Equitas is the name given to a group of companies that was formed in 1996 to reinsure the liabilities that had accumulated in the syndicates at Lloyd's of London on insurance policies written on the 1992 and all prior years of account. These liabilities were reinsured by Equitas Reinsurance Limited (ERL), which was also appointed as the run-off agent. The liabilities were then retroceded to Equitas Limited, to which ERL also delegated its run-off function.
The proposal to set up the Equitas structure formed part of the Lloyd's "Reconstruction and Renewal" (R&R) plan. It was accepted by 90% of the 34,000 "Names" who had underwritten policies at Lloyd's, and it became mandatory for all members to reinsure their non-life insurance liabilities into Equitas on business allocated to the 1992 and prior years of account. When Equitas started it had £15 billion of liabilities at net present value, which were expected to take up to 40 years to settle. It also had assets amounting to 105% of the liabilities, making it the largest start-up company to date. Equitas is not allowed to take on new business but it remains the largest solvent run-off reinsurer globally.
Equitas is run by directors and owned by four trustees who hold the shares on behalf of those who reinsured their liabilities into it.
According to its 2016 reported accounts, it holds total assets and total liabilities of £4.768 billion, of which £3.877 billion is allocated to liabilities in the United States. The company believes its assets are adequate to pay its liabilities in full but the accounts are qualified because of the inherent uncertainty in quantifying the liabilities.
In March 2007 National Indemnity Company, a subsidiary of Berkshire Hathaway, entered into an agreement with Equitas to assume of all of its assets and liabilities, provide an additional $7 billion of reinsurance for its whole account, and take over the staff and management of the business. The transaction was approved by regulators in both the United Kingdom and United States. Equitas was renamed Resolute Management Services Limited. The deal included a £90 million contributed by Lloyd's. There was expected to be a small distribution to all reinsured Names, who were consulted about the agreement.
Equitas sought to novate its remaining liabilities, subject to High Court approval. This process could only be progressed once the law in England was changed to allow it, which was in progress at the time the National Indemnity deal was announced.
In June 2009 the High Court approved the transfer, under Part VII of the Financial Services and Markets Act 2000, of all of the 1992 and prior-years non-life liabilities of open and closed year Names to a new company called Equitas Insurance Limited, including the PCW syndicates' liabilities previously reinsured by Lioncover Insurance Company and the Warrilow syndicates' liabilities previously reinsured by Centrewrite Limited. This transfer marked the closure of all Names' liabilities under 1992 and prior years under English law.