Names to resist limits

Lloyd's attempts to lure unlimited liability Names to a limited status will face resistance, according to the Association of Lloyd's Members (ALM).

In January, the Chairman's Strategy Group (CSG) and consultants Bain & Co suggested ways to modernise the insurance market. One recommendation was to end unlimited liability Names.

The proposals were greeted with strong opposition from Names, who gain considerable tax advantages from underwriting with unlimited liability.

Last week, Lloyd's chairman Sax Riley revealed that he hoped they would change to a limited status if similar benefits could be offered.

He said: "We have written to the government and been in touch with the Inland Revenue to press our case to enable individual members to carry forward tax losses."

But ALM chief executive Anthony Young said the insurance market had only touched the surface of the problem.

"There are other tax advantages that they are not addressing," he explained. "They [unlimited liability Names] also have big tax inheritance and pension advantages."

Young said the ALM had brought up these issues with Lloyd's, but it would be hard for the market "to go to the Inland Revenue with a shopping list" of tax benefits.

Lloyd's spokesman Adrian Beeby said allowing losses to be rolled over into the next year of account was "the last major advantage of being an unlimited liability Name".

He said: "The key change will be to do with the carrying forward of losses. But we are aware of the inheritance tax and have been in discussions regarding it."