Authority raps Lloyd's dollar deficit
Thursday 25 May 1995
It also emerged that the Department of Trade and Industry in the UK has offered verbal assurances to the US regulator that Lloyd's would continue to be solvent and would be able to fund the $7bn deficit as when claims become payable.
The US demand comes just two days after Lloyd's launched a pounds 6bn rescue and reconstruction plan aimed at solving financial difficulties caused by the 8,000 names refusing to pay pounds 2.2bn of debts.
The United States accounts for 55 per cent of Lloyd's business, worth $7bn a year in 1994. The funds held in the US are worth $10.5bn. Under the calculation made by the US authorities, that figure ought to be $17.5bn.
In a formal statement last night, Lloyd's chief executive, Peter Middleton, claimed the report painted ''a misleading picture". He called the report "selective" and criticised the NYID for failing to take into account all relevant assets.
The 28-page US report says Lloyd's either knew or should have known it was running a deficit on its US assets.
It also criticised Lloyd's for failing to keep proper records of the liabilities and assets of each of the 33,000 names - the private investors who back the market. Since each name is meant to write insurance business on his own account, failure to keep clear records means Lloyd's is unable to be certain all names can meet their debts.
The report says: "This raises concerns that (Lloyd's American Funds), as currently constructed, may not provide the security intended ... to United States policyholders."
Lloyd's has been in effect using solvent names' funds to pay insolvent names' debts. The report says that because "certain names are unwilling or unable to fund their Lloyd's liabilities, it is questionable as to whether it is prudent to make such loans."
New York's superintendent of insurance, Edward Muhl, said: "We have reached an agreement which allows Lloyd's to continue to write new business in compliance with New York regulations while remaining obligated to pay past US liabilities."
- 1 Moscow voted the world's unfriendliest city
- 2 The excuses your boss is most likely to believe when you call in sick
- 3 I'm pansexual – here are the five biggest misconceptions about my sexuality
- 4 More than 11,000 Icelanders offer to house Syrian refugees to help European crisis
- 5 If these extraordinarily powerful images of a dead Syrian child washed up on a beach don’t change Europe’s attitude to refugees, what will?
The excuses your boss is most likely to believe when you call in sick
Bono's group has made more money from Facebook investment than from all his music
Three-year-old ultra-Orthodox Jewish children told 'the non-Jews' are 'evil' in worksheet produced by London school
Wikipedia rocked by 'rogue editors' blackmail scam targeting small businesses and celebrities
More than 11,000 Icelanders offer to house Syrian refugees to help European crisis
Climate change: 2015 will be the hottest year on record 'by a mile', experts say
Senior British politicians tell David Cameron: When dead children are being washed up on beaches, it's time to act
Jeremy Corbyn calls Osama bin Laden's killing a 'tragedy' - but was it taken out of context?
If these extraordinarily powerful images of a dead Syrian child washed up on a beach don’t change Europe’s attitude to refugees, what will?
If you're not already angry about the refugee crisis, here's a history lesson to remind you why you really should be
Theresa May says migrants should be banned from entering the UK unless they have jobs lined up
iJobs Money & Business
£14000 - £16000 per annum: Recruitment Genius: This company was established in...
£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...
£20000 - £25000 per annum + competitive: SThree: SThree are a global FTSE 250 ...
Voluntary and unpaid, reasonable expenses reimbursable: Reach Volunteering: St...