LONDON-Lloyd's of London is losing its only active captive insurance syndicate, but the market still hopes to welcome new companies interested in forming captives within Lloyd's.

Pharmaceuticals giant GlaxoSmithKline P.L.C. put its Lloyd's captive syndicate 1250 into runoff last month, a Lloyd's spokesman said, stressing that the move did not spell the end for captives at Lloyd's.

The captive, formed by SmithKline Beecham P.L.C. in December 1998, was the first-and, so far, the only-captive syndicate to be set up at Lloyd's.

In March, Richard Reddaway, vp for corporate risks and risk management at GlaxoSmithKline in London, confirmed that the company was reviewing its captive operations as part of a broad overview of its risk financing programs following the merger that created the current company.

When SmithKline Beecham merged with London-based Glaxo Wellcome in December 2000, the newly merged company gained captive operations in Bermuda and Guernsey in addition to the Lloyd's captive.

One captive manager suggested that, after the merger, it was inevitable that GlaxoSmithKline would rethink its captive operations at Lloyd's.

The GlaxoSmithKline captive wrote nonmarine general liability, pecuniary loss and motor business for its parent. Its capacity was reduced to L16 million ($23.9 million) for 2001 from L25 million ($40.4 million) the previous year. It was managed by Wellington Underwriting Agencies Ltd., which took over its management in December 2000, when former manager PXRE Managing Agency withdrew from Lloyd's.

Provisions to allow captive syndicates to operate at Lloyd's were established in 1998, and the SmithKline captive was admitted in December of that year. It began business on Jan. 1, 1999.

The advantages to setting up a Lloyd's captive include Lloyd's international licenses and high marketwide claims-paying ability ratings, captive experts noted.

Max Taylor, then-Lloyd's chairman, welcomed the move.

"We are extremely pleased to welcome SB to Lloyd's, and we expect to see other companies establishing captives at Lloyd's," he said in a statement. "We believe that the introduction of captive syndicates will generate substantial additional opportunities for the existing market."

Since then, however, no other captives have been set up at Lloyd's. The Lloyd's spokesman dismissed reports suggesting that GlaxoSmithKline's withdrawal would end the captive experiment at Lloyd's. He explained that Lloyd's captive program was "effectively on hold," pending the results of a chairman's working group review of the entire market. The conclusions of this review are expected in October.

"We are not actively promoting captives at the moment because of the review," the spokesman said.

But he added that if a company were to approach Lloyd's about setting up a captive, it would be welcomed.

Chris Aujard, head of development projects at Lloyd's, the team charged with setting up Lloyd's captive program, stepped down last month.

The Lloyd's spokesman said Mr. Aujard's resignation was the result of a restructuring within Lloyd's and was not related to the withdrawal of the captive.