The Financial Services and Markets Bill and the role of Lloyd's
| Published date | 01 April 1998 |
| Date | 01 April 1998 |
| DOI | https://doi.org/10.1108/eb024986 |
| Pages | 357-364 |
| Author | John Young CBE |
| Subject Matter | Accounting & finance |
Journal
of
Financial Regulation
and
Compliance
Volume
6
Number
4
The Financial Services and Markets Bill and
the role of Lloyd's
John Young
CBE
Received: 21st August, 1998
Lloyd's,
One
Lime
Street,
London
EC3M
7HA; tel: 0171 327 6826; fax: 0171 327 6331
John Young is chairman of the Lloyd's
Regulatory Board. From a background in
stockbroking he was elected to the Council
of the Stock Exchange in 1978. In 1982 he
became its Director of Policy, Planning
and Markets. After 'Big Bang' he helped to
negotiate the creation of the Securities
Association (TSA) as a self-regulating
organisation for exchange members,
cor-
porate finance practitioners and Eurobond
houses. He became its first chief executive
in 1987. Following the merger of TSA and
the Association of Futures Brokers and
Dealers to form the Securities and Futures
Authority in 1991 he was appointed its
Chief Executive. In 1993 he was appointed
Director and Chief Executive of the Securi-
ties and Investments Board (SIB), a
posi-
tion from which he retired at the beginning
of 1996. He remained a non-executive
director of SIB and a member of its
super-
vision and enforcement committees until
the end of 1997. He has been an indepen-
dent nominated member of the Council of
Lloyd's since January 1996 and was
appointed non-executive Chairman of the
Lloyd's Regulatory Board in November
1997.
ABSTRACT
The problems of the Lloyd's insurance market
over the past few years have been extensively
reported. The market survived nevertheless and
has since undergone extensive restructuring to
address the problems of the past. This has
included
a
fundamental review of its regulatory
framework. The new Financial Services and
Markets Bill
introduces
oversight of Lloyd's by
the Financial Services Authority (FSA), thus
implementing the key recommendation of
Lloyd's own review of its regulatory arrange-
ments, published last year.
INTRODUCING THE MARKET
The Lloyd's market has evolved over 300
years into a unique and highly specialist
market for the transfer of risk
—
the only
one of its kind in the world. With a total
capacity to accept insurance premiums of
£10,168m in 1998 (USS16,777m), Lloyd's
is among the world's largest international
insurers and its ability to innovate and
lead risks gives it influence beyond its size
in global insurance and reinsurance mar-
kets.
Lloyd's is not a company but a
market and its market structure has a
number of particular features that govern
how it is regulated and the purpose of
such regulation.
The capital to support the underwriting
is supplied by the members of Lloyd's — a
mix today of major investment institutions,
international insurance companies and spe-
cialist insurance investors, including indivi-
duals.
Until corporate members were
admitted in 1994, all the members of
Lloyd's were private individuals operating
as sole traders with unlimited liability.
Journal of Financial Regulation
and Compliance. Vol. 6, No. 4,
1998, pp. 357-364
© Henry Stewart Publications,
1358-1988
Page
357
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