Equitas £132m to settle US claims
By Andrew Cave, Associate City Editor (Filed: 23/03/2004)
Equitas, the reinsurer set up in 1996 to deal with the huge asbestos liabilities that once threatened to overwhelm Lloyd's of London, is to pay $245m (£132m) to settle all claims against it from US insurer Travelers Property Casualty.
The payment will be made at the end of this month and will resolve "all current and future claims" made by Travelers against reinsured underwriters and by reinsured underwriters against Travelers.
The payment settles Equitas's single largest reinsurance exposure, after a deal with US oil services giant Halliburton that settled its largest direct asbestos exposure in January.
As part of the Travelers deal, $150m of the payment, which relates to asbestos bodily injury claims, has been placed in a trust.
Equitas has the option to take back those funds in the event that federal asbestos legislation is passed in the current US Congress.
Equitas claims director Glenn Brace said the latest settlement was "an encouraging result". He added: "While we recognise that some parties may need or prefer to deal with Equitas on a transaction by transaction basis, perhaps even over many years, we believe global agreements are better economically for both parties."
The latest settlement will be paid from Equitas's asbestos reserves, which totalled £5.3billion in March last year.