Insurance Group campaigns for ex-Lloyd's names and nuclear plants
Thursday 5 April 2007
A PROPOSAL has been put to the UK Treasury aimed at solving two seemingly separate political dilemmas — dealing with waste from the rundown of old nuclear plants and ending rapidly the plight of reinsured Lloyd's names, writes James Brewer. The plan has been drawn up by a non-mainstream campaign group which bears the same name as its website, exlloydsnames.com. The group disputes the stated "finality" rationale for names of the Equitas/Berkshire Hathaway deal, which has to surmount legal obstacles before being implemented in full. The campaigners clearly face an uphill struggle in the face of heavy support for the Equitas deal from Lloyd's, Equitas and many others in insurance and legal circles including the leading names' organisation, the Association of Lloyd's Members.
All the same, exlloyds-names.com alleges the current prospect of "closure" for long-suffering names is "a mirage." Sir William Jaffray, a long-standing opponent of Lloyd's over its conduct in the 1980s and 1990s and the form of the official reconstruction and renewal settlement, unveiled his proposed scheme at a conference hosted by the Management School, London. Sir William, a member of the committee of exlloyds-names.com, advanced a formula for securing an ex gratia settlement for the 34,000 reinsured names to the value of $17bn, including names who did not sign R&R. The compensation fund would be aimed at recompensing the hardest hit category and would apply to those names whose underwriting liabilities accrued up to year end 1992. He argued that the settlement could be financed from monies the Treasury would save by adopting new technology held by the trustees of clients of Care Consultants Consortium, a patent-holding group which plans to incorporate shortly, whose projects co-ordinating director is Alastair the Mackillop.
The Mackillop is also the chairman of the committee of exlloydsnames.com. Sir William said that costings provided to the Treasury by the Nuclear Decommissioning Authority for decommissioning ageing or retired nuclear reactors currently run at £85bn ($167m) but are more likely to exceed £100bn. "By leasing with a capital lease this expertise or intellectual property held by the trustees of clients of Care Consultants Consortium, the Treasury could achieve a gross saving of £30bn to £50bn arising from a far more efficient means of disposal of current partially depleted uranium nuclear waste," said Sir William. From the gross saving, there would be a one-off deduction of £8.5bn to create a compensation fund for the former Lloyd's names. No new money would have to be found. Sir William acknowledged: "We can expect to receive considerable resistance from a government which likes to think it has all the answers. However, the prospective savings are massive and will arise at a time when there is little room for financial manoeuvre, let alone political manoeuvre." He said: "By drawing together two unrelated issues, we believe we can considerably enhance Britain's prestige in the world." The Mackillop put forward the idea in a letter to Ed Balls, Chief Economic Secretary to the Treasury, and said it was a test of the political will and environmental consciousness of Chancellor Gordon Brown. The Treasury referred his letter to the Department of Trade and Industry and the decommissioning authority, but "it was obvious none of them know anything about what I am talking about", said the Mackillop. Sir William stressed that legal obstacles have still to be overcome before the Berkshire Hathaway scheme is implemented fully and strongly advised names against accepting the £1,000 payment on offer.