Lloyd’s of London is looking at introducing a ‘suite of changes’ to better deal with misconduct.
The insurance market, consisting of more than 50 insurers and hundreds of brokers, has at times been associated with a culture of alcohol and episodes of poor behaviour after work.
In early 2022 heavy drinking, initiation games and sexual comments about female colleagues led to Lloyd’s fining one of its member firms – Atrium Underwriters – £1 million.
In 2019 in emerged that almost one in 12 workers at Lloyd’s of London had witnessed sexual harassment in the previous year, leading to measures to more efficiently deal with allegations.
Despite new levels of oversight of conduct, market participants have reportedly become aware that issues such as bullying can fall below the threshold for barring firms and individuals.
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Lloyd’s management is now consulting on a new framework for dealing with behaviour that is aimed at ensuring better alignment with firms’ own internal HR and disciplinary processes, supporting firms’ ability to investigate their own employees and to address issues themselves.
A new, non-exhaustive list of unacceptable behaviour, including harassment or bullying and discrimination could be applied under the changes.
One proposed rule change would outlaw “conducting Lloyd’s business when under the influence of alcohol where it leads to unprofessional behaviour”.
The framework will provide more clarity over the types of conduct that Lloyd’s considers unacceptable and to set out when and how Lloyd’s will intervene. Lloyd’s will encourage managing agents and syndicates to investigate and resolve issues themselves according to its Culture Principle, a means of acquiring oversight over culture and performance.
A further change could see Lloyd’s improvements to enforcement functions and internal decision-making processes, so that decisions can be made in a more timely and consistent manner, while also preserving necessary procedural safeguards.
Mirroring rules laid down by the UK’s Financial Conduct Authority, Lloyd’s also proposes to make clear that behaviour that is outside work but in the presence of other market participants will be in scope of its rules.
The consultation stated that Lloyd’s would take measures against any insurer that was judged to be underperforming because of poor culture. This could lead to action to “remove that firm’s permission to operate within the Lloyd’s market”.
The Lloyd’s Market Association, which represents insurers, said it welcomed the proposals.
Responses to the consultation should be provided by 16 December 2024.
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