In Halbower v. Hiscox Syndicate 33 of Lloyd’s of London, No. 25-1152 (6th Cir. May 29, 2026), the panel unanimously remands an insurance dispute to reconsider diversity jurisdiction where the defendant is a Lloyd’s of London “Syndicate,” an unincorporated group of underwriting members. The panel, nevertheless, splits over the proper analysis.
Syndicates are loose associations of entities at Lloyd’s through which parties may “engage in underwriting, that is, negotiating a fee to be paid in exchange for taking on financial risk held by another.” Distinct from a conventional insurance company, Lloyd’s functions as “a marketplace where brokers place risks with underwriters.”
A group underwriting the same risk at Lloyd’s is called a Syndicate. “A Syndicate, however, has no legal identity and is not a partnership under British law.” Each Syndicate also appoints a Managing Agent, who has administrative responsibility but “is not an underwriting member of the Syndicate and thus does not carry liability.”
Plaintiff Halbower, a trustee of her family trust, made claims on five artworks lost in a house fire, a risk allegedly underwritten at Lloyd’s. The Managing Agent (Hiscox) acknowledged coverage of three of the works, while denying coverage for two on the ground that they “were not included in the schedule ‘held on file by the Lloyd’s Broker.’”
Plaintiff sued the Syndicate in Michigan state court. “Hiscox removed the case to federal court,” citing diversity jurisdiction, 28 U.S.C. § 1332(a)(2). The district court then granted Hiscox’s motion to dismiss for failure to state a claim, “concluding that the Halbowers’ insurance policy extended only to works included in a list held by the Lloyd’s Broker.”
The Sixth Circuit vacates and remands. Instead of addressing the merits, the panel takes up a possible defect in diversity jurisdiction, i.e., the failure to allege the citizenship of each member of the Syndicate.
“Defendant Hiscox, a foreign entity, does not easily align with our traditional conceptions of corporate structures. Hiscox is neither a corporation nor a partnership, nor does it have a ‘legal personality’ under British Law . . . . Rather, it is a group of Names, each of whom carries several liability, that ‘operates pursuant to a profit and loss sharing agreement . . . much like an investment fund’ . . . . In this respect, Hiscox functions in ways similar to an unincorporated association.”
“[W]e assess an unincorporated association’s citizenship based on the citizenship of each of its members . . . . Assessing diversity jurisdiction thus requires us to review the citizenship of each of the underwriting Names of the Syndicate, Hiscox, listed on the policy at issue.” The panel thus remands the case to the district court “to make the necessary citizenship determinations.”
The panel majority rejects the Syndicate’s argument that diversity is determined by the Managing Agent’s citizenship, as implied by Certain Interested Underwriters v. Layne, 26 F.3d 39 (6th Cir. 1994).
“We read Layne to hold that, for purposes of diversity jurisdiction, where the Syndicate is not listed on the insurance policy in question, only the citizenship of the plaintiff-Underwriters (as opposed to all underwriters in the Syndicate) is relevant. At issue in Layne was how to ‘determin[e] whether there is complete diversity of citizenship’ when not all members of a Syndicate are plaintiffs in the litigation, and those that are—the certain plaintiff-Underwriters— do not purport to belong to or represent any Syndicate.”
“We take no position on whether Layne’s holding as to the unusual contract at issue there was correct, let alone attempt to dislodge that holding . . . . What matters for today’s purposes is that Layne did not purport to answer the question of how to assess the citizenship of a Lloyd’s Syndicate.”
Concurring in the judgment, Judge Bush suggests a different analysis focused on the real party in interest. Because “the syndicate and underwriting agent have a principal/agent relationship, with the syndicate being an undisclosed principal . . . . we must ask whether, under the agency law of the State in which the district court sits (here, Michigan), the syndicate or the underwriting agent is liable on the policy.” Here, “Hiscox is the real party in interest. Because the district court’s diversity determination was based on the underwriting agent instead of Hiscox, this court must vacate and remand.”
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