Warren Buffett, the US investor, yesterday offered thousands of Lloyd's names the hope of avoiding future cash calls by striking a deal to take on the London insurance market's pre-1993 claims.
Mr Buffett said the 34,000 names - individuals who supported Lloyd's - and their descendants should be reassured by the deal, which will see Berkshire Hathaway, his investment company, provide additional cover to Equitas, the company set up to manage their liabilities.
He said: "If I were a name, I would feel that getting an additional $5.7 billion (€4.5 billion) of extra protection really ended things. As a name I would feel that the Equitas management had put this matter to bed by this kind of contract."
If approved, the deal will end one of Lloyd's unhappiest eras, when it almost collapsed under a number of disasters and asbestos-related claims. The crisis prompted Lloyd's to launch a rescue plan which created Equitas.
Christopher Stockwell, chairman of the Lloyd's names association, said: "It would appear that this is going to remove names' ultimate liabilities and give them true finality."
Lloyd's said the deal would also "end the residual legal liabilities" faced by the market if Equitas were to fail.
Under the deal, National Indemnity Company, a Berkshire division, will provide up to $7 billion of extra reinsurance cover to Equitas.
In return, it will take over most of the assets of Equitas and receive £90 million from Lloyd's. Equitas will keep £150 million, some of which will be distributed to names.
