Lloyd’s Chairman Sax Riley is expected to announce later this week changes involving thousands of “inactive” Lloyd’s Names who want to get out of the market, but are waiting for their syndicate to shut up shop. Until this happens, these people remain members at Lloyd’s, and have the power to vote.

The modernisation strategy is contained in a 56-page consultation document, which has been sent to 16,000 businesses and individuals. It details the modernisation of the Lloyd’s structure by replacing the market’s regulatory and market boards and committees with a single “franchise board”. Lloyd’s will act as a franchisor in the management of the marketplace, with the managing agents as franchisees.

The outdated three-year accounting system will be replaced by more conventional annual accounting that conforms to modern standards of transparency.

And a new “vehicle” will be devised for Names to participate in the market after January 2005. Names will continue to have the opportunity to support businesses in the market on a contractual basis. A number of options will be considered with the objective of retaining key features of the Names’ current trading status. Names will be able to participate in syndicates in the same way as they do today, up until January 2005. They will receive a cash sum for any necessary compensation.

There will be an end to unlimited liability and the annual venture. No new unlimited liability Names will be accepted, and existing Names who wish to continue underwriting will convert to limited liability by January 2005.

Mr Riley the proposals “are sweeping, but sensible. They represent the best opportunity of transforming Lloyd’s into a modern, transparent and profitable market.

“Everyone involved in this market, from investors to policyholders, wants to do business in a competitive and disciplined environment. No one wants a repeat of the substantial losses we have had in recent years. So standing still has never been an option.

“Businesses inside the market are now uniting around a common goal of reform. And now is the time to reform – trading conditions are at the strongest they’ve been in a decade and investment is at an unprecedented high, with record capacity of over $18 billion.”