Admiral Wins Legal Support Of Lloyd’s Business Transfer

by Stewart Douglas

Story link: Admiral Wins Legal Support Of Lloyd’s Business Transfer

Insurer Admiral Group has today won a landmark legal victory in securing a court order allowing the takeover of Lloyd’s Syndicate 2004, in line with the provisions of the Financial Services and Markets Act 2000 which regulates trade in equity.

Syndicate 2004 had previously underwritten a proportion of the Admiral Group’s retained premiums over the course of the years 2000-2002. Additionally the Syndicate also underwrote for Admiral’s general insurance lines for the last four years, suggesting a long history of commercial interaction.

The court order obtain today gave the green light to the plans to transfer the fund, which are now allowed to go ahead inside the scope of the Financial Services and Markets Act 2000 and will see the Admiral Group acquiring the existing business of the Syndicate.

In practical terms this will translate into Admiral accepting current liabilities outstanding from the Syndicate as well as its assets, leaving it potentially vulnerable to further contributions on existing accounts. In other words, Admiral may ultimately be liable for the contracts outstanding with the firm.

In the group’s announced to the London Stock Exchange today, it said that whilst there would be some financial impact on the company this would not be overly felt by the year end results, and the overall future of the group was looking promising following the Syndicate 2004 transfer.

“The transfer will simplify our group structure, accounting and regulatory processes and streamline our capital position. The impact of the transfer on the results of Admiral for the year ended 31 December 2007 will not be material,” said the report released officially to the public today.

With the court order now supporting the validity of the transaction, it remains to be seen whether the transfer will occur smoothly and whether it will translate into added value for the group.