A shortlist of three has been drawn up for the key role of franchise director at Lloyd's.

The role will be created following the adoption of the Chairman's Strategy Group proposals at an EGM on 12 September.

It is expected that the proposals will be voted through.

Lloyd's chief executive Nick Prettejohn and the FSA are both said to be taking a keen interest in the process.

It is understood that a person of international standing is being looked for, rather than a traditional London Market player.

This continues the trend of external recruitment started earlier this year when Lloyd's appointed its first ever chairman from outside the market, Lord Levene, to succeed Sax Riley.

One Lloyd's source said he was surprised the candidate would not necessarily be from the Lloyd's Market. However, he said this might be a logical move to avoid possible conflicts if a person already with contacts and allegiances were appointed.

Speculation centres on whether the new franchise director will be a former colleague of Lord Levene.

A Lloyd's spokesman said the new director would be appointed in the autumn, after the EGM vote.

He added: "It is the plan that the franchise be up-and-running for the 2003 year of account."