US insurer Travelers Property Casualty and Lloyd's run-off specialist Equitas have reached a comprehensive settlement of all policies existing between Travelers and those underwriters at Lloyd's reinsured by Equitas.
Under the agreement, Equitas will pay Travelers $245m to cover current and future reinsurance claims against certain Lloyd's underwriters arising from policies issued prior to 1993 by Travelers and the former Aetna companies which Travelers acquired in 1996.
As part of the agreement, $150m of the payment, representing the amount relating to asbestos bodily injury claims, has been placed in a trust.
Equitas said it has the option to take back those funds in the event that US federal asbestos legislation is passed in the current Congress. In such an event, all non-asbestos elements of the settlement would be unaffected, said the company.
Equitas claims director Glenn Brace said: “This is an encouraging result for Equitas. In January, we concluded an agreement with Halliburton that resolved our largest direct asbestos exposure. With this latest settlement, we resolve our largest reinsurance exposure.
“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 and we remain committed to agreeing global settlements with counter parties wherever we can.”
