After talks lasting several months, Lloyd's of London confirmed on Friday that it has abandoned its plan to buy out the Names and prevent them continuing on an unlimited liability basis.
Instead, Lloyd's chairman Sax Riley has announced the corporation will focus on alternative plans, including scrapping unlimited liability for new members joining the market.
The Names, said to be concerned over the loss of tax breaks and their historic status, were planning to vote against the plans at an extraordinary general meeting (EGM).
Buying out Names was one of the Chairman's Strategy Group (CSG) proposals formed in conjunction with consultancy Bain & Co, and was perhaps the most controversial, causing uproar among Names.
Sax Riley commented "We still hold the view that the concept of unlimited liability is no longer viable in this era of ever-increasing risk. It is no longer appropriate for individual underwriting members of Lloyd's to hazard their entire personal wealth."
Other proposals for reform were outlined on Friday by Riley, including plans to attract new capital by developing a range of investment schemes, replacing the three-year accounting regime with annual accounting, and establishing a franchise board to raise underwriting standards.
Riley added: "In today's world, Lloyd's can no longer sustain financial performance which goes from profit to a heart-attack every five years. If we do not get this right, any debate over the provision of capital to the market will be academic. Capital providers will just stop putting up money - it's as basic as that."
The proposals will be voted upon at the EGM that is expected to be held in September.
