BestWeek: Alien Reinsurers Tally Katrina Losses; Debate Over U.S. Trust Funds Resurfaces.

OLDWICK, N.J. -- Hurricane Katrina, the most expensive storm on record, has brought back into the spotlight the controversial issue of requiring non-U.S. reinsurers to maintain trust funds in the United States as collateral for the payment of anticipated claims.

The debate typically would ratchet up after high-impact catastrophes when reinsurers were required to almost immediately post 100% of their liabilities into the trust funds, according to an exclusive report in the Sept. 19 BestWeek.

Lloyd's, among the most vocal opponents of the trust fund regulation, reiterated its opposition to the U.S. policy last week, although it insisted the company would have no problem meeting all of its Katrina liabilities.

So far, Lloyd's estimates Katrina will create a net loss of $2.55 billion on its businesses. The effect on its central fund--available to cash-strapped syndicates that have exhausted their own coffers--would be "immaterial," it said.

Also, "nothing suggests that Lloyd's syndicates would not be able to trade forwards as a result of the Hurricane Katrina," the company said in a statement.

Other exclusive BestWeek content is a comprehensive rating action taken by A.M. Best Co. regarding major companies with exposure to Hurricane Katrina. A.M. Best said it expects all rated companies to be able to meet their current loss obligations despite the projected magnitude of the insured losses. However, the insured losses from Katrina have had a significant impact on some insurers, leaving potential capital shortfalls relative to their current rating level and also calling into question the risk management capabilities of some insurers, A.M. Best said.

Also featured in BestWeek is exclusive coverage of three major industry conferences held last week. The inaugural Bermuda Captive Conference focused largely on health-care industry captive needs, particularly medical liability. In-depth coverage of both the Rendez-Vous de Septembre, held in Monaco, and the Independent Insurance Agents & Brokers of America convention in New York, revealed how reinsurers and insurers think Katrina will impact their businesses.

BestWeek is published by A.M. Best Co. for insurance professionals, including home office executives, agents and brokers.

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A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com.