The Detroit times., 1908-08-06
SYNDICATE
FACES HEAVY
LOSSES
ONE OF THE BIG GROUPS IN IA
NOUS SOCIETY is REPORTED
TO BE IN SERIOUS FINANCIAL
DIFFICULTIES.

NEW YORK. Aug 6.-The Times
says:
Details OF the financial troubles of
some OF the underwriters in the Lon
don Lloyds have reached Wall-st.
and show the situation to DE
more serious than appeared in the
first reports which came 10 New York
in the press cables. This famous LOr
don society, which has been writing
Insurance for nearly 800 years, IS
made UP or Independent underwriters.
often working in groups. IL Is now
learned that one OF the largest OF
these groups or under writing syndi-
Gates is facing losses estimated be-
tween s1,600.000 and S2,100.000,
against which the security on depos-
IL with the trustees OF Iloyd's amounts
TO only S4O5. 900.
Many or the New York banks are
directlya 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 in 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 $4,000 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 II 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 10 show New Workers or those
who hold the policies OF this syndi-
cate how far the credit OF the remain
ing members will serve 10 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
100000 and 5000, 100000
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 1t 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
..loyd's whose credit so far has not
been impeached. Up TO few
weeks ago the group of ''Lloyd's
ndIutb HOW duiiilbcuiJ liOuoic VoS
counted among the strongest In the
society, and its policies have been &C
copied in this country without ques-
ton.
Revelations No Surprise Hem.
New York insurance men have not
been astonished at recent revelations
OF shakiness In the worldfamous Lon
don agency. Lloyds policies. by rea-
son OF the freedom of the London un-
derwriters from legal restrictions,
have been increasing competitors In
the American field. In this country.
where insurance Is restricted to char
tered corporations whose investments
ere 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
cnt into by the necessity OF meeting