Canadian Underwriter

Travelers and Equitas settle for US$245 million

March 23, 2004   by Canadian Underwriter

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In an attempt to close a chapter on outstanding asbestos claims, Travelers Property Casualty has agreed to receive a settlement of US$245 million from Equitas, the reinsurer charged with settling claims on behalf of Lloyd’s underwriters.
The US$245 settles net claim balances of US$255 million from Equitas, Travelers notes, and resolves policies prior to 1993 by Travelers and the former Aetna companies now owned by Travelers. The agreement involves only those London underwriters reinsured by Equitas.
However, if the U.S. federal government does enact asbestos reform, Equitas reserves the right to try to recoup US$150 million from Travelers. In this case, the previous reinsurance agreements relative to asbestos coverage, including any claims disputes, would be reinstated.
‘This transaction brings to closure, on fair and equitable terms, the reinsurance agreements between Travelers and the Lloyd’s market prior to 1993,” says Scott Belden, managing director, risk and reinsurance for Travelers.
Travelers says the settlement should not impact earnings.

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