Insurance and reinsurance marketplace Lloyd’s of London has detailed a proposal to merge its Franchise Board into the Lloyd’s Council as part of its ongoing drive for increased efficiency.
Lloyd’s explained that the operation of both bodies leads to duplication and occasional questions around which body should undertake specific activities.
Governance reports have also noted that the two bodies have been effective but not always efficient, while the existence of both makes Lloyd’s more difficult to explain to its stakeholders and external parties such as regulators and potential new entrants, it suggested.
Given that Lloyd’s is currently consulting on reforms to increase efficiency and profitability in the marketplace, it has decided the timing is also right to simplify its governance.
The proposal to merge the Board and Council into a single governing body has already attained the unanimous support of the members of both bodies, and Lloyd’s is now consulting with other market participants over an 8-week period.
If approved, the proposal would not change the powers of the Council, which are set by statute, but would bring those functions delegated to the Board back into the remit of the Council.
It would also revise the composition of the Council to between 9 and 11 nominated members, including the Chairman, CEO and senior independent director of Lloyd’s, as well as individuals to Chair the Audit and Risk Committees.
The Council would also comprise three working members, three external members, and the Chief Finance Officer and the Performance Management Director as additional attendees.
This would give Council an overall size of up to 17 members (19 with the additional attendees), which is comparable to the existing size of Council (18) but considerably fewer than the 27 members of Board and Council combined.
Lloyd’s added that the existing committee structure of the Council and Board would remain unchanged, although they would all become committees of the Council.
The Council and Board have also proposed to establish an Underwriting Advisory Panel as a committee of the Council to provide regular, structured and externally informed views on insurance issues.