Dear Superintendent Levin

Further to my prior letters to you and Mr Presser, I am writing to seek a meeting with you when I visit New York in a week or two's time.

We have become extremely concerned about the way in which Lloyd's Management is co-operating with Corporate Capital with a view to squeezing out Names and spread vehicles by the end of the year. Officially, the policy position is that Lloyd's is seeking to maintain a diverse capital market. In reality, a whole raft of actions are being taken that will make it so economically unattractive for Names to continue at Lloyd's that it becomes inevitable the market is dominated by Corporates, and in turn it will become inevitable that those Corporates are dedicated Integrated Lloyd's Vehicles; the majority of those companies are in turn likely to be Bermudan. Within the space of three years or so, therefore, the capital underlying the Lloyd's market will have changed from being rich individuals to being Bermudan reinsurance companies, many of them owned and operated by big brokers like Marsh MacLennan.

From public statements made in London by the Chairman of ACE, the Chairman of Marsh MacLennan, the principle banker promoting Corporate Capital in London, and others, it is clear that the intention of the corporate capital providers is to disband the Central Fund at Lloyd's. If there is no Central Fund there will obviously be no Joint American Trust Fund. The Joint American Trust Fund was the guarantee of "finality" so far as the 30,000 Names who accepted the Reconstruction and Renewal offer were concerned. It was also the guarantee for US policyholders in the event of Equitas running into difficulties. As I indicated in my letter to you last January, I remain strongly of the view that Equitas will run out of money early in the next century and that it does not have adequate reserves to meet the asbestos and pollution liabilities that it will inevitably face. This means that it will trigger its proportional insolvency clauses and the protection of the Joint American Trust Fund for both policyholders and Names will become a reality. If there is no mutual Society of Lloyd's by then, both policyholders and Names will suffer.

We believe urgent action is required by regulators who may be unaware of the speed with which the Lloyd's market is changing. We think there are actions that could be taken, such as requiring ILVs to make long-term commitments to the Central Fund underpinned by bank guarantees, and by ordering higher capital ratios for ILVs, in view of the lack of transparency of their business and the threat they pose to the solvency of the Lloyd's market as a whole.

I would welcome the opportunity to discuss these matters with you when I am in New York in the next week or two. I hope that we can find a slot in our diaries to talk.

Yours sincerely

Christopher Stockwell

Chairman