Equitas CEO Scott Moser made his comments in anticipation that Sen. Arlen Specter, R-Pa., chairman of the Senate Judiciary Committee, would introduce his bill this week.

The senator?s plan was to have his controversial bill that has no industry and little insurer support hitch a ride on class-action reform legislation that the Senate Republican leadership has established as a priority.

However, that strategy was apparently premature, because Sen. Specter announced last week after a meeting with his committee that he will first consider the class-action reform legislation on Feb. 3, with a plan to report it to the Senate floor that day, and delay introduction of his asbestos mitigation legislation. (See related story on this page.)

As a result of Mr. Moser?s comments, Equitas later sought to soothe analysts' fears that the proposed $140 billion fund that Sen. Specter's bill would create to settle asbestos claims in the United States could bankrupt the Lloyd's runoff facility.

The statement was prompted by a press release from a group of Lloyd's Names individual investors in Lloyd's syndicates whose liabilities are covered by Equitas that suggested Equitas may have to contribute up to $10 billion to the proposed U.S. asbestos claims settlement fund.

In its latest comments, Equitas played down reports that it could be stuck with such a massive bill for a contribution to the fund well over $2 billion more than it has set aside to pay such claims.

“Taking account of our coverages, the many settlements and commutations we have agreed to over the last eight yearsand the major deals we have in the pipeline, we expect our remaining share of the U.S. liabilities is under 5 percent of the total insurance contribution,” said an Equitas staff official.

A lawyer representing Equitas testified at a recent hearing held by Sen. Specter on his proposed asbestos legislation, and as a result, the Equitas official said, “we hope Sen. Specter is reviewing the provision.”

Jeffrey Robinson, of the law firm of Baach, Robinson & Lewis in Washington, D.C., the Equitas representative at the hearing, confirmed that talks with Sen. Specter are ongoing.

“We will have to see what happens,” he said, implying that Sen. Specter is reconsidering the provision.

The provision in a draft of the bill Sen. Specter wants to introduce says that all insurers and reinsurers except Equitas would be given the right to either reduce or defer their payment to the fund if they could demonstrate that it was unfair or that it would force them into bankruptcy.

Mr. Moser said in an interview with a British newspaper confirmed by his staff that Equitas is being excluded because the bill's supporters contend that Equitas can go back to the Names whose liabilities it reinsures to recover any shortfall in its reserves.

Mr. Moser said that “what we object to is the idea that this should be done for literally every other insurance company in the world except Equitas.”

“U.S. insurers and reinsurers, quite frankly, would prefer money to come from London than to come from them, and they have more votes than Londoners,” Mr. Moser added. “It is not as grandiose as nationalistic. It is naked commercialism. If you pay instead of me, I get a competitive advantage over you. If the London market is disrupted, that is in the interests of U.S. insurers and reinsurers who are competing with it.”

Regarding the potential huge payment, the Equitas staff official said: “We believe our reserves are adequate and appropriate. If there is a fair and impartial commission [to decide its contribution to the proposed fund], Equitas expects to have sufficient funds to pay its share.”

Reproduced from National Underwriter Edition, January 27, 2005. Copyright 2005 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.