How can Lloyd's agents please both regulators, asks Elliot Lane, when the regulators don't agree

Let's hope that the air-conditioning in the Lloyd's building is working. As underwriters and brokers bake outside City wine bars, temperatures are boiling over internally.

As Insurance Times reported two weeks ago, the straight-talking franchise performance director, Rolf Tolle, has taken an overtly "aggressive" stance with some managing agents. A self-confessed über-Bridge player, he is uncharacteristically not playing his cards close to his chest.

Naturally Tolle has made it plain that the Franchise Performance Board's (FPB) teeth must be felt. But he faces a dilemma as the landscape of Lloyd's changes. Listed Lloyd's vehicles have two masters - the FPB and the Stock Exchange - both of which are sticklers when it comes to following the rules. (And a third master looms, if the FSA decides to get hands-on where Lloyd's is concerned.)

The problem, of course, is transparency. One hates it and will strong-arm those who practise it. The other expects it and wants an open, compliant market place with no stone unturned.

Under Stock Exchange regulations, any change in a listed company's performance, business strategy, executive comings and goings, bonuses et al must be announced quickly and frankly.

In the present economic and regulatory climate, financially prudent companies want to keep their investors and shareholders informed as to their well being - and have a legal obligation to do so.

One senior Lloyd's market player made it clear that what he doesn't want after "such responsible fiduciary behaviour" is to feel the "hot blast of a pugnacious franchise board screaming at me for being too open."

In his defence, Tolle is stuck between the proverbial rock and the hard market. When there are suicide jockeys out there, not just flouting the FPB regime but blowing millions of pounds' worth of syndicate capacity in a few months to take advantage of the rates, then a firm hand is needed. Enforced discipline is what Lloyd's needs, but at what cost?

Bermuda and Gibraltar hang always in the shadows and both offshore domiciles will benefit if a balance is not found.

The quirks of Lloyd's still remain. While the rest of the City looks to acquire whole companies and swallow rivals, Lloyd's syndicates circle people and pick off specialists. Chaucer, Markel, and

Euclidian are on the march for new talent and will be announcing new 'acquisitions' soon. Brit took the 'lock stock' approach by buying up PRI Group but ironically has subsequently had difficultly holding down the staff.

Corporate money has distorted the market before, to the chagrin of the Names. But its influence at Lloyd's is again prevailing and will soon be all-encompassing.

So the dilemma remains for managing agents: tell Tolle first? Or face the Stock Exchange fine?