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Insurer hit by rebel members

Crisis has hit insurance market Lloyds of London, putting eagerly-awaited reforms of its accounting procedure in jeopardy as investors prepare to oppose restructuring the market during a vote next week.

Link: Government considers radical auditing reforms

Trouble erupted on Monday, as the Association of Lloyds Members, the largest association of the insurance market’s investors, urged its 5,400 members to vote against reforms.

The members object to the market’s reform of corporate governance but because the ballot is a block vote, a poll against that would mean defeat too for changes to accounting practices. Failure to change the accounting at Lloyds would mean its practice of filing every three years, instead of switching to annual reporting, would have to continue.

Neil Coulson, partner at accounting firm Littlejohn Fraser, which audits about 15% of Lloyds’ syndicates, explained that although some members are not keen on the accounting changes most now see them as a ‘reality of life’.

But he added: ‘The accounting changes will be forced down Lloyds’ throat because of the drive of EU regulations and international accounting standards.

They will at least have to implement them at the global level.’

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