Lloyd's Pleased with Memo of Understanding Signed by California Department of Corporations and Department of Insurance

Business Wire, May 10, 1996

SACRAMENTO, Calif.--(BUSINESS WIRE)--May 10, 1996--Lloyd's of London said today it was pleased with a memo of understanding reached today between the California Department of Corporations and the Department of Insurance.

Peter Lane, Managing Director of Lloyd's North America, said, "We are pleased that the two departments in California have reached this agreement. It allows time for all the parties to work out their differences without resorting to further litigation.

"We welcome this news on behalf of our California members who have been deprived of vital information about the progress of our Reconstruction and Renewal Plan," Lane continued. "The Department of Corporations' desist and refrain orders had prevented Lloyd's from communicating with these members and had left them subject to considerable misinformation which had been disseminated about Lloyd's and our Reconstruction and Renewal Plan. We are now able to set the record straight with our California Names.

"For example, many California Names had been completely unaware of the existence of special funds as part of our settlement. These funds ensure that any member who wishes to participate in the Reconstruction and Renewal Plan will be able to do so."

Today's agreement also allows Lloyd's to continue to conduct normal business in California, including the payment of valid claims to policyholders.

Lane added, "We are pleased that California Names will be able to hear from us directly about the announcement made earlier today regarding the substantial improvement in the terms of the Reconstruction and Renewal Plan."

CONTACT: Solem & Associates

Jon Kaufman, 415/788-7788