In October 2006, Lloyd’s welcomed the announcement of the transaction between Equitas and Berkshire Hathaway Inc, bringing to an end the residual legal liabilities of Lloyd’s and bringing finality to Names reinsured by Equitas.

Lloyd’s Chairman, Lord Levene, said at the time: “This agreement marks a significant milestone for Lloyd’s. It enables us to close a chapter in Lloyd’s history and move forward. We have always had every confidence in the management of Equitas and their ability to achieve a solvent run-off. This additional protection, however, is very valuable to Names who were originally reinsured by Equitas and who will now achieve finality post transfer.”

Speaking at Lloyd’s Scott P Moser, chief executive officer of Equitas Ltd, announced: “All things being right we will close the second biggest transaction in reinsurance history. We understand that Names want legal finality and we desire a transaction to provide the greatest opportunity to get legal finality. Equitas is going to take every reasonable step it can in pursuit of that goal.”

The Financial Services Authority (FSA) has been kept informed of the progress of this transaction. Completion is subject to various conditions including approvals which must be obtained before 31 March 2007 from the FSA, regulatory authorities in the United States and the Equitas Trustees. Both contributions from Lloyd’s are also subject to approval by an Extraordinary General Meeting of the current membership of Lloyd’s before 31 March 2007.

Moser also explained Equitas’s unique position in the reinsurance market and its “excellent” relationship with Lloyd’s. “We are now an independent entity. We are not part of Lloyd’s, Lloyd’s has no ownership interest in Equitas and we are wholly outside the Lloyd’s regulatory system.

“We are part of the largest series of reinsurance claims actions in history. Equitas has handled nearly 12 billion pounds worth of premiums, reinsured risks written by 390 different Lloyd’s syndicates managed by some 90 different managing agents. The different transactions encompassed more than 750 reinsurance programmes and more than 220,000 reinsurance policies written by nearly 3000 reinsurers.”