EC probes Lloyd's of London

Lisa Buckingham12 April 2012

AN inquiry into the Lloyd's of London insurance market has sparked a row between the Treasury and the European Commission. The EC is investigating the regulation of Lloyd's and has asked for information from the Treasury.

Brussels officials say the Treasury has insisted that evidence it hands over should be kept secret. But the Treasury denies it wants such restrictions. It says some papers should be kept under wraps for commercial reasons, otherwise they can be made public.

But an email from an official involved in the EC investigation as well as a letter from EC president Romano Prodi make clear that the Government has specifically refused to waive its right to secrecy.

The email from Mike Thorn of the EC says that in a letter of 3 December, 'the UK permanent representative to the EU confirmed that . . . the UK did not wish to waive its right to the confidentiality of documents . . . in connection with this investigation.' Prodi's letter says he cannot order the release of crucial evidence from the Government 'unless the UK authorities waive confidentiality'. They had not done so.

The Government's evidence to the inquiry is regarded as crucial to the case of many Lloyd's investors, or Names, who are fighting against paying their share of losses in the market.

They argue that Lloyd's was not properly regulated by the Government because auditors have admitted they could not properly assess the insurer's liabilities for asbestosis claims.

John Pascoe, the investor who has pressed for the EC investigation, said: 'This is just like the Matrix Churchill affair - the Government has the information we need but won't let it see the light of day.'

Whitehall has denied it wants to cut a secret deal with Europe over the affair. It must make its submission to the investigation by next month.

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