Four Lloyd's syndicates have been set deadlines by the Lloyd's franchise board to demonstrate that they have adequate capital backing for 2004.

The warning was given in the board's progress report to the market. But a Lloyd's spokesman refused to identify the syndicates involved or give details of the deadlines.

"We do not comment on the progress of individual cases," the spokesman said.

In the report, the franchise board hinted that some syndicates may be forced to close down due to a lack of capital for 2004.

"Reviews have been undertaken to assess the risks and potential cost of a syndicate ceasing and the steps being taken to secure capital support for 2004," the report said.

The franchise board also outlined a number of other "strategic imperatives" for the Lloyd's Market in its report including:

  • Overhauling the realistic disaster scenario (RDS) model by April 2004. The board has established three main RDS work streams covering natural catastrophes, terrorism risks and liability risks.
  • Working with the Treasury on the changes necessary to UK law to implement the amended EU Insurance Accounts Directive, which facilitates a move to annual accounting.
  • Consulting the market on the various options for syndicate accounting from 2005, including UK GAAP, US GAAP, International Accounting Standards and fund accounting.
  • In his introduction to the report, Lloyd's chairman Lord Levene said "it remains the intention of the Council [of Lloyd's] and franchise board to introduce a full franchise business plan by the end of quarter two 2004."