Which legislation established the Society of Lloyd's as a formal insurance market?

The Lloyd's Act of 1871 is significant as it laid the foundational legal framework for the operation of the Society of Lloyd's as a formal insurance market. This legislation officially recognized Lloyd's as a marketplace where underwriters could pool their resources to share risks and support each other in underwriting insurance policies.

Prior to this Act, Lloyd’s was already functioning in a more informal capacity, primarily as a marine insurance market. The 1871 Act established clear regulations and protections, setting the course for Lloyd's evolution into a structured and recognized entity in the insurance industry. It also provided a means to regulate the activities of Lloyd’s members and the types of insurance they could offer.

The other options, while related to insurance regulation and market operations, do not have the same historical significance in establishing Lloyd's as a formal entity in the insurance marketplace. Therefore, the Lloyd’s Act of 1871 is acknowledged as the pivotal legislation that created a structured foundation for what became one of the world’s leading insurance markets.