Landmark judgment says Equitas entitled to use actuarial models
The long awaited Commercial Court decision in the dispute between Equitas and reinsurers Brandywine (owned by Randall & Quilter) was finally handed down today. The action concerns Equitas' claims under excess of loss reinsurance contracts written within the LMX spiral. Most of the claims relate to the Kuwait Airways losses from the invasion of Kuwait in August 1990; and the oil pollution losses from the Exxon Valdez disaster in 1989.
"In today’s decision, the court has held that Equitas is entitled to use actuarial models to prove that these claims are payable," said Ling Ong, London Market Team, Weightmans LLP. "This is subject to a discount factor to be applied to the ultimate net loss. The discounts are 25% and 13.5% for the Exxon Valdez and the Kuwait losses respectively."
"It is not known whether the ruling will be appealed. However, what is clear is that the full ramifications of the decision need to be analysed carefully not just in terms of losses within the LMX spiral but also for any potential impact on reinsurance claims generally," she said.
Equitas is owned by Warren Buffet's Berkshire Hathaway.