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LONDON-In what it says is an effort to boost security for policyholders, Lloyd's of London plans to increase the minimum capital requirements of its individual investors.

Proposals last week would require names to increase their minimum total means-the personal wealth which they must show in order to join Lloyd's-in two increments, so that by 1999 their minimum capital requirement matches the 50% required of corporate investors.

Andrew Duguid, director of strategic planning at Lloyd's, said that the proposals are the result of a survey of brokers and a review into how security offered to policyholders could be improved.

These led to the conclusion that "the more money that's up front in the system, the better it is as far as the policyholder is concerned," Mr. Duguid said.

He acknowledged that any increase in the amount of capital names must put up to support their underwriting will be seen by some as an attempt by Lloyd's to drive names out of the market in favor of corporate providers.

Already since corporate capital was admitted in 1994 its share of underwriting capacity has increased to 44% from 15%, and earlier this month Michael Wade, the chief executive of one corporate capital vehicle, CLM Insurance Fund Ltd., called for an end to the system of investment by names.

However, Mr. Duguid emphasized that the measures are not intended for this purpose, but are designed solely to increase Lloyd's security. He also said that the financial effect on names should not be "in any sense dramatic," though they might cause some to reduce their underwriting capacity.

But Robert Miller, representing the Assn. of Lloyd's Members, attacked the proposals as "totally unacceptable," saying they would be strongly opposed by the ALM. He said the changes do not take account of names' ability to pay and would be likely to squeeze out smaller names.

Lloyd's expects the measures to be in place in time to take effect in 1998.

Under the proposals, Lloyd's would introduce a "minimum capital requirement" made up of a "funds at Lloyd's" requirement and an "other personal wealth" requirement. The goal is by the year 1999 to raise name's minimum capital requirement to 50%, the same percentage required of corporate members.

Whereas now names must hold funds at Lloyd's equal to about 25% to 30% of the total business they back, Lloyd's plans to raise this to 32.5% in 1998 and to 37.5% in 1999. The remainder will come from the other personal wealth requirement, which would be 7.5% in 1998 and 12.5% in 1999.

Also, names' minimum total means will be raised from its current level of British pounds 250,000 ($428,125) to British pounds 300,000 ($513,750) next year and British pounds 350,000 ($599,375) in 1999.

Lloyd's is currently negotiating with the U.K. Inland Revenue to ascertain whether the New Special Reserve Fund, into which names deposit some of their profits free of tax as reserves against possible losses, can be applied toward an individual's capital requirement. The fund is currently worth more than British pounds 60 million ($102.8 million).

Other proposals include:

Mandatory actuarial assessment for solvency purposes of the adequacy of reserves of all syndicates from year-end 1997. This is required already in the United States.

Introduction of central monitoring of reinsurers and reinsurance and consistent accounting treatment to highlight potential reinsurance bad-debt problems. Lloyd's would also provide guidance on selecting reinsurers, though Mr. Duguid said this was unlikely to result in a list of "approved" reinsurers.

Greater focus at syndicate level on disaster modeling.

Introduction of codes for reserving to be developed with input from those acting in the Lloyd's market.