Equitas, the Lloyd’s runoff vehicle established to handle claims prior to 1992, and Honeywell International jointly announced that they have “reached a comprehensive policy buy-back settlement of all insurance claims by Honeywell against the Lloyd’s of London names reinsured into Equitas, for $472 million in cash.” The payment will be made immediately.
“The settlement includes a resolution of all claims by Honeywell against the reinsured names arising from asbestos claims related to North American Refractories Company (NARCO), a business sold by Honeywell in 1986, and Honeywell’s Bendix business line, which Honeywell has agreed in principle to sell to Federal-Mogul Corp,” said the bulletin. It added, however , that “claims by Honeywell against London Company Market insurers are not impacted by this settlement.”
Glenn Brace, Equitas’ Claims Director, commented: “Our settlement with Honeywell demonstrates our commitment to resolve claims, including our largest liabilities, at the right price and at the earliest possible opportunity. This settlement with Honeywell provides significant benefits for both parties. For Equitas, it provides finality for reinsured names exposed to claims by Honeywell and its related entities. For Honeywell, it provides certainty as to the amount of claims that will eventually be covered by Lloyd’s of London names. In addition, while the amount of the settlement reflects the commercial realities posed by potential litigation between the parties, these benefits were achieved without the expense or delay of such litigation.”
Peter Kreindler, Honeywell’s General Counsel, stated: “We’re extremely pleased that we’ve been able to reach an agreement with Equitas. This settlement is another significant step in Honeywell’s comprehensive strategy to resolve all issues related to the NARCO and Bendix asbestos cases and is consistent with the assumptions on which our existing reserves are based.”
The settlement is the latest in a series of large one time only payments that the insurance industry has made in relation to asbestos related liabilities, which by some estimates could go as high as $70 billion out of an estimated $275 billion worth of potential claims. Congress is expected to once again consider proposals to limit, or at least regulate, asbestos related liabilities.
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