Introduction to Lloyd's: basic concepts and terms: types of Lloyd's member
Insurance business is conducted at Lloyd’s by the members of the Society (LLM1010), who join together in syndicates (LLM1080).The Lloyd’s Membership Byelaw distinguishes between underwriting membership and non-underwriting membership. Underwriting members become non-underwriting members on 31 December following the date they submit an application to resign from Lloyd’s, and have therefore ceased underwriting activity, though they may be involved in running existing liabilities off. See LLM5320 for more on cessation.
A member may be an individual member (LLM1050), or a corporate member. The term corporate member includes limited companies (LLM1060),and the other forms of limited liability member permitted by Lloyd’s. These are currently Scottish limited partnerships (SLPs) and (with effect from 1 January 2007) Limited Liability Partnerships (LLPs) (LLM1070), both of which exhibit legal personality and can therefore be members of the Society. The tax treatment of individual members is discussed at LLM5000. The tax treatmentof corporate members that are companies is at LLM4000. The tax treatment of SLPs and LLPs is at LLM6000.
What’s in a Name?
The terminology is confusing and inconsistent. All members of Lloyd’s, including corporate members, may be in strictness be referred to as ‘Names’, as they are the members of the Society. Increasingly, though, the term is used to refer to individuals, including both the remaining direct members who retain unlimited liability, and those “private capital” members who participate through the medium of“ Namecos”, SLPs or LLPs (see LLM1070). The Association of Lloyd’s Members, which represents the interests of these private, as distinct from large company, members applies the term “Name” to those who employ a Members’ Agent (LLM1110), and hence to all “private capital” providers even though they may invest through the intermediary of the Nameco, SLP or LLP. For convenience this manual usually adopts this convention, and refers to large companies, SLPs and LLPs that are members of Lloyd’s, as “corporate members”.
SLPs, LLPs, and other types of corporate member to which individual Names have ‘converted’ are often referred to as conversion vehicles (LLM6000). Since 2003, no new individual direct members have been admitted to the Lloyd’s market, and new entrants must adopt one of the forms of limited liability underwriting. LLM1050 gives more details.