The Parliamentary Select Committee on Regulatory Reform have approved the proposed Legislative Reform (Lloyd's) Order 2008 (the LRO).
As part of the market reform being undertaken to improve the competitiveness of Lloyd’s a Legislative Reform Order which amends the Lloyd’s Act 1982 (the Act) has been proposed by the Government. The changes take into account some of the significant changes in legislation since the Act (such as the Financial Services and Markets Act) as well as other changes in the insurance market since the Act was introduced.
Many of the provisions of the Lloyd’s Act are seen by the market to be over-restrictive and out-dated and present Lloyd’s with barriers to greater development. The reforms fall into two broad categories: changes to governance and administration; and market reforms.
The proposals aim to remove measures in the Act which may place unnecessary administrative burdens upon the market and restrict its competitiveness. Many supervisory requirements under the Act do not anticipate the FSA supervisory regime.
The Select Committee have considered the relevant tests in the Legislative and Regulatory Reform Act 2006 and have reviewed the consultation documents relating to the proposal. The Committee has proposed that the affirmative resolution procedure is appropriate and recommend to Parliament that the draft Order be approved.
The LRO must now be considered by both Houses of Parliament to approve the draft order. Once the draft order has been approved by both Houses of Parliament, the Minister may bring it into law.
For further information please see: Insurance Updater 12 March 2008