Equitas settles with Hercules for $97m

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The Independent Online

Equitas, the insurance scheme set up to take on the multibillion-pound asbestos claims that threatened to destroy Lloyd's of London in the 1990s, yesterday signed another agreement to settle a chunk of its US liabilities.

Equitas, the insurance scheme set up to take on the multibillion-pound asbestos claims that threatened to destroy Lloyd's of London in the 1990s, yesterday signed another agreement to settle a chunk of its US liabilities.

The news of a $97m (£54m) settlement with Hercules, a US chemicals company, should come as relief to the thousands of private investors, or Names, who financed the insurance market. In 1996, in the wake of huge losses at Lloyd's from asbestos claims, the Names were forced to pay in to the Equitas scheme or face bankruptcy. Names still remain liable for claims in the event that Equitas runs out of capital.

Equitas, which recently had to increase its reserves for asbestos claims and warned there were no signs of claims abating, yesterday said it would pay Hercules $30m up front and $67m in to a trust to pay out further claims as they arise.

A spokesman for Equitas said this put a cap on all liabilities from Hercules claimants, and gave more certainty to Names. "There is no downside now from these claims and it has been settled at a good price," he said.

The Hercules settlement follows a number of other multimillion-dollar agreements with US companies such as EnPro, Travelers and Halliburton, which have helped reduce Equitas's liabilities.

Lloyd's, however, is still pursuing a number of Names who dissented from Equitas, pushing them in to bankruptcy. Many fear Equitas will collapse under the weight of asbestos claims, and they will be called on for more funds. One Name who refused to sign up to Equitas, said: "It is a case of getting out of the frying pan and in to the fire. The claims just don't seem to stop."

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