New York State
NY DEPARTMENT TO ALLOW LLOYDS OF LONDONS SURPLUS LINES BUSINESS TO BE FUNDED AT 50% OF GROSS LIABILITIES
New York, December 2, 1997
Superintendent of Insurance Neil D. Levin today announced that Lloyds of Londons U.S. surplus lines business will be funded at 50% of gross liabilities effective December 31, 1997. This will apply to all surplus lines business funded by the Lloyds United States situs surplus lines trust funds and written on or after August 1, 1995. As part of this agreement with the Insurance Department, Lloyds will also increase the funding of the Lloyds American Surplus Joint Asset Trust Fund from $100 million to $200 million, effective January 1, 1998.
Under a 1995 agreement with the Insurance Department, Lloyds had been funding its surplus lines business at 100% of gross liabilities. After meeting in London with Lloyds and Equitas officials, as well as members of the British Department of Trade and Industry (DTI), the Department believes these are prudent steps based on the following factors:
The Department is putting forth these changes in the form of an amendment to Regulation 41. The change will allow the Superintendent flexibility as market conditions dictate.
Lloyds maintains various trust funds in New York State in order to conduct surplus lines and reinsurance business in the U.S. The New York Department regulates Lloyds activities, in part, through its oversight of these trust funds. In 1995, the Department required Lloyds to increase funding in these trust funds by $500 million and also required Lloyds to create separate trust funds for each individual syndicate for U.S. situs surplus lines and reinsurance business so that better accounting and financial responsibility could be established.