Lloyd's has taken the unprecedented step of publicly accusing Markel Corporation of not paying its debts to the Central Fund.
In Lloyd's reports and accounts 2004, published last week, the corporation highlighted the outstanding losses of an insolvent member, corporate vehicle Standfast. Its losses hit the Central Fund last year for £7.75m.
Markel was one of three shareholders in the operation, along with managing agency Riverside, now insolvent, and Limit, now QBE.
Lloyd's stated in the accounts on Standfast losses for the past 12 months: "We disclose that Markel Corporation has not provided any further funds".
According to market sources, both Riverside and Limit have paid sufficient funds to cover their losses. It is understood that the remaining liability is between £3m to £5m, which Lloyd's believed Markel should pay.
However, Markel Corporation president and chief executive Tony Markel said the insurer has no legal obligation to pay.
He said: "Our association with Standfast significantly pre-dated our Terra Nova acquisition, consisted of a limited liability portfolio investment in the Standfast holding company and involved no operational oversight whatsoever.
"Lloyd's appears to have a technical accounting requirement to make footnote disclosure about investors in Standfast. We believe our position and limited involvement is clear and unremarkable."
A Lloyd's spokesman said: "We are disappointed that Markel, which has such a significant involvement in the Lloyd's market, has chosen not to meet their share of Standfast's losses."
