LONDON (Bloomberg) ? Lloyd's of London, the 300-year-old insurance market, should reduce costs and improve its services to compete with other insurance markets, the UK's financial-services regulator said.

"It is difficult to see how London can retain its pre-eminent reputation as the optimal platform of choice for wholesale and commercial insurance" without becoming more efficient and orderly, Financial Services Authority chief executive officer John Tiner said in an e-mailed statement yesterday.

Lloyd's chief executive Richard Ward, 49, is implementing a three-year plan to cut costs for insurers and prevent regions such as Bermuda and Dublin from gaining market share.

Hiscox Plc, Amlin Plc and others have raised billions of dollars for reinsurance units in Bermuda to benefit from lighter regulation and lower taxes.

Lloyd's chairman Peter Levene is seeking tax breaks from the British government to help Lloyd's compete. Tax is the "chief" reason why some other jurisdictions are more attractive to insurers, Tiner said.

The regulator has helped the competitiveness of the market by enabling new insurers to be created within weeks, rather than months, Levene said last month.

Tiner also said the FSA will investigate commissions paid to insurance brokers and may force the brokers to disclose such payments. The FSA ordered insurers to look for ways to improve transparency last year, the FT reported earlier.