As part of the changes in the market in the mid 1990s (
LLM1020), arrangements were introduced to
allow Names to ‘convert’ from the traditional form of
underwriting with unlimited personal liability to underwriting
through a corporate body member in order to secure limited
liability for their underwriting. Such members are often known as
conversion vehicles. See
LLM6000 for more on conversion. Care is
needed with the terminology here, as these corporate body members
(Namecos, SLPs and LLPs as explained below) are all, strictly,
corporate members; but this term is more generally confined to
limited company members, Namecos and large corporates, and often
used simply to refer to the latter.
Many of the participators in the following types of limited
liability member will be converted Names, but some will represent
new entrants to the market.
‘Conversion’ allows the Name to use the same
capital to support the final years of underwriting as an individual
and the early years of underwriting through a Nameco, collective
conversion vehicle, Scottish Limited Partnership or Limited
Liability Partnership.
Companies specially set up by the members’ agent for, and owned and controlled by, an individual investor (sometimes with others) are known as ‘Namecos’.
Where large numbers of converting Names use their capital to support both their final years of underwriting as an individual, and the early years of a corporate member, the vehicle is sometimes referred to as a collective conversion vehicle (CCV) ( LLM6030).
Ordinary partnerships cannot be members of Lloyd's because they
do not have legal personality.
Scottish Limited Partnerships (a limited partnership formed
under the law of Scotland under the Limited Partnerships Act 1907)
(‘SLPs’) do have legal personality, and were admitted
as members of Lloyd's from 1 January 1997.
Limited Liability Partnerships formed under the Limited Liability Partnerships Act 2000 or the Limited Liability Partnerships (Northern Ireland) Act 2002 (‘LLPs’) are bodies corporate. The Lloyd’s Membership Byelaw was amended with effect 7 December 2005 to include LLPs in the definition of corporate members of Lloyd’s. The first LLPs began underwriting from 1 January 2007, rapidly overtaking the number of SLPs.
