'Underwriters should operate to the highest standards of professional integrity and competence,' says Lloyd's

Three employees of Ark Syndicate Management have admitted charges of discreditable and detrimental conduct,writes Angelique Ruzicka.

In a statement, Lloyd’s said that Mark Mellis and Ksenya Mazalova had appeared before its Enforcement Board for discreditable conduct after transferring sensitive documents from their former employer, Travelers, to Ark Syndicate Management. Albert Thomas Phipps was charged with detrimental conduct.

Lloyd’s said that Mellis and Phipps were personal accident underwriters at Ark, while Mazalova was an assistant underwriter in the same team.

The statement said that Mellis sent Mazalova a number of confidential documents relevant to underwriting that belonged to Travelers. Mazalova then loaded them on to Ark’s IT system.

The statement said that Ark became aware in early December of the documents Mazalova loaded and took immediate steps to disable all access to them.

It said that Phipps failed to underwrite properly and wrote a 40% leading line on a large open market account. Mellis had primary responsibility but that as he was on “garden leave” the account came to Phipps to renew.

A broker was seeking to make Ark syndicate 4020 the lead while Phipps was offered a small 2.5% following line. Phipps failed to challenge the broker as to why the line for which he was underwriting was reduced and no longer the lead syndicate. Phipps further failed to take steps to recover and preserve the position for his employer by negotiating with the broker.

The board suspended Mellis for six months and Mazalova for three and ordered each of them to pay £10,000 costs. Phipps was disciplined and ordered to pay £5,000 costs.

A Lloyd’s spokesman said: “Lloyd’s expects underwriters to operate to the highest standards of professional integrity and competence. The present disciplinary measures demonstrate our commitment to ensuring those standards are maintained.”

The CEO of Ark, Ian Beaton, would not comment on the contents of the document, but said: “Ark itself received no censure from Lloyd’s. Lloyd’s is the franchise owner and will investigate in areas as it sees fit, and it has its own rules and by-laws.”

Travelers confirmed that the three employees had worked for the company, but refused to comment further.