§ Mr. JackTo ask the Secretary of State for Trade and Industry if he will make a statement on implementation of the recommendations of the Neill committee on regulatory matters at Lloyd's.
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§ Mr. RedwoodLloyd's was asked to implement the substance of the Neill report within two years. The Neill report contained 70 recommendations, of which 69 were addressed to Lloyd's, with the purpose of ensuring that regulatory arrangements at Lloyd's give protection for names comparable to that provided for investors under the Financial Services Act. The chairman of Lloyd's has sent me a memorandum which shows that, of the 70 recommendations, 65 have now been implemented. I will place copies of this memorandum in the Library.
The one recommendation which was for Government to implement called for Lloyd's to be put in the same position as the Securities and Investments Board and the self-regulatory organisations in relation to exceptions to the Rehabilitation of Offenders Act 1974. My right hon. Friend the Home Secretary intends to lay a draft order before Parliament in the autumn.
Of the four other recommendations not yet implemented, Lloyd's has issued consulation papers relating to its proposals for a Lloyd's members' compensation scheme, and for financial standards applicable to underwriting agents. Lloyd's will implement these two recommendations as soon as possible after the process of consultation has been completed. Another Neill recommendation related to inception date accounting under which greater precision would be given to allocating risks to years of account. This is still being considered by Lloyd's and I have asked the chairman to keep in touch with me on the resolution of the difficulties. The remaining recommendation requires Lloyd's to consider at the end of 1991, if there is no marked shift in the distribution of auditing work, limiting the number of syndicates which may be audited by any one firm. Lloyd's is keeping this under continuing review and will take action as necessary.
The implementation of the substances of the Neill report has been a massive task for Lloyd's, and I commend the council of Lloyd's for the vigour with which it has tackled it. The objective of the Neill report in providing increased protection for names has been achieved.
As the council of Lloyd's recognises, regulation requires constant vigilance and review and regulatory arrangements cannot be set for all time. I will continue to keep in close touch with the chairman of Lloyd's on these matters.