The story
In the late 1980s and early 1990s, Lloyd's became engulfed with losses arising predominantly out of asbestosis, pollution and health hazard policies, some dating back several decades. Thousands of individuals (known as "Names") who had invested in Lloyd's syndicates that wrote these long-tail liability risks, or reinsured other syndicates that had, were facing financial ruin.
The proposal to set up the Equitas structure formed part of the Lloyd's "Reconstruction and Renewal" (R&R) plan that was devised under chairman Sir David Rowland and chief executive Peter Middleton. It was accepted by 90% of the c. 34,000 Names who had underwritten policies at Lloyd's, and it became mandatory for all members to reinsure their general insurance (non-life assurance) liabilities into Equitas on business allocated to the 1992 and all 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 permitted to take on new business but it remains the largest solvent run-off reinsurer globally.
From Wikipedia’s article on Equitas, shared under CC BY-SA 4.0.4