MEPs argue UK must face Lloyd’s rap

Date: 13/12/01

MEPs are urging the European Commission to take legal action next week against the UK for its part in the near collapse of the Lloyd's of London insurance market in the early 1990s.

The call, led by British conservative Roy Perry, follows a year-long campaign to urge the Commission to punish London for failing to ensure EU insurance rules were properly applied to Lloyd's.

The failure to insist on a proper audit stipulated by the 1973 law meant many new investors - known as 'names' - continued to put money into the market even though Lloyd's insiders allegedly knew they faced potential ruin from huge asbestosis claims from the US and Canada.

Perry, who sits on the assembly's petitions committee, said: "The Commission has by now had adequate time to make up its mind about infringement proceedings over the British government's failure to properly apply this directive."

EU sources say the Commission must decide next week whether it wants to drop the case, triggered by a complaint from a disaffected Lloyd's investor, John Pascoe.

Perry said London had responded to a number of critical questions earlier this year. But both London and the EU executive "have denied Parliament all access to the replies to those questions".

"The British government appears to have something to hide and the Commission has a responsibility to uphold EU rules.

"Clearly the responses were less than satisfactory otherwise the petitioners would have been answered long ago."

Jonathan Todd, spokesman for single market chief Frits Bolkestein, confirmed that the decision whether to start legal proceedings was "under consideration".

If the decision was taken to go ahead with legal action the first step would be a formal warning letter setting out the Commission's views and demanding a formal reply.

MEPs are urging the European Commission to take legal action against the UK for its part in the near collapse of the Lloyd's of London insurance market in the early 1990s.