The Detroit times. [volume] (Detroit, Mich.) 1903-1920, 1908-08-07
LLOYD s SYNDICATE
FACES HEAVY
LOSSES
NEW YORK. Aug. G.-The Time,

NEW YORK. Aug. 1.-THE Times
says:
Details OF the financial troubles OF
some OF the underwriters In the Lon
don Lloyd's have reached Wall-st
and show the situation to De
more serious than appeared in the
Hrst reports which came To New York
in the press cables. This famous LoE
don society, which has been writing
insurance for nearly 500 years, is
made up OF independent underwriters.
often working In groups. Ii Is now
learned that one of the largest OF
these groups or underwriting syndi-
Gates is facing losses estimated be.
tween s1.600000 and $2.1Oo,00O.
against which the security on depos-
IL with the trustees OF Lloyd's amounts
10 only 100000.
Mary OF the New FORK banks are
directly interested in the situation.
having been accustomed to accept the
security afforded by the Lloyd's poll
cies without question, and since the
facts Of the trouble Ia London have
become known here those who hold
policies under the names OF the syndi-
cate In difficulties have been making
haste TO cover by reinsuring.
System Followed by Lloyd's.
Under the English system the
Lloyd's underwriters, instead OF carry.
Ing large funds OF invested capital and
surplus carefully conserved by state
laws. as in this country. back their
policies only with their personal credit
plus the sum of $1,000 deposited with
the trustees OF the society by each
member on his election, together with
whatever balance of premiums they
may have.
In the case OF the syndicate, COM
posed OF about eighteen members,
whose troubles have just become
known. not only has the security de-
posted with the society been wiped
out by its losses, but il Is stated that
seven OF the members will be unable
to take up their pro-rata share OF the
losses
The trustees OF Lloyd's conduct
their affairs with such secrecy that
there are no published accounts avail
able to show New Workers or those
who hold the policies OF this syndi-
cate how far the credit OF the remain
Ing members will serve to take up the
losses. In any event, since there Is
no joint liability, the solvent mem
bers will be liable for only their pro-
rata share. The amount OF this rein
surfing which will have to be done
may be estimated from the fact that
the liabilities accepted annually by
this group are placed at between
$150,0O0,0O0 and $2O0,0O0,000
A large number OF these policies
have been taken out on Canadian
mill properties. and insurance on com
modify shipments have been widely
accepted by banks here and in the
west in connection with bills OF ex-
change. Another branch OF insurance
In which this syndicate has largely
participated In this country has
been the writing OF automobile poll
cies, and IL has also taken on a great
many extra-hazardous fire risks.
The situation is further clouded by
the same lack OF Information about
the standing of other syndicates In
.ioyd's whose credit so far has nut
been impeached. Up 10 n few
weeks ago the group of "Lloyd's
names" now admittedly In trouble was
counted among the strongest in the
society. and Its policies have been &C
cepted In this country without ques-
tion.
Revelations No Surprise Herr.
New York insurance men hnve not
been astonished at recent revelations
OF shakiness In the world-famous Lon
don agency. Lloyds policies. by rea.
son OF the freedom of the London un-
dcrwriters from legal restrictions.
have been increasing competitors In
the American field. In this country.
where insurance Is restricted to char
tered corporations whose investments
a-e subject to severe legal restrictions
and with the additional requirements
OF taxes, amounting TO two per cent
in this state. on business done. un-
derwriting profits have been heavily
cut into by the necessity OF meeting
I.loyds competition.