Mr Newbigging, who confirmed he will leave as non-executive chairman during the second half of next year, said that both payouts and income to 31 March had outstripped plans laid down when the company started in September 1996.
"We have made real progress towards creating a professional, cost-efficient organisation. We have not encountered any major surprises, nor have we identified any external event, trend or emerging issue that we believe could endanger the financial stability of Equitas."
However, Equitas, which aims to reinsure and wind down pounds 15bn of unresolved claims incurred before 1992, already has precarious finances.
Between September and March, the group increased its shareholder funds from pounds 588m to pounds 617m.
But in its auditors' report, Coopers & Lybrand said there were "significant uncertainties as to the accuracy of the provision for claims outstanding of pounds 11,830m, reinsurers' share of claims outstanding of pounds 3,128m and reinsurance recoveries of pounds 1,481m".
Coopers & Lybrand cast doubt on a projection by Equitas that it could expect a rate of return of 6 per cent on its investments, all of which are in fixed-interest stocks. A crucial assumption, that claims would take an average of eight years to settle, was also questioned.
The auditors criticised a failure to conduct an independent audit of the records passed to them by Equitas from the Lloyd's syndicates which first incurred the losses. Information was incomplete and not always accurate, the auditors said.
"Had we been able to obtain all the evidence necessary to satisfy ourselves in respect of the matters described , we might have concluded that material increases or decreases are required to the provision for claims outstanding... [which] could be material enough to exceed the amount of shareholders' funds," said the Coopers & Lybrand report.
Equitas is thought to be reluctant to pay the cost of an independent audit of the syndicates' records. In the past seven months it has cut the amount paid to other accountants for auditing syndicate data from pounds 4.74m to pounds 990,000.
The rescue company has to contend with poor record-keeping by some of the syndicates. In some cases, the managing agents who ran the syndicates failed to keep copies of stop-loss reinsurance policies designed to protect them.
A spokesman said: "We are well aware of the problems and we are doing very pro-active things to solve these problems." However, analysts believe the difficulty of getting the right information is such that Equitas accounts may never get an unqualified audit.
Should assets be too small to meet liabilities, Equitas has special arrangements adopted at the behest of the Department of Trade and Industry. These allow it to pay claims at a reduced rate.Reuse content