Lloyd's fears US crunch

Click to follow
The Independent Online

A senior Department of Trade and Industry official, Richard Hobbs, has met with the New York Insurance Department's chief regulator to discuss the content of an imminent report by the US authorities on the finances of Lloyd's of London. It is widely expected that Lloyd's will be told to provide extra funds to support its activities in the US or face restrictions on its ability to do business there.

The US report is expected to comment on the solvency of the market and the way Lloyd's funds in the US have been used to meet claims. Lloyd's, whose solvency is known to be causing a problem for the market, is expected to publish a refinancing and restructuring plan before the end of the month.

Mr Hobbs, head of the DTI's general insurance policy branch who is responsible for overseeing the affairs of Lloyd's, metEdward Muhl, a political appointee of New York's governor, George Pataki.

The insurance market is expected to report a £1.5bn loss for its 1992 year of account (Lloyd's reports its results three years in arrears) in a little over a week's time.

Lloyd's, which is suffering because up to 4,500 Names have refused to meet their share of the £8bn reported lost by the market, is set to issue up to 70 writs in an attempt to solve its cash problems. It has asked the market's agents, who manage the Names' affairs, to identify suitable candidates for litigation.