Introducing a Lloyds Nameco
A Nameco is a limited liability method by which an individual or group of individuals can underwrite insurance risks at Lloyds. It is a UK registered private company with one or more shareholders and its liability is limited to the value of the companys assets.

How a Nameco works

• The Nameco is established with one or more shareholders who pledge assets to the company to support underwriting at Lloyds.
• Assets are deposited as Funds at Lloyds (FAL). FAL are usually 40% (minimum £350,000) of the aggregate premium that the Nameco may underwrite (its premium income limit). FAL can include cash, shares, letters of credit, and bank guarantees.
• The Nameco purchases syndicate capacity at a Lloyds auction and underwrites risks to a maximum of this value.
• Only the assets of the Nameco are at risk.
• Members can make a return on profitable underwriting while continuing to benefit from assets supporting their underwriting capacity.

Example: A Nameco underwrites a premium income limit of £1m and deposits £400,000 as FAL. In 2009 it makes a profit of 5% (£50,000) of premium income limit. This is equal to a return of 12.5% on FAL. The Nameco can make an additional return on its FAL, in the form of capital growth and/or dividend income.

HAL
HAL acts as a Members agent for over 300 Namecos, managing all aspects of the Nameco as a corporate Member of Lloyds. HAL provides advice on underwriting affairs, including syndicate recommendations, structuring portfolios, analytical services and performance reviews. HALs sister company, Nomina Plc, provides all the business and administrative services required for the proper management of a Nameco. Our Member Executives can explain further the methods of joining without obligation.


Taxation and dividends
Namecos are liable to Corporation Tax on income and gains after deducting allowable trading expenses. The current rate of Corporation Tax for profits from 2009 of less than £300,000 is 22%. Individual shareholders resident in the UK are liable to income tax on the gross dividend.

The value of the shares in a Nameco qualify for 100% Business Property Relief. If the shares are bequeathed to an approved person or persons, then the interest in the Nameco is transferred on death. The company can either continue to trade, or be sold in its entirety, or cease to trade (in which case the syndicate capacity is sold and the underwriting years are run off).

For further information please contact Hampden Tax.

Costs
The total establishment cost charged by Lloyds, HAL, and Nomina is £10,000. The cost of purchasing capacity at auction may be estimated at £200,000, depending on the syndicates selected and the availability of capacity. In addition there are annual charges itemised in HALs brochure, A Limited Liability Investment at Lloyds (Nameco). Our Member Executives can explain further the methods of joining without obligation.


Dates for establishing a Nameco
Applications for new Namecos must be received by the 31st of August but should be made no later than the end of July to ensure that the Nameco is approved in time for the Lloyds capacity auctions in September. Funds at Lloyds must be deposited by the end of November.

For further information please contact:
Neil Smith
Hampden Agencies Limited
85 Gracechurch St
London EC3V 0AA
T: +44 (0) 207 7863 6500
Neil.Smith@hampden.co.uk