LLOYD'S COUNCIL AGREES TO RECONSIDER REFORMS

LLOYD'S COUNCIL AGREES TO RECONSIDER REFORMS

Lloyd's of London has stumbled at the first hurdle, as the world's biggest insurance market considers sweeping reform proposals recommended by an internal market task force last week.

One of the key proposals of the so-called Rowland Report was to split in two the current Council of Lloyd's, which runs the Lloyd's market.Under the proposal, one side would handle the internal regulation of Lloyd's, while the other would work to promote the commercial interests of Lloyd's in the outside world.

The present Council of Lloyd's threw out these suggestions before the task force report was even published.

But Lloyd's said Thursday it now will reconsider the proposal for splitting the council as well as the other 65 proposals in the task force report.

David Coleridge, chairman of Lloyd's, claimed that major upheavals at the council level would make it very difficult to introduce the other, more urgent recommendations the task force had made.

He was staunchly supported by Alan Lord, Lloyd's chief executive. Mr. Lord said Monday that he would have resigned if the proposal had been approved. Cynics at Lloyd's were quick to point out that this would make little difference because Mr. Lord is due to retire from Lloyd's in the summer in any case.

Marjorie Mowlam, trade and industry spokeswoman for the opposition Labour Party, criticized what she called the "arrogance" of Mr. Lord and Mr. Coleridge for rejecting the task force proposals out of hand.

A former member of the council of Lloyd's, who asked not to be named, echoed Ms. Mowlam's view, but went further. He said Mr. Lord, an ex-civil servant, had refused to take advice and had led David Coleridge astray.

Market professionals expressed dismay on Thursday that Lloyd's should have encountered such bad publicity within a week of the report's publication.

David Rowland, chairman of Sedgwick James Inc., who chaired the task force's year-long deliberations, made it known that he regards the proposal as among the most important of the 235-page report.

Four recommendations on "governance" at Lloyd's are contained in the final chapter of the report. The issues are sensitive because Lloyd's unique system of self-regulation has frequently come under attack from the press and politicians in the past for permitting fraud in the market.

The task force recommended that the regulatory role of the present Council of Lloyd's should be "more clearly distinguished from that of serving the business interests of the market." A new "regulatory council" of Lloyd's would have at its head a chairman appointed from outside Lloyd's and approved by the governor of the Bank of England.

To promote the business interests of Lloyd's, the task force proposed the creation of a new "Lloyd's market board," with its membership elected by the various businesses active at Lloyd's.

The task force argued that this would enhance "the sense of ownership by the market practitioners of the executive bodies that act on their behalf."

The market board would have its own chairman who would also be the official chairman of Lloyd's.