Lloys's takes decisive step towards securing future of the market

LLOYD'S of London yesterday took another decisive step towards securing its future when the insurance market's annual meeting gave an overwhelming endorsement to crucial parts of its recovery plan.

Over 400 Irish investors were among those to suffer heavy investment losses at Lloyd's. The majority of the Irish Names, which included Lord Mount Charles, Lord Killanin, Mr Roger Garland, the former Green Party TD and the boxing promoter, Mr Barney Eastwood, are believed to have been keen to accept the market's settlement deal.

Some 95 per cent or more of those voting by proxy yesterday backed proposed special levies on members underwriting at Lloyd's between 1993 and 1995. These will contribute £440 million sterling towards the financing of the recovery package.

Separately, an attempt by rebel Names individuals whose assets have traditionally supported the insurance market to force the future Lloyd's market to make significant extra contributions to the package was rejected by 85 per cent of voters. Votes were still being counted last night and exact results were expected today.

Failure to win the votes would have wrecked the recovery plan, which includes an out of court settlement offer that Lloyd's disclosed was now worth £3.2 billion to loss making and litigating Names. This includes an extra £40 million agreed last week for US Names and an unspecified sum for those ruined by losses.

Mr David Rowland, Lloyd's chairman, described the results as "a ringing endorsement".

Most of the Irish investors were members of the Gooda Walker syndicate.

Last week, the chairman of the syndicate's action committee, Mr Michael Deeny, advised its 3,093 members who have battled with Lloyd's for more than five years for more compensation to accept the deal. Under the terms, members of Gooda Walker stand to recoup close to 38 per cent of investment losses incurred between 1988 and 1992. Names in other syndicates, however, will fare less well.

Individual Names will receive formal settlement offers later this month and then have until August 28th to accept. Opinion polls suggest over 80 per cent will back the plan. That leaves as the only significant remaining obstacle the threat of fresh legal action in the US or Britain aimed at blocking the plan.

Action to destabilise the package is threatened in Virginia but Lloyd's hopes a weekend deal in which most US state securities regulators agreed not to block the plan, would send "a strong signal" to rebel US Names.

Also planning a legal challenge is the Paying Names Action Group, representing those who paid losses during Lloyd's worst years. It believes they are being unfairly treated compared with those who refused to pay. Mr Tony Welford, the group's chairman, said a letter would be sent soon to Lloyd's threatening action unless further improvements were made.

Opening the meeting, Mr Rowland said Lloyd's priorities had to be the settling of litigation and writing off uncollectible debt. "To settle litigation gives benefits to those litigating compared with those who are not, and to write off debt may benefit those who have not paid in comparison with those who have."

He said the recovery plan was "the fairest we can propose" and offered "a better solution than any alternative that we or anyone else has been able to devise".

But Mr Alan Porter, who led the rebel Names yesterday, warned there were likely to be 4,000-5,000 "refuseniks" who rejected the settlement "a sufficient body of angry people, able to muster significant resources for litigation, to ensure that Lloyd's will be pursued until the full truth of what happened in the late 1970s and early 1980s comes out".