| Lloyd's Insurance Market originated in a coffee house | | | | of the Corporation. |
| belonging to a certain Edward Lloyd in 1688, which | | | | The Lloyd's insurance broker is the other part of the |
| was the haunt of those concerned with maritime | | | | market and is also subject to rules and disciplines. He |
| trade. For many years business transacted at Lloyd's | | | | has to be accredited and membership is not granted |
| was confined to marine insurance. In the nineteenth | | | | freely. Only a Lloyd's broker can enter the |
| century, however, a large non-marine business began | | | | Underwriting Room and transact business therein. The |
| to be built up, particularly business from overseas, | | | | 'Room', as it is called, is that place where the |
| and Lloyd's is now a major international market in this | | | | underwriters sit at 'boxes' and transact the business. |
| field. | | | | It is normal for Lloyd's brokers to be either limited |
| This organisation is unique in the world. The Council of | | | | companies or partnerships rather than individuals, and |
| Lloyd's, established under the 1982 Lloyd's Act, is the | | | | the chief executive of such a company or |
| governing body and activities under its jurisdiction are | | | | partnership is the broking member. The staff of the |
| governed by Acts of Parliament. Statutory | | | | company with broking powers are known as |
| regulations aimed at preserving the solvency and | | | | 'substitutes'. There is in addition a category entitled |
| integrity of Lloyd's underwriters differ from those | | | | 'messengers' who are allowed to take messages into |
| applicable to insurance companies, though the intent is | | | | the Room to give the broker but who are not |
| the same. | | | | empowered to conduct any insurance broking. |
| Unlike most of its competitors in the insurance and | | | | Lloyd's broking offices range from the giant |
| reinsurance industry, Lloyds is not a company. The | | | | companies through medium-sized operations, to the |
| Society of Lloyd's was incorporated by the Lloyd's | | | | very smallest broking firms. Many large and |
| Acts 1871-1982. The systems used for issuing policies, | | | | medium-sized offices employ specialists and operate |
| collecting and accounting for premiums, and dealing | | | | a number of separate departments. Small firms may |
| with claims also differ from those adopted by | | | | specialise in one class of business or another and |
| insurance companies. Only accredited Lloyd's brokers | | | | operate with unique trade syndicates. For instance, |
| can place insurance at Lloyd's. The Corporation | | | | one broking house concentrates on professional |
| provides the premises and all the facilities for those | | | | indemnity business, many others on reinsurance, yet |
| transacting business within its jurisdiction, together | | | | others on the hotel and catering trade, and so on. |
| with the regulatory controls. The actual business is | | | | Some small firms, however, operate a general |
| not transacted by the Corporation of Lloyd's but by | | | | business. |
| underwriting members on the one hand and Lloyd's | | | | While there is a principle that transactions have to be |
| insurance brokers on the other. | | | | carried out in the Room itself there are a few |
| Underwriting members are individuals and their liability | | | | exceptions to this, it would be totally impractical for |
| is unlimited. However, it would be impossible for all | | | | Lloyd's to transact motor insurance business, |
| those who are underwriting members of Lloyd's to | | | | particularly for individual policyholders, in this way. |
| transact the business individually and thus they are | | | | Certain motor insurance syndicates have overcome |
| formed into syndicates in the charge of the person | | | | this problem by allowing provincial insurance-broking |
| who is responsible for the transaction of the business | | | | firms to deal direct with them but requiring that the |
| on their behalf. This person has complete power of | | | | premium is guaranteed by a Lloyd's broking firm. |
| attorney on behalf of the members of the syndicate. | | | | Some of these syndicates have actually set up |
| Naturally, an underwriter with power of attorney | | | | offices in provincial cities and the local insurance |
| needs to have assistance and this is provided by his | | | | brokers deal direct with these offices. This method |
| accredited deputies. Those persons actually accepting | | | | enables syndicates to compete with insurance |
| insurance have of course to comply with rules and | | | | companies having local branches. |
| regulations and submit themselves to the disciplines | | | | |