Subject: Lloyd's losses, They 'ain't' seen nothin' yet (guru)..
Date: Mon, 6 Mar 2000 100505 -0600 (CST)
From: "Roy L. Beavers"
To: emfguru
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........The EMF risks will dwarf the asbestos......!!! It is being
"said" that "most" top-of-the-line insurance companies are refusing
to insure EMF losses......??? Not easy to confirm this..... No press
releases, etc..... Ask your power company about their insurance???
They are obliged to answer during 'discovery.'
(.......Also -- not yet tested..... But, in those situations where
a franchise agreement exists [most municipalities], the power company
is contractually REQUIRED to insure itself against any such liability
losses......!!! If they don't have the required EMF coverage -- they
have broken the franchise agreement......??!!??)
Cheerio.....
Roy Beavers (EMFguru)
roy@emfguru.com
.....It is better to light a single candle than to curse the darkness.....
NEW!!! Website... http://emfguru.com
...................People are more important than profits.................
DO YOU KNOW OF OTHERS WHO SHOULD BE ON THIS LIST???
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08:06 PM ET 03/05/00
Lloyd's of London Faces Fraud Suit
By BRUCE STANLEY=
AP Business Writer=
LONDON (AP) _ Venerable insurance colossus Lloyd's of London has
the fight of its 312-year life on its hands, defending against a
lawsuit accusing it of massive fraud.
Hundreds of Lloyd's investors, known in the business as Names,
allege they were duped into joining the institution at a time when
Lloyd's faced overwhelming losses due to claims by victims of
asbestos-related illnesses.
The Names argue that top Lloyd's executives knew about these
enormous liabilities but deliberately concealed them as they
launched a worldwide drive to recruit thousands of new investors to
help absorb the potential losses.
Opening arguments were to begin today in London.
The lawsuit seeks damages of up to $237 million.
However, the bigger risk to Lloyd's is the harm such a judgment
might do to its reputation, and a successful suit could possibly
open the doors to crippling claims of fraud from others.
``I think the trial itself, win or lose, is a fatal blow to the
institution,'' said Dona Evans, a New York resident and Name who is
suing to recover losses of $395,000.
Lloyd's denies all the allegations, which have been circulating
since at least 1989.
Lawyers for Lloyd's, which is a market of insurance syndicates
rather than a company in its own right, note that the government's
own Serious Fraud Office reviewed the allegations in 1992 but
decided to take no further action.
Lloyd's spokesman Adrian Beeby dismissed any suggestion that
Lloyd's or its executives acted in bad faith.
``What they're seeking to prove didn't exist, simply could not
exist, in a market like Lloyds ... which could be described as one
of the leakiest markets in the world. What happens in Lloyd's gets
leaked to the press all the time,'' he said.
The trial pits more than 230 Names _ including 24 Americans _
against an institution that over the years has come to epitomize a
uniquely British image of integrity and trustworthiness.
Formed in 1688 by insurance brokers and merchants at Edward
Lloyd's coffee house in London, the market grew along with the
British Empire to become the world's No. 1 insurer against marine
risk. Among the ships it insured was the Titanic, which cost
Lloyd's $1.58 million when it sank in 1912.
Lloyd's also accepted more unusual risks, insuring a wine
taster's palate and the legs of World War II pinup icon Betty
Grable.
Parliament even passed a law _ the Lloyd's Act _ in 1982 that
entitled the market to regulate itself. The act also protected
Lloyd's from any lawsuit except in cases of proven fraud.
Asbestos-related insurance claims began to mount in the 1970s,
and it was then, claimants in the lawsuit allege, that Lloyd's
began to recruit large numbers of new investors. Lloyd's made it
easier for them to join by changing its rules to let new Names
pledge their homes as collateral for the policies they underwrote
and for which they were personally liable.
The number of Names ballooned from 6,000 people in 1975 to a
peak of 36,000 in 1988, said Catherine MacKenzie Smith, co-chairman
of the United Names Organization _ the umbrella group for most of
the Names who filed the lawsuit.
At the same time, the UNO alleges, senior Lloyd's executives
lied to potential recruits about the extent of the risk posed by
the rising tide of asbestos claims.
David Harris, a London resident who became a Name in 1984, said
the financial information that Lloyd's made available to him gave
``absolutely'' no hint of the danger that awaited.
``As an accountant, I investigated their figure(s) fairly well.
I think I asked the right questions but was given the wrong
answers,'' he said.
Lloyd's lost some $12.6 billion from 1988 to 1992, and many
Names faced financial ruin. About 30 Names, unable to cope with
their share of the losses, committed suicide.
Evans blames the stress from her loss for the breakup of her
marriage and, with it, the loss of her six-bedroom London
townhouse.
``It was appalling what it did to families. It really, really,
wasn't just the money,'' she said.
In 1996, Lloyd's tried to contain the damage by lumping all its
earlier liabilities together and forming a new body, Equitas, to
reinsure them. All but 5 percent of its Names opted to pay large
premiums in order to off-load their debts to Equitas.
Some of the Names that didn't _ or couldn't _ pay their premiums
ended up accusing Lloyd's of fraud and suing.
If the judge in the case rules in their favor, the damages
Lloyd's would have to pay would tear ``a large hole'' in its
finances, said Robert Merkin, a professor of commercial law at
Cardiff Law School.
But in what he calls ``the doomsday scenario,'' Merkin suggests
there might be legal grounds for additional lawsuits by any of the
other 95 percent of Lloyd's Names who accepted the 1996 Equitas
deal.
The trial is expected to last until the summer.
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Archive provided courtesy of WaveGuide, http://www.wave-guide.org
Reprinted with permission of Roy Beavers, http://www.emfguru.com