Lloyd’s of London announced that it has completed the transfer of over $5 billion to its trust funds in the United States since September 2001, and has fulfilled the arrangement made with the National Association of Insurance Commissioners to fully fund the trusts by March 31.
Lloyd’s maintains two trusts, which are administered for the NAIC by the New York State Insurance Department, the larger one a reinsurance trust and a smaller one which covers surplus lines claims. As a “foreign” insurer Lloyd’s is required to place an amount equivalent to its anticipated U.S. claims in the funds. Following the attacks of Sept. 11, Lloyd’s gross loss estimates reached $8.1 billion, and net losses are now estimated at $2.7 billion.
The NAIC and Lloyd’s agreed that 60 percent of the full amount, around $2 billion, mainly to fund the reinsurance trust, could be, and was, deposited last November. The remainder has now been transferred.
Lloyd’s stated that it “continues to pay claims relating to September 11th and has to date received over 3,200 claims.” It indicated that it would have no difficulty in covering the U.S. losses.
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