Editing Lloyd's of London (section)

====Dilution of liabilities and the consequences====
It was alleged that in the early 1980s some Lloyd's officials began a recruitment programme to enroll new Names to help capitalise Lloyd's prior to the expected onslaught of APH claims. This allegation became known as "recruit to dilute": in other words, recruit more Names to dilute the losses. When the huge extent of asbestosis losses came to light in the early 1990s, for the first time in Lloyd's history large numbers of members either were unable to pay the claims or refused, many alleging that they were the victims of fraud, misrepresentation, and/or negligence. The opaque system of accounting at Lloyd's made it difficult, if not impossible, for many Names to understand the extent of the liability that they personally and their syndicates had subscribed to.

Also, numerous underwriters of long-tail non-marine business, concerned at their exposures to the impending asbestosis crisis, had sought to reinsure their liabilities with other carriers. Approximately 20 syndicates, including Lloyd's deputy chairman Murray Lawrence's, paid millions of pounds in premiums to Richard H. M. Outhwaite, then considered a highly capable marine underwriter, to assume approximately 80 per cent of the market's asbestos exposure on his well-supported syndicates 317/661 in 1982.<ref name=Hodgson/> In 1985, under Lloyd's three-year accounting rule, auditors kept Outhwaite's 1982 year open, citing concerns over asbestos and pollution liability losses. These eventually ran into the hundreds of millions of dollars. After many years of litigation, Outhwaite retired to [[Guernsey]] and died on 20 November 2021.<ref>{{Cite web |title=Richard Henry Moffitt OUTHWAITE {{!}} Family Notices from the Guernsey Press |url=https://www.familynotices.gg/moreinfo/78770/outhwaite |access-date=2024-01-25 |website=www.familynotices.gg |language=en}}</ref>

Another asbestosis-hit operation, Pulbrook syndicates 90/334, had taken out reinsurance in 1981 on its general liability business with Merrett syndicate 418; however, in 1990 Stephen Merrett (who by now controlled Pulbrook) won an arbitration ruling to void that arrangement due to non-disclosure of the extent of asbestos exposure, leaving the Pulbrook Names without cover for their losses of £100,000 each on average. Even earlier, in 1974, the underwriter of R. W. Sturge syndicate 210, Ralph Rokeby-Johnson, who specialised in American industrial risks, bought "stop-loss" reinsurance from [[Fireman's Fund Insurance Company|Fireman's Fund]] and [[Kemper Corporation|Kemper Insurance]] in the US on Sturge's pre-1969 exposures that were accumulating into the present. This contract developed so poorly that Fireman's Fund later sought its own stop-loss cover for the losses assumed from Sturge. Rokeby-Johnson later prompted Lloyd's to create a [[working group|working party]] on asbestosis.<ref name=Luessenhop/>