LLOYD'S OFFERS CASH IN BID TO END PCW AFFAIR
Lloyd's of London has offered to meet
part of the 235 mln stg in claims that investors in PCW
Underwriting Agencies face due to fraud and mismanagement,
chairman Peter Miller said at a press conference.
    Miller urged 3,000 PCW members to accept the offer so that
the five-year-old affair could be closed.
    The members have until May 30 to accept the offer,
involving a 103 mln stg payment by Lloyd's and some of Lloyd's
underwriters in exchange for a 34 mln stg contribution from PCW
members, he said.
    Miller said that at end-1985, PCW syndicates had gross
liabilities of 680 mln stg.
    To offset this, they had assets, including cash and
payments from reinsurance policies on some of the risks
underwritten by the syndicates, of 445 mln stg, leaving net
liabilities of 235 mln, he said.
    The total sum on offer, including a 48 mln stg payment from
Lloyd's 311 mln stg contingency fund and 55 mln stg from
Lloyd's brokers who could otherwise face court cases for their
involvement in PCW, is designed to cover the full reinsurance
cost for those 235 mln stg of net liabilities, Miller said.
    Under the offer, which requires 90 pct acceptance, Lloyd's
itself would take over all members' future obligations
connected with the PCW syndicates, Miller said. Members would
have to agree not to pursue the matter in court.
    Miller said a rejection of the offer would probably lead to
protracted litigation in court which, even if succesful for
members, was unlikely to produce a better deal for them.
    He added that acceptance would mean members could continue
underwriting in the Lloyd's market and qualify for tax relief
on the cash payments they would make towards the settlement.
    Miller denied that PCW members would face bills of over
200,000 stg.
    He said only 34 members would be asked to pay between
100,000 and 200,000 stg, and about 100 between 60,000 and
100,000 stg. Special arrangements would be sought for those who
accept the offer but are unable to pay.
    Miller said the offer did not imply Lloyd's accepted
responsibility for the affair, uncovered in the late autumn of
1982 when "it became quite clear that (PCW agency founder) Peter
Cameron Webb and (his partner) Peter Dixon had perpetrated
theft upon members," he said.
    Part of the sum involved was subsequently recovered and
repaid to members, but Cameron Webb and Dixon left the affairs
of PCW syndicates "in a state of chaos which led to a sharp
deterioration of their underwriting results," Miller said. Both
were fined by a Lloyd's disciplinary committee and expelled
from membership.
    He said Lloyd's would continue to seek reparation in
British and U.S. Courts "with the utmost vigour ... To bring to
a close one of the most shameful episodes in the history of
Lloyd's," and was contemplating claiming the full amount of the
settlement now on offer from Cameron Webb and Dixon.
    In a reaction, insurance brokerage Sedgwick Group Plc
<SDWK.L> said it supported Lloyd's proposals and had
contributed 10 mln stg towards the proposed settlement.
    It said in a statement, "as largest broker in the Lloyd's
market, the company has an essential interest in maintaining
the reputation of the market. That reputation has been damaged
by problems at PCW and will continue to be so as long as they
remain unresolved." It had contributed to the proposed
settlement to avoid costs related to the defence of some of its
subsidiaries which had been named as potential defendants to
litigation by PCW members, it said.
 Reuter
