Legislative Reform Order  to amend Lloyd's Act 1982 - 26.06.07

Please see below a written Ministerial statement that was made public
last week in the Commons announcing the Government's decision to develop
legislative proposals to modernise the governance arrangement for
Lloyd's.

Written Ministerial Statement
London Insurance Market Reform

The Economic Secretary to the Treasury (Mr Ed Balls): Following Budget
2006, the Chancellor established a High Level Group to consider issues
related to the international competitiveness of the UK financial sector,
recognising the opportunities presented by emerging markets and the
strength of international competition from other financial centres. As
part of this work, the Chancellor asked Lord Levene, Graham Millwater
and Andrew Kendrick to review the business processes of the London
Market. The Treasury too has been working closely with the Financial
Services Authority and the wholesale general insurance market to
identify market led reform and modernisation that can enable the
industry to remain competitive in a global market. The Treasury has also
been developing its understanding of the business environment for this
sector. The Treasury, Financial Services Authority and wholesale
general insurance market will take stock again and assess progress in
the autumn.

As part of this wider work on reforms of the London insurance market,
Lloyd's of London has been working with the Treasury to identify areas
where its corporate governance arrangements are out of step with modern
practices. Following these discussions, the Treasury has decided to
develop legislative proposals to modernise the governance arrangement
for Lloyd's. These proposals will take the form of a Legislative Reform
Order to amend Lloyd's Act 1982. The aim of the proposals will be to
update the governance arrangements of the market to reduce costs and
unnecessary bureaucracy. The Treasury will have extensive consultation
with interested parties and intends to publish proposals in the New
Year. Any proposals will meet the preconditions and restrictions of the
Legislative and Regulatory Reform Act 2006.

HM Treasury
21 June 2007

Lloyd's Chairman Lord Levene said:

"We warmly welcome this move by the Government. In the past two decades,
Lloyd's has undergone significant changes and the proposals to modernise
the governance arrangements of Lloyd's will bring us into line with
today's thinking in the wider corporate arena. We look forward to
working with the Treasury."