Lloyd's of London is an organization that has provided insurance worldwide for more than 300 years. The organization has a reputation for handling either very expensive or exotic types of insurance.

Surprisingly, Lloyd's is not an insurance company. It is made up of more than 3,000 active members. Memberships consist of the underwriters, the insurance brokers who bring them business, and the investors known as "names" or syndicates.

The history of Lloyd's begins at Edward Lloyd's coffeehouse in 1688, where he attracted a clientele of merchants, particularly ship owners with vessels and cargoes needing protection. Mr. Lloyd's establishment quickly evolved into a meeting place where businessmen sought brokers to place insurance with wealthy, reputable men. Character and integrity were important because the persons (called underwriters) who agreed to invest in the ships and cargoes put their personal fortunes at risk in order to pay their share of any claim. If a ship's voyage was successful, the underwriter would share in the profits.

Lloyd's of London has long been identified with British history and the growth of worldwide commerce. It is an international insurance market, located in London, whose members cooperate with each other, compete with each other and, of course, compete against other insurance organizations. There are four major markets at Lloyd's: Marine, Non-Marine, Aviation and Motor.

Historically, a policyholder with a valid claim could be certain that the claim would be paid, whatever the cost to the member who accepted the risk. Formerly, every underwriting member was responsible up to the full extent of his personal assets for his share business. If his personal assets were not enough, Lloyd's would make any deficit out of its reserve funds.

Today, Lloyd's liability is more conventional, limited in the same manner as traditional insurance companies. The change was necessary due to its long-term problem in handling losses associated with asbestos claims. Lloyd's capacity to write business in the global marketplace is still substantial and makes it likely that Lloyd's will continue to be an important part of the insurance market.

There are syndicates that are being proposed at different times to replace insurance. We should look a little deeper than just the surface when considering this avenue to save "short" term dollars.

Lee is a Linton insurance agent and can be reached by telephone at 847-3237 or by e-mail at www.TheChoiceIns.com .