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LONDON-Lloyd's of London members thought that the September approval of the reconstruction and renewal plan defined the terms for ending their problems with the market, but five months later many are learning they have to put up additional assets before making a final exit.

About a quarter of the members who participated in the Lloyd's settlement as part of the R&R plan are being billed for more money to meet shortfalls in their payments to leave the market. Nearly 9,000 members will be billed for a total of (British pounds) 25.6 million ($41.9 million).

A number of factors have led to the shortfall. In some cases, members' assets, such as letters of credit or life insurance policies, ultimately did not bring in enough to pay what they owed Lloyd's. About 175 members found their funds short by a total of (British pounds) 5 million ($8.2 million) because of this, said a Lloyd's spokes-man.

But about (British pounds) 2 million ($3.3 million) of the shortfall is a result of exchange rate losses, as sterling has strengthened against the dollar in recent months. About 6,000 members have been hurt by the currency exposures diminishing the value of their dollar-denominated assets, and 2,500 have been asked for an additional (British pounds) 18.6 million ($30.5 million) to shore up the dollar value of Lloyd's U.S. funds.

Exchange rate fluctuations also have caused problems for members expecting repayments of surpluses. Although Lloyd's stated in its Settlement Offer Document that members would be paid any outstanding money within three months of the R&R plan being accepted, some 600 names are still waiting to receive any payment, and many more have outstanding dollar-denominated surpluses.

The complexity of calculating who gets what has caused the delay in paying surpluses, but shifts in the exchange rate are eroding the funds before the members receive them.

Lloyd's stated in the SOD that it would not hedge its currency exposures.

Meanwhile, Lloyd's is playing down reports from CBS Analysis, the research department of members agent Christie Brockbank Shipton Ltd., that it is being forced to use 80% of its capacity this year as a term of its (British pounds) 300 million ($491.2 million) loan from a group of banks: Citibank International P.L.C., NatWest Capital Market Ltd. and Royal Bank of Canada Europe Ltd.

Writing in its February market review, CBS comments that Lloyd's near future is "grim" because of too much capital at the wrong point in the insurance cycle, coupled with a very high utilization requirement. "This is a totally unrealistic scenario and CBS recommends that Lloyd's renegotiates the terms of this loan without delay," said the report.

A Lloyd's spokesman said the loan conditions do include a capacity utilization clause, but that the proportion to be used to satisfy the loan is substantially less than CBS stated. The spokesman could not indicate how much the banks were requiring Lloyd's to use.