LONDON UNITED'S RESERVES UP TO $164 MILLION SHORT

LONDON UNITED'S RESERVES UP TO $164 MILLION SHORT

Actuaries studying the finances of the U.K. insurance group, London United

Investments (LUI), have found that in order for its troubled insurance subsidiaries to meet anticipated future policyholders' claims, its reserves will have to be increased by between 75 million ($123 million) and 100 million ($164 million).

This provides the first clear indication of the level of LUI's financial difficulties, which became known when the U.K. Department of Trade and Industry ordered its principal insurance subsidiary, Walbrook Insurance Co., to stop underwriting new business.Six other LUI subsidiaries which, like Walbrook, were involved largely in insuring U.S. liability risks such as pollution and asbestosis, had already stopped taking on new business and had also ceased paying claims.

The deficiency in reserves was made known in a draft report by consulting actuaries Tillinghast Nelson & Warren.

The shortfall is less than some market analysts had predicted, and may help brokers, who are currently meeting to try to devise a rescue for LUI's subsidiaries, to come to an agreement.

After more than a week of meetings, the brokers, who face being sued by clients if LUI companies fail to pay their claims, had still not reached a conclusion, partly because of the uncertainty about the sums involved.