At the beginning of July, Lloyd's regulators continued to tighten up market practices by imposing financial penalties on 19 syndicates.

The syndicates' managing agents were told they might have to increase their combined £1.5bn capacity base by up to 20% for the 2001 year of account.

This action was only one step short of the ultimate sanction of deregistration. Regulators from the Prudential Supervision Committee acted after the named syndicates were alleged to have breached strict thresholds for losses and forecast results.

Also in July a war of words broke out between wholesale broker John W Beard and one of its sub-agents, Lloyd Manley, after Insurance Times revealed that Lloyd Manley had been charging excessive administration fees.

John Beard said there appeared to be many instances of overcharging by the Staffordshire intermediary when selling the Clubsure scheme to working men's clubs. Beard wrote to 50 clubs in the north west, advising them to check

their policies. This led to Lloyd Manley accusing the broker of trying to steal its client base.

Lloyd Manley director John Bateman said: “He is deliberately trying to get our clients to renew with them.”

Also in the month, Independent Insurance launched a blitz on the small to medium-sized business market with five-year insurance deals.

Its businessrisk.com initiative was trailed by a group of brokers, with the insurer insisting that it would underwrite and survey each business exactly as if it was a bigger client.

Independent said it would recoup its investment through long-term deals. Ian Helmore, Independent's assistant general manager, said: “This should lead to good loss ratios but it will be expensive to run. On the grounds of the cost, we will only do this on the basis of a five-year policy.”

The minimum policy was £5,000 spread over five years – high enough to cut out very small businesses but low enough to allow Independent to target small, but growing firms.

The insurer's move was a challenge to the traditional players, as many insurers have targeted small businesses. RSA had launched its Enterprise scheme specifically targeted at the sector and other companies such as Norwich Union, Axa and Groupama are active in the sector.

At the end of July a team of Lloyd's syndicates was battling it out with Spanish football giant Atlético Madrid.

The insurers, led by Goshawk, refused to pay out a £4m claim for loss of revenues, following Atlético's relegation from Spain's Primera Liga.

The Lloyd's group claimed that Atlético massively reduced its chances of staying up by selling key players such as the gifted Argentinian pair, Jose Maria Romero and Jose Antonio Chamot.

Atlético finished second bottom of the league – seven points adrift of Numancia who avoided the drop.

Before the 1999/2000 season, Atlético took out a total of £15m of insurance at Lloyd's, a large part of which was to protect the club against relegation.

One of the underwriters said: “There are serious doubts about Atlético's claim because they sold some of their best players before they got relegated.”