The transfer will see $7.8bn of liabilities moved to Equitas Insurance
Lloyd’s Names have finally been absolved of any further liabilities after the High Court authorised the transfer of all 1992 and prior non-life business of members and former members to a new company.
The transfer, approved by Mr Justice Blackburne, and known as Part VII, will see $7.8bn of liabilities moved to Equitas Insurance. It will now become the principal insurer, which means that claimants affected by asbestos pollution and health problems from the 1980s will be claiming from it instead of from Names or Names’ estates.
The transfer covers all the business reinsured by Equitas Reinsurance, and includes the PCW syndicates’ business, reinsured by Lioncover Insurance Company, and the Warrilow syndicates’ business, reinsured by Centrewrite.
“This transfer is the final chapter in the Equitas story, which started back in 1992,” said Jane Barker, chief executive of Equitas. “It will mean that the Lloyd’s Names who were underwriters in the years up until the end of 1992 now have legal finality in the UK in terms of their exposure to claims from policyholders.”
Equitas was set up in 1996 to reinsure Lloyd’s liabilities between the 1930s and 1992. It became mandatory for members to reinsure liabilities with Equitas.
Sean McGovern, Lloyd’s director and general counsel, said: “This decision by the High Court closes this chapter in the UK for Names, relieving them from their past liabilities. We are very pleased with the decision and thank the Equitas team.”
In order to increase security for policyholders, Equitas has purchased a further $1.3bn reinsurance cover from National Indemnity, a subsidiary of Berkshire Hathaway.
Equitas was advised on the transfer by PricewaterhouseCoopers and Clifford Chance.