Talk these days to a Lloyd's insurance broker, one of those near-legendary risk-takers who insure ships, oil rigs, planes, cars, trucks, and people around the world, and you will find him a worried man.
You will also find him defending the Lloyd's market, the biggest single insurance mart in the world - and you will find him anxious to reassure the United States that Lloyd's will emerge stronger from its current wave of crises.
At risk now is the Lloyd's reputation for integrity and self-regulation built up ever since men swapped information in Edward Lloyd's London coffee house 300 years ago.
Allegations are that two Lloyd's brokers and a number of prominent, internationally known underwriters have been involved in a network of malpractice that has seen almost (STR)60 million ($96 million) secreted in private bank accounts at clients' expense.
Prime Minister Margaret Thatcher and the governor of the Bank of England, Gordon Richardson, are both urging Lloyd's to reform, quickly, using a 1982 act of Parliament as the basis.
The head of one leading Lloyd's brokerage house sat in his elegant, paneled office the other day and freely admitted that Lloyd's needed to act quickly.
''People are not losing their insurance cover,'' he insisted, ''but the market's engine is stuttering. Someone has put sugar in the petrol, and we're all inside a chassis built more than 100 years ago.''
He was referring to the 1871 act of Parliament that governs Lloyd's until January 1983, when this year's act takes effect. The old act gave few regulatory powers: The new act greatly strengthens the Lloyd's hand, but it has been a long time coming.
''The wealth behind a Lloyd's premium is still the most in any world market, '' he said. ''Normally, an insurer must have (STR)100 worth of assets to back (STR)400 worth of premium income. Here at Lloyd's we offer much more protection. Here, you need (STR)100 of wealth for every (STR)200 of premium you support.
''You must prove to us that you have (STR)50 of the (STR)100 on hand, and you must deposit with us (STR)25, which we invest for you.''
At the same time, it is the way that some underwriterq have behaved that has caused the current crisis. ''Lloyd's is like a barrel of apples with a few bad ones inside it,'' the broker went on. ''They thought up a wicked wheeze, one that is as old as the hills.''
Essentially, underwriters were accepting large risks, then reinsuring with overseas companies in which they themselves held a large interest, or which they controlled.
The amounts of diverted reinsurance were small compared to original premiums written and went unnoticed for six or seven years. But Lloyd's says it has information suggesting that one underwriter alone, Ian ''Goldfinger'' Posgate, was involved in diverting tens of millions of pounds. Other allegations under police investigation claim that five underwriters piled up millions of pounds in companies they controlled in Panama and Liechtenstein.
Alleged irregularities began to come to light when a US company, Alexander and Alexander, took over a prominent broker called the Alexander Howden Group and launched a routine financial inspection.
As a result, the US company dismissed five Howden directors and alleged that they had taken a total of (STR)34 million ($55 million) in reinsurance premiums.
This led to another series of allegations in the affairs of a broker called Minet Holdings. These say that (STR)24 million ($38 million) were misappropriated.
Lloyd's also faces other claims. One is that some of its brokers charge clients double or triple the actual premiums charged by underwriters and pocket the difference.
Faced witxPx h zz o/d's has: suspended Mr. Posgate, who immediately sued for wrongful suspension; stopped a large marine underwriting company from writing any new business; suspended one of Minet's managing agents; and in recent days, fired back at critics in the US, where it gathers half its $4 billion worth of premiums every year.
The insurance superintendent of New York State, Al Lewis, and Illinois investigator Bill Allen, claim Lloyd's dragged its heels on the Kenilworth case. (Kenilworth, a Chicago Insurance Company, went bankrupt in April 1982. A number of Lloyd's members had done business with it.)
In a statement circulated in the House of Commons Dec. 9 and confirmed to this newspaper Dec. 10, Lloyd's claimed it had cooperated fully with Mr. Allen and had a letter of thanks from him on file in the US. Lloyd's says it first warned the US about Kenilworth last February, but US officials themselves had been slow to act.
''The question is, will US oil men insure their rigs and offshore platforms with us next year?'' asked the broker. ''Will US and other shipowners insure with us? There has to be a risk of a loss of confidence.''
His answer is that there are plenty more Lloyd's specialists in their fields, all able to underwrite business flexibly and quickly.