The Hartford announced today it reached an agreement with Equitas and all Lloyd's syndicates reinsured by the runoff entity, which resolves all reinsurance payment disputes. Terms of the deal were not released.
The Hartford-based company said it will take a $243 million pre-tax charge in the second quarter after a comprehensive review of all recoverables, including those from Equitas.
Equitas is the mechanism established by the Lloyd's market to run-off liabilities of Lloyd's syndicates prior to 1993. Those liabilities include asbestos and environmental liabilities.
"The agreement is a significant step in our efforts to remove volatility from our ceded and assumed reinsurance portfolio," said Neal Wolin, general counsel for The Hartford.
The deal also resolves several years of litigation with Equitas and the carrier's single largest reinsurance recoverable.
The Blanket Casualty Treaty, which was the focus of the litigation, is a multi-layered reinsurance program that provided for excess of loss coverage for The Hartford in various amounts from the 1930s through the 1980s.
The upper layers of the treaty were first put in place in 1950, primarily with London Market insurers, including Lloyd's syndicates. The Treaty litigation continues with other upper-layer reinsurers under the treaty, the company said.
The Hartford also said its annual ground-up review of asbestos exposure will not result in any reserve additions this year.
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