ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, April 24, 1996 TAG: 9604240034
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
DATELINE: RICHMOND
SOURCE: Associated Press
State regulators and Lloyd's of London reached an agreement Tuesday that restricts the British insurer's efforts to collect payments from Virginia investors while a case against the company is pending.
The agreement came a day before the State Corporation Commission was to consider allegations that Lloyd's violated Virginia securities laws. The case was put on hold while the insurer works toward a settlement with investors.
``This is an agreement that buys time,'' said SCC spokesman Ken Schrad. It does not preclude further legal action, however, and the case was kept on the commission docket.
``We welcome this agreement,'' Peter Lane, managing director for Lloyd's of London North America, said in a statement. ``It shows what is possible to achieve when both sides are willing to sit down and talk.''
Under terms of the agreement, Lloyd's is barred from seeking payments from Virginia investors until May 1. After that, the SCC's securities division must receive two weeks written notice before Lloyd's tries to collect from any Virginia investor. While the case is pending, Lloyd's will be prohibited from recruiting more investors in the state.
Virginia is one of nine states where Lloyd's is accused of securities fraud and other violations in its recruitment of U.S. investors in the 1970s and 1980s. The cases are still pending, although some have reached ``standstill agreements'' similar to the one in Virginia, said Lloyd's of London attorney Peter Demmerle of New York.
Lloyd's lost more than $12 billion in the five years ended in 1992 because it was hit with a large number of claims for asbestos lawsuits, hurricanes and earthquakes. The claims wiped out many investors' personal fortunes. According to the SCC, at least 26 Virginia investors have lost a total of about $2.7 million.
Many of the investors claimed they were not adequately informed of the risks they were assuming. Lloyd's disagreed but has offered $4.3 billion to all investors as part of a ``reconstruction and renewal plan.''
LENGTH: Short : 45 linesby CNB