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Equitas Part VII Transfer
In October 2006 Equitas entered into an agreement under which National Indemnity Company, a member of the Berkshire Hathaway group of companies, reinsured all Equitas’ liabilities and took on the run-off of Equitas’ liabilities.
The transaction was structured to occur in two phases. Phase I was completed in March 2007.
The High Court made an order on 25 June 2009 approving the statutory transfer of the 1992 and prior non-life business of members and former members of Lloyd's to Equitas Insurance Limited. Mr Justice Blackburne was firmly of the view that it was appropriate to sanction the transfer scheme. The transfer covers all the business reinsured by Equitas Reinsurance Limited at the time of Reconstruction and Renewal in 1996, and includes the PCW syndicates' business reinsured by Lioncover Insurance Company Limited and the Warrilow syndicates' business reinsured by Centrewrite Limited. The transfer will become effective on 30 June 2009, after which time Names will no longer be liable for their 1992 and prior years' underwriting liabilities at Lloyd's as a matter of UK law.
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Equitas, based in London, was established in September 1996 to reinsure and run-off the 1992 and prior years’ non-life liabilities of Names, or Underwriters, at Lloyd's of London.
The Company was transformed when it entered into an agreement in November 2006 under which National Indemnity Company, a member of the Berkshire Hathaway group of companies, reinsured its liabilities and another member of the Berkshire Hathaway group, Resolute Management Services Limited ("RMSL"), took over responsibility for the run-off. This first phase of the reinsurance transaction was completed in March 2007.
The reinsurance transaction with National Indemnity Company contemplates a second phase, under which the liabilities of Names reinsured by Equitas will be transferred to another company under Part VII of the Financial Services and Markets Act 2000 and Equitas will (if the transfer is completed on or before 31 December 2009) be entitled to purchase additional reinsurance from National Indemnity Company. Work on this proposed Part VII transfer is now well advanced. You can obtain further information about it here (opens in new window).
Equitas continues to be responsible for ensuring that the run-off is managed in the best interests of Names, consistent with their obligations to policyholders. Equitas does not, however, manage claims. Any claims related enquiries should be directed to RMSL whose contact details are as follows:
Resolute Management Services Limited
33 St Mary Axe
London
EC3A 8LLTel: +44 (0) 20 7342 2000
Fax: +44 (0) 20 7342 2001
