LONDON (Reuters) — Equitas, the reinsurer created by Lloyd's of London a decade ago to ensure its survival, has completed a landmark deal to transfer its billions of dollars of liabilities to Warren Buffett's Berkshire Hathaway Inc. and.The deal means National Indemnity now takes on Equitas's operations, staff and its exposures as well as providing a further $5.7 billion in reinsurance cover to Equitas, it said yesterday.

The reinsurer was created by Lloyd's in 1996 as a foundation stone in its survival plan after the 300-year-old market was brought to its knees by massive disaster and asbestos claims.

The deal's completion means 34,000 individual investors in the Lloyd's insurance market, known as Names, will effectively no longer face the threat of having to pay more money to cover asbestos and other claims resulting from policies written by Lloyd's before 1993.

"Reinsured Names can now be reassured by the $5.7 billion of extra cover that Equitas enjoys, as a result of which they can regard the prospect of failure of Equitas as extremely remote," Hugh Stevenson, Equitas's Chairman, said in a statement.

Names will also share a payout of $50 million ($98.06 million) as a result of the transaction, which is likely to be paid later this year.

The complicated deal, agreed to in October, needed approval from UK watchdog, the Financial Services Authority, and the Equitas Trustees and for the New York State Insurance Department to approve amendments to the Equitas American Trust Fund.

The next hurdle is for Equitas to get approval from the UK High Court to allow Names to be released from their financial obligations, by formally transferring Names' liabilities to Equitas or a Berkshire unit.

When it was set up in 1996, Equitas only provided financial protection to those Names who had invested in Lloyd's before 1993. The legal liability to pay valid claims remained with the Names.

If it receives court approval for the transfer Names will finally be released from a financial nightmare that cost many their life savings.

They stand to receive a second windfall payment, Equitas said, providing it gets regulatory approval.