The Lloyd's Central Fund will cover the cost of any potential Financial Services Compensation Scheme (FSCS) contributions in 2004, up to a cap of £10m.
The decision came following completion of a review by Lloyd's of its UK personal lines business, which concluded that the FSA's decision to include Lloyd's in the FSCS "tilts the cost/capital balance in favour of business operating outside of Lloyd's in the UK".
The FSA recently announced it would include Lloyd's in the FSCS as of January 2004.
Though the Central Fund will pay the contributions in 2004, Lloyd's said the level of ongoing support will be reviewed annually.
Lloyd's has also decided to introduce a bi-annual personal lines forum. Lloyd's said the forum will offer "an ongoing opportunity to ensure the Lloyd's franchise continues to develop with the interests of personal lines business in mind".
