Lloyds takes $ 5.3 billion have reached for the put-selling of insurance

London - Lloyds (LLOY.)(L) took a charge of 3.2 billion pounds ($5.3 billion) Thursday to compensate consumers who have been refunds on the policies of insurance, and economic woes of the Ireland also filled the pain on the British Bank.

Lloyds, 41% held by Britain after a rescue of the credit crisis, made the provision against payment protection insurance (PPI) complaints after banks lost a British court case on how the policies were sold to millions of customers.

Investec analyst Gareth Hunt, said the PPI charge was double what awaits the market and could be bad news for other lenders mired in the saga.

"At least, it is clear, we now know what is the charge and the Bank can move forward, but it is certainly more important than expected." "It shows everyone will be share the same pain," said Hunt.

Lloyds shares were down 8.7% to 53 pence in morning trade, making the stock the worst performer on the FTSE 100 blue chip index (.)(FTSE), which decreased by 0.1%.

Losses from bad loans to Lloyds raised 2.6 billion pounds in the first quarter of 2.4 billion a year ago, but down from 3.8 billion in the previous quarter. He said the first quarter hit 500 million more expected books, mainly because of the Ireland, where the met Office has reached $ 1.1 billion.

The coup double put-selling insurance provision and pushed Ireland Lloyds in a statutory loss of 3.5 billion pounds in the first quarter, down from a profit of 721 million a year ago.

Margin net interest of Lloyds - the difference between what a bank charges for loans and what it pays to borrow – also fell to 2.07% of 2.12% late last year.

Lloyds was expected to swing a profit before taxes of 5 billion pounds this year, and analysts a profit of 8 billion pounds in 9 months of the year is a command.

HOPING TO DRAW THE LINE PUT-SELLING ISSUE INSURANCE

Last month, banks have lost an appeal before the High Court to counter the new rules on how they must sell PPI.

The competition watchdog has since possible probing been put-selling of PPI, which usually covers the purchases paid by instalments in case the purchaser becomes ill or unemployed.

There are approximately 12 million exceptional political, and one Analyst believes Lloyds has been exposed to about a third of this - involving the banking industry as whole could face 9 billion pounds of provisions of the PPI debacle.

Following discussions with the financial supervisory agency, Lloyds said "certain circumstances." where contact with the customer or repair will be appropriate it gave no details on the scale of possible compensation.

It will affect other banks and some overseas companies. Until now, the more conservative attitude was from Bank of America (BAC).(N), which, in October, took a 592 million of reserve requests related to PPI possible.

RBS reports results Friday, and it too may be affected. RBS shares were 4 per cent, while Barclays fell by 1%.

Morgan Stanley analysts last year estimated banks could have to pay 5.1 billion pounds in compensation to customers.

The Association of British Bankers (BBA) was examined or not to a new legal challenge against the decision of PPI but Lloyds said that it would not take part in any challenge fresh as he wanted to draw a line in the episode.

"We no longer participate in the judicial review of the BBA.". We refuse to continue a debate long ago with the regulator, "Chief Executive Antonio Horta-Osorio stated to journalists."

Britain also has an 83 per cent holding in the Royal Bank of Scotland (RBS).(L) after bailing out the two banks with billions of pounds of taxpayers in the crisis of credit money.

Because rescue Lloyds and RBS have been ordered by European regulators to sell a variety of assets.

Lloyds seeks to sell 600 retail banking branch, but last month, the independent Commission on banking (CVI) - established to propose the reform of the industry, said that Lloyds may have to sell more to improve competition.

Lloyds reiterated his surprise at this proposal, which could delay the sale of the branches agreed with the EU, adding it was communicating with potential buyers.

National Bank Australia UK (NAB).(AX), NBNK Investments (NBNK.)(L), the Virgin Money and Spanish lender BBVA (BBVA).(MC) have all been touted as buyers of the branches.

Analysts should also Lloyds to sell its Scottish Widows and Place St James s (FLS.)(L) divisions in Horta-Osorio strategic review of the company, although Horta-Osorio refused to comment Thursday on this issue.

(Edition by Hans Peters and Greg Mahlich)

($1 = 0.6052 books)

Berkshire 1 q profit drops on insurance losses (AP)

OMAHA, Nebraska - Berkshire Hathaway profits first quarter fell 58 percent by 1.7 billion in losses before income taxes of major disasters in the Japan the Australia and the United States.

CEO Warren Buffett believes that Berkshire will report 1.5 billion in net income, down $ 3.6 billion the previous year. He did not offer net earnings per share figures.

Buffett offered a preview of gains at Saturday annual shareholders meeting. Berkshire full earnings report is expected to be published Friday.

Buffett said the most important factor in the fall of earnings losses related to damage by the Japanese and tsunami, Australian floods earthquake and the earthquake of New Zealand.

"We had probably one-quarter second-worst in terms of disaster insurance industry worldwide", said Buffett.

Business of reinsurance as of Berkshire General Re and National Indemnity, sell backup insurance to primary insurers so that industry can cover the big losses.

Berkshire expects to register a 821 million underwriting loss in its insurance companies during the quarter, due to the disaster. That compares with a 226 million underwriting gain in the first quarter of last year.

Business insurance from Berkshire will contribute still 131 million of net income for the first quarter, due to investment earnings. It is considerably less than a year ago, when the businesses of Berkshire, which include auto and insurer Geico home, added insurance net income $ 1.2 billion.

Buffett said that most of the companies of the Berkshire continues to improve gradually with the whole of the economy - except for those related to residential construction. Berkshire subsidiaries which are particularly sensitive to real estate, such as rug from Shaw and Johns Manville, Acme brick have not improved since the recession violently the residential construction industry.

Utility division, which includes the Burlington Northern Santa Fe railroad and energy Weather, and the Berkshire railroad displayed a large jump in profits. This unit will add 908 million dollars of net income of Berkshire in the quarter, up to $ 505 million last year.

Berkshire recorded a loss of $ 82 million on investments and derivatives in the first quarter. In 2010, Berkshire has posted a gain of $ 1.4 billion.

The real value of the derivatives will not clear at least several years, because they grow up to at least a decade now average. But Berkshire is required to estimate their value whenever the company declares a profit. Buffett told investors he believes that the contracts will be ultimately profitable because the premiums are invested.

Earnings this operation Berkshire was 1.59 billion in the first quarter, down 28% from a year ago. Buffett said the operating profit of Berkshire is a better measure of how the company performs in a given period, because these figures exclude the value of the derivatives and investment gains or losses.

Berkshire has approximately 80 subsidiaries, including businesses of clothing, furniture and jewellery. Its utility and insurance companies are generally more than half the net income of the company. He also has major investments in companies such as Coca-Cola Co. and Wells Fargo & Co.

States reach an agreement of insurance with John Hancock (AP)

SACRAMENTO, California – nearly two dozen States have concluded an agreement with John Hancock Life Insurance Co., to settle a dispute on how the Boston insurer pays insurance policies and annuities.

John Hancock executive vice president and General Counsel, Jonathan Chiel, said Friday that the company could improve its practices of claims under the agreement with 22 States and the District of Columbia. He said that the settlement was reached Thursday.

The move comes after an audit by 35 States and the District of Columbia alleged abuse with life insurance policies and annuity contracts. Office of the Comptroller of California found the colony in a release issued Friday.

In one case, John Hancock has used the cash surrender value of a life insurance policy to pay the premium of the individual for seven years after the death of this person in 1999, according to the Office of the controller. The controller said the company did not pay recipients or sent all of the benefits due in respect of the policy in the Office of the controller guard. California has an unclaimed property program that provides companies to send financial accounts lost or abandoned to the State after three years of inactivity which protect them to be lost or spent.

Under the agreement, the company will now make better identify policy holders who died and to notify their beneficiaries, according to the controller John Chiang. He said that values more 6 400 accounts of California dating back to 1992 will be also restored.

Chiang, said that he hoped that the colony will pave the way for reforms to the industry. In addition to John Hancock, 20 other companies were audited by the States.

"While John Hancock is the first to be held accountable, it will be the last," Chiang said in the statement. "I am ready to continue all the necessary measures - including disputes - to the rest of the industry in compliance."

John Hancock, a subsidiary of Manulife Financial Corp., denies any allegations or characterization of wrongdoing regulations. The company said it was outraged by Chiang allegations and characterizations of practices of the company.

"We are disappointed that our willingness to behave in a user-friendly way is being repaid by having our tarnished reputation", said Chiel.

The company issued a statement saying: it has a long history of keeping promises to its customers and agreed to improve its procedures beyond those required by law.

The total value of the colony is not clear, but the California controller, said the change should raise more than $ 20 million for benefits of death and maturation of annuities with owners or, in many casesthe heirs of the owners.

Outside California, the Office of the Comptroller said other States that installs the Georgia included, Idaho, Illinois, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Montana, New Hampshire, New Jersey, North Dakota, Oregon, Pennsylvania, South Dakota, TennesseeTexas, Utah, Wisconsin and the District of Columbia.

Other States which have participated in the audit include Arizona, Colorado, Delaware, Florida, Indiana, Mississippi, Missouri, Nebraska, Nevada, Ohio, Rhode Island, Vermont and Washington.