A recent decision by U.S. regulators not to require Lloyd’s members to fully fund the market’s reinsurance trust will ease some of the pressure on the market’s liquidity, says rating agency Standard & Poor’s (S&P). However, insurers have reacted with concern to the decision, questioning Lloyd’s ability to meet its obligations as a result of the September 11 terrorist attacks. Lloyd’s has pegged gross losses at US$8 billion, but just US$1.9 billion after reinsurance. S&P estimates gross losses will reach at least US$7.7 billion, net of reinsurance. The new figure comes after discussions between the rating agency and Lloyd’s management. “The loss estimate for Lloyd’s is based on information available to date, but considerable uncertainty over the ultimate size of the market’s losses remains,” says Stephen Searby of S&P. He does add that any further losses would be in line with industry figures. The rating agency goes on to say that Lloyd’s liquidity, while damaged, remains sufficient. While the market will have to draw on its Central Fund to answer its commitments, recent increased levies to members should help to restore that fund. Normally, foreign reinsurers are required to provide funds matching their gross liabilities in the U.S. Due to the extraordinary nature of the September 11 attacks, U.S. regulators are requiring Lloyd’s members to produce only 60% for the time being. They will also accept insurance letters of credit from members as assets for Lloyd’s reinsurance fund, known as the Credit for Reinsurance Trust Funds (CRTF).