Equitas Liabilities ‘Substantially Reduced’ by NI Deal Says Best

In a comment issued after the announcement that National Indemnity has reached an agreement in principal to enter into a significant reinsurance transaction with Lloyd’s run-off vehicle Equitas Ltd. (See IJ Website Oct. 20), A.M. Best Co. said that it views the potential impact of the deal positively.

Best said it “believes that long-term uncertainty relating to Equitas’ reserve development will be substantially reduced if this two-phase transaction is implemented in line with current proposals.e

Best said: “If the transaction is closed,” it ” would most likely assign a positive outlook to the issuer credit ratings of Lloyd’s, the Society and to the rating to debt issued by the Society. The financial strength rating of Lloyd’s would be unchanged.”