According to news reports, Lloyd’s Equitas has reached a $415 million settlement of asbestos claims with McDermott International Inc., the parent company of Babcock & Wilcox, one of the world’s largest makers of steam generators.
The settlement would be Equitas’ last outstanding large asbestos claim. Lloyd’s established Equitas as a runoff vehicle in 1996 to take over the management and eventual payment of pre-1992 asbestos and environmental claims that nearly ruined London’s venerable insurance market.
In interviews with Bloomberg News and Reuters Equitas Chief Executive Scott Moser indicated that, although there would continue to be other settlements, the Babcock and Wilcox claim was by far the largest. “I would rather pay claims than lawyers,” he told Bloomberg. He also noted that Equitas liabilities were “being substantially reduced.”
A federal court approved Babcock & Wilcox bankruptcy reorganization plan last October. The company has established a $1.75 billion trust to pay an estimated 222,000 asbestos related claims. The settlement with Equitas will become part of the trust.
So far Equitas has paid out around $7 billion in settlement of asbestos claims, and retains around $4.3 billion in reserves to pay future liability claims.
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