Every Lloyd's managing agent must implement new underwriting, claims and risk management standards by 1 January 2007 or have the standards imposed on them.

Lloyd's will be visiting managing agents from now until the end of the year to make sure they are ready to comply with at least the minimum franchise standards.

The standards, which were published and made available to the market in July, will be imposed early next year to set a clear market benchmark. They are intended to help drive competitive performance and reduce performance variables.

A spokesman for Lloyd's said: "During the transition period we will be assessing the current performance of all managing agents, which trade at Lloyd's.

"Going forward from that date, it will be part of the usual business planning process, where Lloyd's reviews each syndicate's business plan, to ensure that they are meeting those minimum standards."

But one market insider claimed that there is real uncertainty and concern about the new standards among some managing agents.

"For managing agents that have risk management teams in place, the standards will be much easier to comply with, but for those who don't it could be a lot more difficult," he said.

A senior market source added: "The whole point of Lloyd's is that it is an entrepreneurial place to be, a place where people go for unusual and innovative products. The big fear is that you won't be able to be innovative any more."