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Lloyd’s of London is consulting on changing its byelaws to crack down on misconduct in the centuries-old market as it seeks to dispel a reputation for sexual harassment and inappropriate behaviour by market participants.
In a consultation published on Thursday, Lloyd’s — made up of more than 50 insurers and hundreds of brokers — accepted its current processes for dealing with misconduct were “unclear”. Its processes might cut across firms’ own intervention processes and there needed to be “greater certainty” as to the potential outcomes, it added.
The proposed changes included a new, non-exhaustive list of unacceptable behaviour, including harassment or bullying and discrimination.
One proposed rule change would outlaw “conducting Lloyd’s business when under the influence of alcohol where it leads to unprofessional behaviour”.
The proposals would also outlaw business conduct such as acting dishonestly.
Lloyd’s proposed to clarify in the byelaws that it was not necessary for the market to demonstrate that it had suffered harm “at an institutional level” for misconduct to have occurred.
“Some conduct (for example, illegal drug-taking, harassment or bullying) is inherently unacceptable by its very nature and ought to be actionable as such,” the consultation continued.
Lloyd’s, long associated with a male-dominated drinking culture, has struggled to stamp out personal misconduct within the market.
Two years ago, it issued its first fine for non-financial misconduct against underwriter Atrium for behaviour that included the sexual harassment of female staff on an annual “boys’ night out”. Lloyd’s revealed in 2019 that almost 500 people working in the market had witnessed sexual harassment.
Market participants have become increasingly concerned that conduct such as bullying can fall below the current threshold for barring firms and individuals. That covers behaviour that can bring the broader market into disrepute.
Mirroring rules set 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.
But Lloyd’s said in the consultation that it would not seek to become “more directly interventionist” and would instead rely in the first instance on firms within the market to police behaviour. The consultation set out a proposed process for how it would decide when action was needed by the institution itself.
Lloyd’s said in the consultation that it would not tolerate any insurer that was classified as underperforming because of poor culture. If remediation steps were not taken, it would consider “taking action to remove that firm’s permission to operate within the Lloyd’s market”, it added.
Sheila Cameron, chief executive at the Lloyd’s Market Association, which represents the insurers in the market, welcomed the consultation and said it looked forward to hearing a “broad spectrum of views” on the proposals.
