestos, the decision could make available up to $600m of insurance cover, USG said.

Eleven insurers are affected directly by the verdict, including Lloyd's of London. A lawyer for Lloyd's said the decision would be appealed to the Illinois Supreme Court.

Lloyd's Solicitors Dept: Re Byelaws

The Times: Lloyd's halts Lloyd's debt collection

LLOYD'S of London was barred from pursuing thousands of names through the courts, to recover debts estimated at up to £3.1 billion, by a Court of Appeal ruling yesterday.

Appealing against an earlier judgment, John Clementson, a name, successfully argued that Lloyd's could be in breach of EC competition rules. The issue of whether a breach has taken place is set to go to full trial. Until a ruling is made, Lloyd's is unable forcibly to collect debts. Granting the appeal, Sir Thomas Bingham, the Master of the Rolls, said he was overturning the original ruling "with diffidence, reluctance and regret". Handing down the judgment, he said: "We know that this affects a very large sum of money and a very large number of names."

Lloyd's is currently trying to recover about £1.1 billion of debts from an estimated 10,000 names. A further £2.4 billion of losses have not yet been demanded.

Mr Clementson's action was supported by the Writs Response Group, which has almost 3,000 members and which hailed the Appeal Court's ruling as the most significant legal victory won by names. Mr Slowe, the group's solicitor, said: "This ruling halts Lloyd's in its tracks. There is no way that it or its rottweiler can progress claims against names."

In the summer, Lloyd's employed the services of Dibb Lupton Broomhead, a firm of solicitors specialising in debt collection. Michael Deeny, the chairman of the Gooda Walker Action Group, said: "Lloyd's debt collectors can now goon holiday for the next 18 months." Alan Porter, the chairman of the Devonshire Names Action Group, said the result ‘would "effectively stop Lloyd's debt collectors from attacking names' assets held outside Lloyd's for the next two years or more".

The court also said that inducements to reinsure risks within the market might also be anti-competitive. Names argue that this process was to blame for the notorious LMX spiral, a web of reinsurance contracts between a handful of Lloyd's syndicates.

The ruling was reached with varying degrees of reticence by the three judges. Lord Justice Steyn said his initial view was that Mr Clementson's argument should fail. "I have, however, been persuaded ... by the judgment of Sir Thomas Bingham that it is not a position that I can maintain. I still consider that Mr Clementson's Community law defences will ultimately fail.

The third judge, Lord Justice Hoffman, drew attention to the fact that Lloyd's had not applied for exemption from EC rules, after repeatedly saying it would.

As soon as yesterday's judgment was announced, Lloyd's started the process of applying to the EC for an exemption. If this is granted, the Lloyd's central fund will be deemed not to be anti-competitive, but only from the time of the application.

The Times: Appeal Court ruling enables Names to take battle to Lloyd's

Richard Slowe, a partner at S J Berwin, solicitors for the Writs Response Group of 3,000 Names who are resisting Lloyd's attempts to force them to pay their insurance market losses, claimed yesterday: "Names can now go on the offensive. The Lloyd's steamroller has stopped." He said Lloyd's must call off the debt collectors, who are currently pursuing more than 10,000 Names. Lloyd's could face a solvency crisis and thousands of Names could for the first time be in a position to sue Lloyd's for damages. Yesterday's ruling overturned a judgment last December by Mr Justice Saville, but the court upheld his view that the contract between Lloyd's and Names implied no duty of care.

The case revolves around Lloyd's central fund, which meets policyholders' insurance claims when Names fail to pay. At the latest count, the £806m central fund was standing in for £1.2 billion of Names' losses, and two months ago Lloyd's stepped up its attempts to recover the money.

Mr Slowe said his advice to Names who receive Lloyd's writs was: "Join the Writs Response Group. Nothing further will happen until this case is decided." He claimed Lloyd's would face serious solvency problems as a result of non-payment and said: "It is clearly in a very difficult position. It's got its rules wrong."

A Lloyd's spokesman conceded the outcome of its proceedings against Names would depend on the resolution of the Writs Response Group case, but added: "It won't take as long as they suggest." He said there was no solvency problem, because "recoveries from Names are contingent assets which will be taken into account for solvency purposes". Suggestions that Names might sue Lloyd's was "speculation".

U.S. House of Representations: The Sub-Committee on Oversight and Investigations of the Committee on Energy and Commerce

Report published: "Wishful Thinking - A World View of Insurance Solvency Regulation"

Health & Safety Commission: Health & Safety Statistics – Statistical Supplement to the 1993\94 Annual Report

Table 33: Death certificates mentioning specified asbestos-related disease 1968-1991 p *+

Table 34: Death certificates mentioning mesothelioma by age and sex 1968-1991 p *+

Table 35: Mesothelioma crude death rates (per million) by region 1983-1991 p *+

Director: Unfair is foul

Annual Meeting of the Institute of London Underwriters: Statement by the Chairman, Mr L N Campbell

Following the decision of Orion Insurance Company/London & Overseas top go into provisional liquidation, we were able to announce that agreement had been concluded between the ILU and Nationale Nederlanden regarding claims arising after those companies were acquired by Nationale Nederlanden in March 1969 and August 1970.

The House of Commons Treasury and Civil Service Committee press notice

Sunday Telegraph: Names deal likely in April

Evening Standard: Warning to ministers over Lloyd's

Government ministers have been warned by the Conservative chairman of the Treasury select committee that they will face a grilling on the Lloyd's insurance market if Department of Trade officials fail to give satisfactory answers at a hearing tomorrow.

Sir Thomas Arnold says he will raise a series of concerns about DTI handling of Lloyd's solvency. This would include issues surrounding the vital Non-Marine All Other Business account highlighted by Business Day last week.

"There are all sorts of things that we need answers to. We will want to know for instance what the real system for testing solvency was. If we do not get the answers we need we will have to call ministers," says Sir Thomas.

His concern is shared by other committee members such as Brian Sedgemore who questions whether Lloyd's might have run into insolvency last year.

The MP for Hackney South and Shoreditch says: "I suspect the department has been following its own agenda, which is to keep the Lloyds market afloat so that it can continue to attract foreign investment."

"I suspect it (the DTI) has been more concerned about making sure it did not frighten off future investors than checking to ensure the market was solvent using normal accounting and actuarial procedures."

DTI officials, who share responsibility for the regulation of Lloyd's with the market itself, come before the committee after Lloyd's chairman David Rowland made his second appearance yesterday.

Rowland has dismissed suggestions by some Lloyd's Names that the markets which faces losses of more than £8 billion, has been effectively bankrupt for some time.