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Insurance Markets (Regulation)

Volume 33: debated on Monday 6 December 1982

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16.

asked the Minister for Trade if he will seek to appoint a roving inspector to assist in the proper regulation of the insurance markets including Lloyd's.

Is it not clear that, even if the recent Lloyd's Act had been operative in the past year, the latest stream of scandals would almost certainly still have been neither detected nor weeded out? Does that not suggest, first, that there must now be statutory disclosure of all documents as fully as is required under the SEC rules, since that alone brought the Howden scandal to light, and, secondly, that power to investigate prima facie evidence of malpractice quickly should now be invested in an inspector accountable to the Secretary of State, not to the Lloyd's council?

The hon. Gentleman will realise, with regard to rapid inspections, that we inspected the Minet allegations extremely rapidly. The investigation was started in two days and within a few days after that inspectors were appointed. We now have an Act that comes into full operation in January. Meanwhile, my right hon. and noble Friend has made our general anxieties about the subject quite clear. At a meeting at which I was present last week, the chairman of Lloyd's assured us that he would keep in close and regular contact with us.

Does my hon. Friend agree that the contribution of Lloyd's to Britain's invisible exports is too important for its image to be tarnished as it has been in the past few months and years? Will he make the seriousness with which hon. Members view the present activities in Lloyd's crystal clear to Sir Peter Green and other members of the council?

I am well aware of that. We have made it absolutely clear. We should not forget that Lloyd's is the largest insurance market in the world. Every other insurance market does business with it because of its high standards of professionalism.

Does the Minister agree that, as increasing opportunities exist for insurance frauds at international level, the public can be protected only by full international co-operation in detecting and prosecuting those who are responsible? Will the Minister therefore discuss with Sir Peter Green the allegation that Mr. Bill Allan made at the recent Dallas conference to the effect that he experienced a complete lack of co-operation from Lloyd's when investigating the Kenillworth scandal? Will he ask Sir Peter to assist those of us who want to retain international financial institutions in London by issuing a denial, an explanation or a promise of improvement?

We received a warning just before the weekend about the Kenillworth scandal. I have carefully examined the reports that have been appearing in the press. The matter must worry us. I shall bear the right hon. and learned Gentleman's points in mind.

Does my hon. Friend agree also that it is essential to restore confidence in Lloyd's by putting an end to the present shambolic atmosphere of leaks, rows and scandals? Does he agree also that probably the best and quickest way to do that is to follow the apparent advice of the governor of the Bank of England and to appoint an independent chief executive of Lloyd's who would do the job of regulation which the present chairman and committee are so manifestly failing to do?

I agree with the general tenor of my hon. Friend's remarks. We should now wait until the Act if fully implemented, which, after all, is a matter of only about four weeks from now.

Is this not an example of the Government's double standards? They are refusing to have any sort of regulatory device over Lloyd's, largely because about 100 Conservative Members are members of Lloyd's. Scandal after scandal breaks out in Lloyd's, yet very little is done. Government supporters went into the Lobby in support of the Lloyd's Act, which gives the council of Lloyd's massive immunities and at the same time attacked trade unions and, by means of legislation, tried to treat them in a highly discriminatory and savage manner.

If I followed the hon. Gentleman correctly, I must say that I do not agree with a word of what he said. The 1982 Act was based on the belief of both the Government and the Opposition, as well as Lloyd's, that in principle the most appropriate form of regulation for a market as flexible as this Is self-regulation.

Is it so important that it cannot wait 10 minutes, so that I can take it at the end of Question Time?

In response to the remarks of the hon. Members for Keighley (Mr. Cryer), I wish to point out that no Member of Parliament who belongs to Lloyd's voted on the Lloyd's Act.