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Trenwick Group Ltd. (TWK) Message Board

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  • cigarbat cigarbat Dec 19, 2002 10:24 PM Flag

    Jad item 2

    If Lloyds requires an LOC, its definately not a back up facility. Its first in line to grab.

    We've put up LOC's (backed by cash), they (Lloyds) usually require this so they can "snatch n grab" with no questions asked (assuming the claims & exps are more than the premium collected).

    This is a fiduciary responsibility on their part to protect the other 1350 syndicates.

    • cigar:

      That's what I mean by a back-up (or stand-by) facility: first in line in the event of a check bouncing or non-payment of a commitment...

      LOCs are useful for some things. I have to get one in order to bid at auctions for bulk building materials, even though I might have the money in the bank. It costs me around 2% for 14 days and gives the auction house exclusive drawing rights. After the auction I pay with a check. If it doesn't clear within 14 days, the auction house goes to the bank and collects. If I knew what my winning bids would add up to, I'd just get a $5 cashiers check...