Introduction to Lloyd's: basic concepts and terms: types of Lloyd's member: conversion vehicles
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’.
Collective conversion vehicles (CCVs)
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).
Scottish Limited Partnerships (SLPs)
Ordinary partnerships cannot be members of Lloyd’s because they do not have legalpersonality.
Scottish Limited Partnerships (a limited partnership formed under the law of Scotlandunder the Limited Partnerships Act 1907) (‘SLPs’) do have legal personality, andwere admitted as members of Lloyd’s from 1 January 1997.
Limited Liability Partnerships (LLPs)
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.