be confused with lloyds banking group lloyd s register or lloyd s list . this article is about the insurance market . for the film see lloyd s of london film . lloyd s redirects here . for other uses see lloyd . lloyd s of london type insurance market founded london england united kingdom 1688 ; 328 years ago 1688 founder edward lloyd headquarters lloyd s building lime street london united kingdom key people john nelson chairman inga beale ceo website lloyds.com the lloyd s building in lime street is the current home of lloyd s of london . lloyd s of london generally known simply as lloyd s is an insurance market located in london s primary financial district the city of london . unlike most of its competitors in the industry it is not an insurance company . it is a corporate body governed by the lloyd s act of 1871 and subsequent acts of parliament . it is a partially mutualised marketplace within which multiple financial backers grouped in syndicates come together to pool and spread risk . these underwriters or members are a collection of both corporations and private individuals the latter being traditionally known as names . the insurance business underwritten at lloyd s is predominantly general insurance and reinsurance although a small number of syndicates write term life assurance . the market has its roots in marine insurance and was founded by edward lloyd at his coffee house on tower street in 1688 . today it is based in a dedicated building in lime street opened in 1986 . its motto is fidentia latin for confidence . 1 in 2014 there were 94 syndicates that wrote 25.28 billion of gross premiums on business produced by 219 lloyd s brokers . the year saw few catastrophic loss events and collectively the market reported a pre tax profit of 3.16 billion . 2 contents 1 history 1.1 formation and first lloyd s act 1.2 san francisco earthquake 1.3 changes in the uk financial markets 1.4 second lloyd s act 1.5 claims and bankruptcies in the eighties and nineties 1.6 recruit to dilute 1.6.1 reinsurance to close 1.6.2 dilution of liabilities and the consequences 2 structure 2.1 council of lloyd s 2.2 businesses at lloyd s 2.2.1 members 2.2.2 managing agents 2.2.3 members agents 2.2.4 lloyd s coverholder 2.2.5 lloyd s brokers 2.2.6 integrated lloyd s vehicles 2.3 financial security 3 timeline of significant events at lloyd s 4 types of policies 5 miscellaneous 6 see also 7 footnotes 8 further reading 9 external links 9.1 data history edit formation and first lloyd s act edit the subscription room in the early 19th century . the market began in lloyd s coffee house opened by edward lloyd in around 1688 on tower street in the historic city of london . this establishment was a popular place for sailors merchants and ship owners and lloyd catered to them with reliable shipping news . the coffee house soon became recognised as an ideal place for obtaining marine insurance . the shop was also frequented by mariners involved in the slave trade . historian eric williams notes lloyd s like other insurance companies insured slaves and slave ships and was vitally interested in legal decisions as to what constituted natural death and perils of the sea . 3 lloyd s obtained a monopoly on maritime insurance related to the slave trade and maintained it until the early 19th century . 4 just after christmas 1691 the small club of marine insurance underwriters relocated to lombard street ; a blue plaque on the site commemorates this . this arrangement carried on until 1774 long after lloyd s death in 1713 when the participating members of the insurance arrangement formed a committee and moved to the royal exchange in cornhill as the society of lloyd s. the royal exchange was destroyed by fire in 1838 . the building was rebuilt by 1844 but many of lloyd s early records were lost . in 1871 the lloyd s act was passed in parliament which gave the business a sound legal footing . the lloyd s act of 1911 set out the society s objectives which include the promotion of its members interests and the collection and dissemination of information . 5 san francisco earthquake edit on 18 april 1906 a major earthquake and resulting fires destroyed more than 80 per cent of the californian city of san francisco . this event was to have a profound influence on building practices risk modelling and the insurance industry . lloyd s losses from the earthquake and fires were substantial even though at the time the placement of insurance business overseas was viewed with some wariness . one of lloyd s leading underwriters cuthbert heath famously instructed his agent in san francisco to pay all of our policyholders in full irrespective of the terms of their policies . the prompt and full payment of all claims arising out of the disaster helped to cement lloyd s reputation for reliable claims payment and as an important trading partner for us brokers and policyholders . it was estimated that around 90 per cent of the damage to the city was caused by the resultant fires . since 1906 fire following earthquake has generally been an insured peril under most policies . 6 changes in the uk financial markets edit it was realised that the membership of the society which had been largely made up of market participants was too small in relation to the market s capitalisation and the risks that it was underwriting . lloyd s response was to commission a secret internal inquiry which produced the cromer report in 1968 . this report advocated the widening of membership to non market participants including non british subjects and women and to reduction of the onerous capitalisation requirements thus creating a minor investor known as a mini name . the report also drew attention to the danger of conflicts of interest . the liability of the individual names was unlimited . during the 1970s a number of issues arose which were to have significant influence on the course of the society . the first was the tax structure in the uk for a time capital gains were taxed at up to 40 % nil on gilts ; earned income was taxed in the top bracket at 83 % and investment income in the top bracket at 98 % . lloyd s income counted as earned income even for names who did not work at lloyd s and this heavily influenced the direction of underwriting in short it was desirable for syndicates to make a small underwriting loss but a larger investment gain . the investment gain was typically achieved by bond washing or gilt stripping selling the gilt or other bond cum dividend and buying it back ex dividend thus forfeiting the interest income in exchange for a tax free capital gain . syndicate funds were also moved offshore which later created problems through fraud and self dealing . because lloyd s was a tax shelter as well as an insurance market the second issue affecting lloyd s was an increase in its external membership by the end of the 1970s the number of passive investors dwarfed the number of underwriters working in the market . third during the decade a number of scandals had come to light including the collapse of the sass syndicate which had highlighted both the lack of regulation and the lack of legal powers of the committee of lloyd s as it was then to manage the society . arising simultaneously with these developments were wider issues first in the united states an ever widening interpretation by the courts of insurance coverage in relation to workers compensation for asbestosis related losses which created a huge hole in lloyd s claims reserves which was initially not recognised and then not acknowledged . second by the end of the decade almost all of the market agreements such as the joint hull agreement which were effectively cartels mandating minimum terms had been abandoned under pressure of competition . third new specialised policies had arisen which had the effect of concentrating risk these included run off policies under which the liability of previous underwriting years would be transferred to the current year and time and distance policies whereby reserves would be used to buy a guarantee of future income . second lloyd s act edit in 1980 sir henry fisher was commissioned by the council of lloyd s to produce the foundation for a new lloyd s act . the recommendations of his report addressed the democratic deficit and the lack of regulatory muscle . the lloyd s act 1982 further redefined the structure of the business and was designed to give external names investors in underwriting syndicates introduced in response to the cromer report a say in the running of the business through a new governing council . 7 the main purpose of the 1982 act was to separate the ownership of the managing agents of the underwriting syndicates from the ownership of the broking firms which acted as intermediaries not as underwriters with the objective of removing conflicts of interest . immediately after the passing of the 1982 act evidence came to light and internal disciplinary proceedings were commenced against a number of individual underwriters who had allegedly siphoned sums from their businesses to their own accounts . these individuals included a deputy chairman of lloyd s and of its leading underwriters ian posgate and a chairman sir peter green . in 1986 the british government commissioned sir patrick neill to report on the standard of investor protection available at lloyd s. his report was produced in 1987 and made a large number of recommendations but was never implemented in full . claims and bankruptcies in the eighties and nineties edit in the late 1980s and early to mid 1990s lloyd s went through perhaps the most traumatic period in its history . unexpectedly large legal awards in us courts for punitive damages led to large claims especially on aph asbestos pollution and health hazard policies some dating as far back as the 1940s . many of these policies were designed to cover all liabilities that were typically excluded from broad form wide cover liability policies . the classic example of long tail insurance risks is asbestosis mesothelioma claims under employers liability or workers compensation policies . an employee at an industrial plant may have been exposed to asbestos in the 1960s fallen ill twenty years later and claimed compensation from his former employer in the 1990s . the employer would report a claim to the insurance company that wrote the policy in the 1960s . however because the insurer did not fully understand the nature of the future risk back in the 1960s it and its reinsurers would not have properly reserved for it . in the case of lloyd s this resulted in the bankruptcy of thousands of individual investors who indemnified general liability insurance written from the 1940s to the mid 1970s for companies with exposure to asbestosis claims . in the 1980s lloyd s was also accused of fraud by several american states and external names . among the more high profile accusations it was alleged that lloyd s withheld its knowledge of asbestosis and pollution claims until it could recruit more investors to take on these liabilities which were unknown to investors prior to investment . meanwhile enforcement officials in eleven us states charged lloyd s and some of its associates with various offences such as fraud and selling unregistered securities . separately ian posgate was charged with skimming money from investors and secretly trying to buy a swiss bank ; he was later acquitted . recruit to dilute edit reinsurance to close edit it may not be immediately clear how current members of current lloyd s syndicates which