Please ensure Javascript is enabled for purposes of website accessibility
Home / Today's Top Stories / Plaintiffs in Lloyds case
get restraining order

Plaintiffs in Lloyds case
get restraining order

Lloyd’s of London syndicate members in Rochester have obtained an order in state Supreme Court here stopping the hoary English insurance company from taking any more of their money.
State Supreme Court Justice Thomas Stander yesterday signed a temporary restraining order preventing Lloyd’s from seizing collateral 19 Rochester-area individuals put up to become Lloyd’s “names.” The order also directs banks not to pay out sums to the British insurance firm.
Lloyd’s names agree to become members of a syndicate that writes insurance policies and thus share in Lloyd’s’ profits. They also agree to personally underwrite a portion of risk their syndicate insures.
A more than 300-year-old firm, Lloyd’s was among the first insurance companies in the world, and long was considered a rock-solid institution.
Until recently, becoming a Lloyd’s name meant almost sure profit with small risk. But over the past several years Lloyd’s payouts have far exceeded its income, and the company started hitting up names for large sums to cover its losses.
The 19 Rochester-area Lloyd’s names filed suit against the British firm Monday, seeking the return of some $10 million they say the insurance company fraudulently took from them.
One party to the action, Frank Luellen, a Lloyd’s name since 1983, said profits he made from 1983 to 1987 were more than wiped out by money Lloyd’s demanded in subsequent years. Luellen declined to reveal the amount representing his personal share of the $10 million. He said he is still a name but stopped underwriting any Lloyd’s risk in 1993.
The suit alleges that Lloyd’s agents sold syndicate memberships to Luellen and others without fully revealing the risks the new names assumed. It further claims that the memberships actually are securities and should have been registered as such under New York law.
Attorney John LaFave of Fix, Spindelman, Brovitz, Turk, Himelein & Shukoff described Lloyd’s’ structure as similar to a pyramid scheme in which agents resold syndicates’ risk to unsuspecting newer names.
Fix, Spindelman is representing the 19 Rochester names.
The state Supreme Court action follows an attempt by a coalition of regulators from a number of U.S. states including New York to negotiate a settlement on behalf of U.S. names.
The group recently returned from England with an offer from Lloyd’s to take 15 percent off the amount it says U.S. names owes.
Luellen called the offer woefully inadequate.
State Sen. Richard Dollinger, D-Brighton, said he had been contacted by the Rochester-area names, and has written a letter to state Attorney General Dennis Vacco urging that Vacco withdraw New York’s support for the settlement and that the state join the Rochester names’ suit against Lloyd’s.
Vacco could not be reached for comment.

Plaintiffs in Lloyds case
get restraining order

Lloyd’s of London syndicate members in Rochester have obtained an order in state Supreme Court here stopping the hoary English insurance company from taking any more of their money.
State Supreme Court Justice Thomas Stander yesterday signed a temporary restraining order preventing Lloyd’s from seizing collateral 19 Rochester-area individuals put up to become Lloyd’s “names.” The order also directs banks not to pay out sums to the British insurance firm.

x

Check Also

Initiative seeks to support emotional health of children of color (access required)

Sara Taylor knows firsthand that navigating the complex mental health system in support of one’s children can be tricky, and that is especially true for people of color.   

Veterans Outreach Center presents Service Provider Awards (access required)

The Veterans Outreach Center hosted its annual Service Provider Awards Ceremony Wednesday morning recognizing three organizations that have provided significant ...