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'failed to regulate' Lloyd's
News, October 7, 2002
Lloyd's Names were bankrupted, some committed suicide
European Parliament report report makes it more likely that investors who
lost money backing the market will sue the government.
report says the government failed to implement EU laws governing the
industry and failed to make sure that Lloyd's produced adequate accounts.
accounts were not properly signed off by auditors for several years,
during which time they carried warnings that losses from asbestos-related
claims were "unquantifiable", the Conservative MEP and report
author Roy Perry told BBC Radio.
the world's oldest insurance market, racked up losses of about £8bn
($12.5bn) in the five underwriting years between 1988 and 1992.
these years the market was hit by a wave of big insurance claims, many of
of the Lloyd's names - wealthy individual investors who risk their entire
fortunes as underwriters - were bankrupted, and some committed suicide.
EU directive obliges member governments to make sure that insurers have
enough funds to cover their liabilities.
report says the UK Government was slow to write the directive into UK law
and then did little to make sure it was acted upon.
Mr Perry said that what the UK Government did was "an open
question" because it has refused to tell his inquiry.
say to me 'We have a robust defence against these charges'. I say, 'Let's
hear them'," he told BBC Radio 5 Live.
whole saga has been characterised by secrecy and delay, besmirching the
reputation of the government and the European Commission," the report
question must arise whether they (investors) are entitled to compensation
because of the delay in implementing EU law and failure to apply it fully
even when it was put on the statute book," it adds.
EU's executive warned last December it was considering taking action
against Britain, which could include a case in the European Court of
it does so, Lloyd's investors may also bring a lawsuit against the
Perry wants the European Commission to make a quick decision, the UK
government to publish its defence and an inquiry to be set up into how
Lloyds' has been regulated.
insurance market's huge losses led to a decline in the number of Lloyd's
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