The Legislative Reform (Lloyd’s) Order 2008

EXPLANATORY NOTE

(This note is not part of the Order)

This Order removes a number of burdens imposed on the Society of Lloyd’s, its members and those working in the Lloyd’s market under Lloyd’s Act 1982 (“the Act”).

Article 3 of the Order removes the prohibition in section 3(5)(ii) on working members of the Council being elected for a consecutive term, and the exception to that prohibition in section 3(5)(iii) which permits the Chairman and Deputy Chairmen to be elected for two consecutive terms, but no more. It also removes the requirement under section 3(2)(c) for the appointment of nominated members of the Council to be confirmed by the Governor of the Bank of England.

Article 4 of the Order removes the requirement in section 4 of the Act that the Chairman and Deputy Chairmen may only be elected from among the working members of the Council. It amends that section to require elections to those offices to be made by special resolution of the Council, and to ensure that at least one of those offices will be held by a working member of the Council.

Article 5 of the Order repeals section 5 of the Act, which requires there to be a Committee of Lloyd’s, and removes all references to the Committee from the Act. Article 6 ensures that any regulations made by the Committee which remain in force are not affected by the abolition of that body, and ensures that decisions required to be taken by the Committee may instead be taken by the Council.

Article 7 amends the delegation powers in section 6(5) of the Act, which currently enable the Council to delegate certain powers and functions to the Chairman or a Deputy Chairman of Lloyd’s or to the Committee or its officers, by making more general provision. The Council is given power to make delegations to any Committees, subcommittees or other bodies of persons; or to any person (including, for example, the Chairman or a Deputy Chairman of Lloyd’s, or a person who is not a member of the Society). A special resolution will continue to be required for any delegation under the new provisions, and the Council will not be able to delegate any power or function for which a special resolution is required.

Article 8 replaces the requirement in section 7(1)(a)(i) of the Act that a majority of the members of any disciplinary committee must be members of the Society with a requirement that disciplinary committees must contain at least one person falling within one of the classes listed in the new section 7(1A).

Article 9 repeals section 8(3) of the Act. That subsection prevents underwriting members from accepting or placing business from or through anyone other than a Lloyd’s broker or a person approved by the Council. Article 9 also amends Schedule 2 to give the Council express power to regulate the conditions under which underwriting agents may accept or place business from or through insurance intermediaries who are not Lloyd’s brokers, and under which they may deal directly with the assured, and the grant, renewal and withdrawal of permission for a partnership or body corporate to use the title “Lloyd’s broker”.

Article 10 repeals sections 10 to 12 of the Act. This removes the prohibition on associations between managing agents and Lloyd’s brokers.

A full impact assessment of the effect that this instrument will have on the costs of business and the voluntary sector is available at www.hm-treasury.gov.uk.