Lloyd’s confirmed earlier reports (See IJ Website Oct. 26) that it has reached an agreement with the New York State Insurance Department which provides for the funding of the reinsurance trust that the NYSID administers at 60 percent of the normal requirement for WTC related losses for the quarters ending Sept.30 and Dec.31.
The decision reconfirms an earlier agreement which had been put in doubt by the NAIC’s statement that 100 percent of funding would be required (See IJ Website Oct. 25). Lloyd’s said simply that it would “deposit funds equaling 60% of the claims to be made by US cedants arising from the September 11 attacks” by the November 15 deadline.
Although individual state insurance commissioners aren’t technically bound by the NYSID’s decision, they are expected to go along with it. S&P commented that, “Each state regulator has his or her own authority to determine if credit for reinsurance requirements are met in his or her state. However, Standard & Poor’s believes it is likely that other state regulators will follow the recommendation of the New York Insurance Superintendent. As such, withdrawal of certain state reinsurance licenses is not expected.”
The payment of the balance needed to restore the funds to 100 percent of the reinsurance liabilities will be made by the end of March. Lloyd’s Chairman Sax Riley reaffirmed that all valid claims of U.S. policyholders would be paid “swiftly and efficiently.”
S&P, however, said it would keep the ratings on Lloyd’s members on CreditWatch with negative implications. It will resolve the ratings” when greater clarity is available relating to Sept.11 claim estimates and related reinsurance recoveries, when the liquidity issues are fully resolved, and when cash calls are met by capital providers.”|”lloyd’s,, nysid, agree, on, re, trust, fund, payment
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