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Lloyd's considers new limited partnership

Names have traditionally underwritten at Lloyd's as sole traders with unlimited liability but after the 1996 Reconstruction & Renewal plan, pressure mounted to introduce limited liability schemes. Two types were introduced - Namecos and Scottish Limited Partnership - but neither are perfect and a significant number of Names continue as unlimited liability sole traders.

However, English limited partnerships have since been developed by the UK government and, in theory, replicate almost all the advantages - other than the Special Reserve Fund - which unlimited liability Names enjoy. Crucially, these include the tax benefits currently enjoyed as sole traders, including the ability to offset losses, and also allow for pension contributions.

Lloyd's has set up a Working Party and will devote resources to explore LLPs further if there is sufficient demand from Names. It will not, however, be available to overseas Names. The Lloyd's reforms of 2002 - which ushered in the creation of the franchise concept - also signalled a move to limited liability with the decision to stop new, unlimited Names joining the Society.

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