Until 1994 all members of Lloyd’s were individuals, usually referred to as Names, and conducted their underwriting on the basis of unlimited personal liability for their share of the insurance business of a syndicate.
A distinction is commonly made between working Names and external Names. Working Names work within the Lloyd’s market as professional underwriters, while external Names take no part in their underwriting business beyond contributing capital. This distinction is now unimportant for tax purposes ( LLM5430). Working Names (see LLM1090) may be ‘sponsored’, that is they contribute their underwriting expertise rather than their wealth to a syndicate, with their Funds at Lloyd's ( LLM1200) being put up by their employer or a third party.
Individual investors are placed on syndicates, now through an intermediary, by members’ agents ( LLM1110). Traditionally they underwrite across a range of syndicates in order to spread their risk, hence the expression “spread capital”. Such underwriting is sometimes referred to as ‘bespoke’, as distinct from underwriting through a Members’ Agent Pooling Arrangement (MAPA – LLM1110).
Following the heavy losses of the late 1980s and early 1990s,
many individual Names did not wish to continue underwriting with
unlimited liability. Many of them have “converted” to
limited liability underwriting, either to Namecos (special small
companies – see
LLM1070), or to Scottish Limited
Partnerships. Special tax “conversion reliefs” were
introduced in 2004 to help them to do so (see
No new individual members have been admitted to the market from 1 January 2003. Individuals who wish to enter the market must now do so via one of the limited liability vehicles introduced to allow Names to convert ( LLM1070).