Lloyd’s settles fight with head of negligent syndicate
LONDON (AP) _ A defunct insurance syndicate that lost millions backing high-dollar policies against asbestos and pollution has settled its dispute with Lloyd’s of London, Lloyd’s said Thursday.
Insurance executive Stephen Merrett, who ran the Merrett 418 reinsurance syndicate, agreed to pay 1 million pounds ($1.7 million) to investors.
The settlement is a small portion of the 284 million pounds ($470 million) that investors lost after their money was pledged to back reinsurance taken out against pollution and asbestos liabilities in the United States. Many of these losses have been wiped away in a complex restructuring plan at Lloyd’s.
As part of the settlement with Merrett, agencies that underwrote insurance business of Merrett 418 will have to pay 2 million pounds ($3.4 million) to Lloyd’s.
Merrett was also barred from working in any capacity with a company affiliated with Lloyd’s.
Lloyd’s, the 308-year-old, London-based insurance entity, functions less like a corporation than a marketplace, where underwriters and those seeking insurance meet. It is famous for insuring things that are either extremely valuable or hard to value, such as the movie queen Betty Grable’s legs and the 1713 Gibson Stradivarius violin.
Lloyd’s was pushed to the brink of extinction by $12.4 billion in losses between 1987-1992, when it was hit with large claims for asbestos, pollution and hurricanes _ as well as modern maritime disasters such as the Exxon Valdez oil spill.
Business at Lloyd’s has since bounced back, and Lloyd’s this year completed a complex restructuring plan that pushed all its old liabilities into a new group, Equitas, while ending litigation with investors who say they were defrauded.