Lloyd’s to revamp ‘unclear’ conduct code

Lloyd’s has announced plans to overhaul its rules for members’ conduct, which it has said are currently “unclear”.

The announcement follows criticism of the market’s standards in recent years. In 2022, Lloyd’s issued a £1m fine to one of its syndicates, Atrium Underwriters, for its mishandling of a bullying and harassment case.

And in 2019, a survey of Lloyd’s employees found that nearly one in 12 had witnessed sexual harassment over the previous 12 months.

The proposed framework will focus on five stated objectives: ensure better alignment with member firm’s own disciplinary processes; recognise member firms’ ability to resolve issues without intervention from Lloyd’s; provide more clarity on behaviour that Lloyd’s considers unacceptable; align Lloyd’s oversight and enforcement functions; improve Lloyd’s internal decision-making process.

“Our current processes for dealing with issues of poor conduct can be unclear and may cut across firms’ own intervention processes,” stated the consultation document. “There also needs to be greater certainty as to potential outcomes.”

The proposals also set out a “non-exhaustive list of types of conduct” covered by the framework, which includes a number of non-financial acts including harassment, abuse of power, conducting Lloyd’s business under the influence of alcohol, and bringing the Lloyd’s market into disrepute.

There are also a number of proposed changes to enforcement byelaws in order to provide greater clarity as to what constitutes “misconduct”.

“While we intend to retain the main categories of ‘discreditable’ and ‘detrimental’ conduct, we propose to introduce a new category of ‘improper’ conduct and to define more precisely what those terms mean by incorporating into the byelaw the behaviours set out above as non-exhaustive examples of cases that may lead to enforcement action,” stated the proposal.

Lloyd’s is looking for industry responses to the proposals by mid-December.