The article concerning Lloyd’s insurer and Managing General Agent Cotesworth & Co., which appeared on this Website September 7th, contained language which could be interpreted to adversely reflect on the company’s current financial status and claims paying ability.
While Cotesworth ceased writing new business in August, there is at present no evidence that its previously contracted liabilities, including present and future claims, cannot be met in full.
Cotesworth was forced to go into runoff due to exceptional circumstances. Its principal financial backer, Australia’s HIH, went into provisional liquidation last March. Its main reinsurer, Independent plc, was forced into liquidation in June. Cotesworth also suffered a large loss from the Petrobas oil rig disaster in Brazil. This highly unusual set of events made it impossible for Cotesworth to accept new business, but did not in any way affect previously written coverage.
Under Lloyd’s protection procedures (See IJ Website Sept. 4th) policyholders claims are protected by the funds of the insuring company, by its investors, and by Lloyd’s Central Fund.
There’s no reason to believe that these protective measures will fail to cover any liabilities Cotesworth may have, and the Insurance Journal apologizes to its readers and to the company for any misunderstanding in this regard.
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