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TIME EUROPE Monday, November 6, 2000 Interview with Max Taylor The extended version of TIME's exclusive interview with the chairman of Lloyd's Page One | Two | Three TIME: But do you think that in this day and age of corporate accountability it is desirable or indeed legitimate for the likes of organisations like Lloyd's to be immune from prosecution for anything other than fraud? Taylor: This is exactly the way that it was dealt with in the Financial Services Act. It is the way it is dealt with in equivalent regulatory environments in this country and elsewhere. TIME: Can you translate that? Taylor: There are two examples. One is the Bank of England Banking Act 1987 and the other is the Financial Services Authority under the Financial Services Markets Act 2000. So that kind of immunity is standard practice as far as regulating markets is concerned. The fundamental point is that even if section 14 did not apply, even if he did not have that immunity, the terms of the judgment are such that they would not have a claim against Lloyd's, whether for negligence or otherwise. I think we should add to that that of course there is the right, and that right has been pursued, to take action against individual agents in the market, managing agents, members' agents, even individual people and those have been pursued and that has happened and, indeed, Lloyd's itself has taken disciplinary action against those as well. TIME: So you are confident that Lloyd's has the right regulatory and supervisory instruments in place to ensure that the sort of problems that the judge referred to that occurred in the 1980s will not come up again? Taylor: Yes, of course. TIME: Lloyd's has seen a bit of red ink in recent years, although I believe many market watchers consider that the corner has been turned. Looking ahead, what do you see as the main challenges not only for Lloyd's but for the insurance industry as a whole? Taylor: There are two parts to that from Lloyd's point of view. One, of course, is we are subject to the same pressures as anybody else in the industry and we must continue to improve our efficiency and to reduce our costs to utilise technology to make ourselves easier to do business with, to improve the service we give our clients. We of course are doing that and constantly reducing our overheads in order to provide more efficient services to our clients. That is something we concentrate a huge amount of time on. Lloyd's of course is also a unique institution, being a market, and the value of Lloyd's as a global insurance market is we are the only true market for specialist insurance and reinsurance risks. We are the second largest commercial insurer in the world and, as far as we are concerned, the fact that our business is growing this year at the rate it is demonstrates that what I hear from risk managers around the world (i.e. we need Lloyd's) is absolutely the case. So, from our point of view, the aim is to build on the Lloyd's very solid reputation around the world for being really high quality specialist underwriters, make sure that we can deliver our products and services in the most efficient way to our customers, and ensure that above all else this market remains at the front end of innovation so that, for example, the 14 new products of Lloyd's underwriters created in 1999 really are available to all of our customers around the world. TIME: It's been suggested that your supervisory and regulatory regulations in place are not necessarily in compliance with EU insurance directives. Do you have a comment on that? Taylor: No, we're not aware of that as an issue at all. The European insurance regulations are evolving. Every European country is going through the process of looking at how that affects their domestic requirements but I think we can reasonably assume the Financial Services Authority, who after all the need of developing a new regulatory environment here, is fully aware of the requirements that will take effect within Europe. TIME: We understand also that Lloyd's is the subject of an investigation by the US federal authorities. Are you cooperating with them on that? Do you have a comment there? Taylor: We absolutely co-operate with the US Attorney's office. They have had an ongoing investigation which had a sort of stop-start approach to it which has been going on for a number of years. They are pursuing some of the same issues as were being pursued in the Jaffray case. They are, of course, getting the same information as was presented in the Jaffray case. We are co-operating with them fully and we will certainly expect them to come to the same conclusion as Judge Cresswell has come to given that they are dealing with the same facts. TIME: You have got this victory under your belt but what has the Council, what has the hierarchy of Lloyd's learned from the losses and the litigation of the last decade? Taylor: They learnt it a long, long time ago. We are talking about things that happened 15to 20 years ago and we regret what happened then and we said that on many, many occasions. The lessons were learned a long time ago. TIME Europe home More stories from TIME Europe and related links E-mail us at mail@timeatlantic.com |
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