Outrage over Lloyd's buyout plan

LLOYD'S of London plans to raise hundreds of millions of pounds to buy out Names - individuals who risk their wealth in the insurance market. It is opening negotiations with investment banks.

The organisation last week published plans - revealed last month by Financial Mail - which will end its 300-year-old tradition of allowing the Names to underwrite business with unlimited liability.

Lloyd's also wants to turn itself into more of a 'franchise' operation, vetting the standards and business practices of syndicates in return for allowing them to use what is still one of the most prestigious brand names in the world of insurance.

Though most of the proposals have been welcomed, the assault on unlimited liability Names has sparked outrage. Names' representatives have said there is no price they will accept for giving up their traditional role. Michael Deeny, head of the Association of Lloyd's Members, the largest group of Names, said: 'We won't give a figure for getting out because we have no intention of selling.'

The problem for the ruling Lloyd's authorities is that a majority of its members will have to support the proposals at an extraordinary meeting in the summer and the vote of each individual Name counts as much as that of each corporation.

Unlimited liability Names outweigh corporate members by three to one. Lloyd's now intends to launch a charm offensive in an attempt to win backing.