Insurance

UPS faces $1 billion liability from its Bermuda reinsurer

April 30, 1998

United Parcel Service could be liable for as much as $1 billion in federal income taxes if it loses a case now before the US Tax Court in Atlanta that involves Bermuda based reinsurer, Overseas Partners Ltd., which reinsures UPS

Stirling Cooke accountant Brian Hynes has conviction for fraud

April 30, 1998

An accountant who participated in one of the world's best-known insurance frauds is currently working for Bermuda-based insurance group Stirling Cooke Brown Holdings as a financial accountant, we can disclose. Brian J. Hynes, former managing director of Carlos Miro-owned Anglo-American International Reinsurance Co., is employed by Stirling Cooke at its London office.

MRM’s millionaire insurance bosses

March 31, 1998

Mutual Risk Management chairman and CEO Robert Mulderig received a financial package worth $2.67 million for fiscal 1997, according to the company's latest Proxy Statement filing with the SEC. Mulderig received a salary of $452,250, a bonus of $486,842, pension contributions of $11,309 and a profit of $1.72 million from exercising stock options. His right-hand man, John Kessock, who is president of the company, received a package valued at $2.64 million, comprising a salary of $452,504, a bonus of $486,842, pension contributions of $4,000 and a stock option profit of $1.7 million.

Evidence of insider trading in Mid Ocean shares prior to take-over

March 31, 1998

Investors apparently acting on inside knowledge made a killing in the derivatives market on the last day of trading before it was announced that EXEL was buying Mid Ocean, we can reveal. The volume of contracts traded in Mid Ocean call options on the American Stock Exchange increased from an average daily volume of 30 contracts to 950 contracts on Friday, March 13 - two days before the deal was signed and three days before it was announced.

Mystery over Clarendon’s dubious producer

March 31, 1998

Anyone doing business with the Clarendon Insurance Group should take a close look at further evidence we have obtained which clearly shows that either a senior officer of the group is lying about its relationship with a dubious business producer or the producer is submitting fraudulent documents to the London insurance market. Either way, the Clarendon officer who may have lied to us, Thomas Corteville, vice president/financial operations of Clarendon National Insurance Company, seemed more concerned with attacking this newsletter than analyzing the facts.

‘I was truthful,’ writes Clarendon’s Thomas Corteville

March 23, 1998

Letter to the Editor of OffshoreAlert from Thomas Corteville, of Clarendon Insurance Group.

Comp Indemnity Re granted Cayman insurance license

February 27, 1998

Two subsidiaries of Bermuda-based reinsurers were recently granted licences to operate in the Cayman Islands. Stockton Reinsurance (Cayman) Limited, which was incorporated on July 29, 1997, received a restricted Class B licence, which allows the licensee to cover only the risks of its parent company.

Mid Ocean’s Michael Butt receives $7 million package for fiscal 1997

February 27, 1998

Michael Butt, the 55-year-old president and CEO of Bermuda-based reinsurer Mid Ocean Limited, received a financial package worth $7 million in fiscal 1997, according to the company's latest Proxy Statement filing with the SEC.Butt's remuneration comprised $485,000 in salary, $500,000 as a performance bonus, $209,800 in travel and housing allowances, $53,100 in contributions to his pension plan, a profit of $5.31 million from share options he exercised during the year and a further $417,600 in restricted stock awards that were granted in previous years but which vested during fiscal 1997.

FCO announces end of bank secrecy in overseas territories

February 27, 1998

The clearest indication yet that the UK government will force its Overseas Territories to co-operate with foreign regulators investigating both fiscal and regulatory offences was given this week to Offshore Alert.Offshore centres like Bermuda, the Cayman Islands, the Turks & Caicos Islands and the British Virgin Islands are being told by the UK government to introduce within two years legislation that will be virtually identical to the UK Criminal Justice (International Co-operation) Act 1990.

EMLICO battle goes to Privy Council

February 27, 1998

The complicated legal battle over whether General Electric-subsidiary Electric Mutual Liability Insurance Company Limited should be liquidated in Massachusetts or Bermuda is scheduled to be heard by the Privy Council in London - the highest court in Bermuda's judicial system - next month.In an added twist to a drama whose circumstances change on a regular basis, Kemper Re brought, on February 20, its second lawsuit at Bermuda Supreme Court challenging the decision to allow EMLICO to redomicile to Bermuda.

John Deuss forms Bermuda rent-a-captive

February 27, 1998

One of the better kept secrets in Bermuda over the last few years has been the entry into the insurance market of Bermuda-based Dutch oil billionaire John Deuss.Not one for publicizing his business interests, Deuss quietly formed Transglobal Insurance (Holdings) Limited and its operating subsidiary, Transglobal Insurance Limited, in Bermuda on February 22, 1996.

Mutual Risk Management is best-performing Bermuda insurance stock, Mid Ocean is worst

January 30, 1998

Mutual Risk Management, which derives almost all of its income from fees and retains little or no risk, had the best performing shares of any Bermuda-based, publicly-listed insurer for the last eleven months of 1997.

Marsh & McLennan steps into punitive damages coverage row in Bermuda

January 30, 1998

Marsh & McLennan, the world's largest insurance broker, has raised eyebrows in Bermuda by setting up an offshore facility to circumvent laws in sixteen US states that discourage companies from buying insurance against punitive damages awards.The broker's actions have drawn attention to the controversial but increasingly popular practice of American insurance companies using offshore structures they ultimately own to write politically sensitive punitive damages coverage they are not allowed to provide in the US.

Mark Hardy applies for bankruptcy discharge

January 30, 1998

Businessman Mark Hardy, who ran the Bermuda-based Focus/Forum group of insurance companies that went bust in 1990, is seeking to be discharged as a bankrupt in his native United Kingdom.

Remarks about Turks & Caicos Islands ‘uncalled for’

December 30, 1997

Letter to OffshoreAlert's editor from John D. K. Lawrence, Superintendent, Financial Services Commission, Turks & Caicos Islands.

Clarendon’s dubious business producers

December 30, 1997

Rating agencies who have ‘A' rated the Clarendon Insurance Group, which has companies in the US and Bermuda, might want to take a close look at some of the third-party insurers who are producing business on the group's behalf.Of particular interest should be the business production relationships Clarendon has with New York-based Eton Management and Deep South Surplus General Agency, which is headquartered in Las Colinas, in the Dallas area.

Legal victory for Mentor liquidators against Ambassador Insurance

December 30, 1997

In a ruling that has implications for all schemes of arrangement in Bermuda, the liquidators of Mentor Insurance have won an important victory in the highest court of Bermuda's legal system - the Privy Council in London.The Privy Council ruled this month in Mentor's favour in a case against Ambassador Insurance Company by determining that the courts have no jurisdiction to extend the deadline for the submissions of appeals against claims previously rejected by the scheme administrator and also for the filing of the original claims.

Caribbean hotels insurer goes into run-off

December 30, 1997

The Caribbean Hotel Association Insurance Company Ltd., which hit financial trouble soon after it started, has stopped writing new business after just two and a half years in business. The news comes after many member countries of the Caribbean Hotel Association, for whom the company was specifically set up to insure, failed to put their money where their mouths were and buy insurance from CHAIC.

Brian Hall named as defendant in lawsuit

December 30, 1997

Former Johnson & Higgins (Bermuda) chairman Brian Hall has been named as one of 24 defendants in a lawsuit stemming from the controversial sale of J&H's worldwide operations to Marsh & McLennan earlier this year.

Financial troubles of Steven Blumhagen

December 30, 1997

Was Buffalo-based businessman Steven Blumhagen really the source of $30 million that was to have been the start-up capital of Resource Underwriters, as the company's Bermudian front-man, Robin Spencer-Arscott, would have us believe? Highly unlikely, we can report. Unless, that is, 46-year-old Blumhagen has recently won the New York state lottery and checked the ‘no publicity' box.

Stirling Cooke – What you won’t find in its prospectus

November 30, 1997

Investors contemplating taking part in the $50 million IPO of Bermuda-based insurance broker/risk manager Stirling Cooke Brown Holdings Limited, which is 24 per cent owned by Goldman Sachs, may be interested in a few details they will not find in the company's share prospectus. Perhaps the most noteworthy is the involvement of its subsidiary Raydon Underwriting Management in one of the world's largest insurance frauds. Raydon, which shares offices with Stirling Cooke at Victoria Hall, Hamilton, had the dubious distinction of managing reinsurer North American Fidelity & Guarantee.

Resource Underwriters appears to have been turned down by Bermuda’s regulators

November 30, 1997

An application to incorporate Resource Underwriters, the proposed $300 million reinsurer fronted by Robin Spencer-Arscott, appears to have been turned down by Bermuda's regulators.The Admissions Committee of the Insurance Advisory Committee met on November 7 to determine the fate of the company, said sources.

The crooked empire of Charles Gordon-Seymour

October 31, 1997

Regulators might want to take a close look at Bermuda-based insurance management firm Sussex International Ltd. following the collapse by fraud over the last six months of an Antigua-registered insurer and another company based in Nevada.All three were run by Charles Gordon-Seymour, a discredited British businessman and former Bermuda resident whose ventures frequently collapse in suspicious circumstances with debts of millions of dollars.

Credibility concerns hold up Resource Underwriters

October 31, 1997

Concerns about the credibility of some of the people involved are holding up the formation in Bermuda of Resource Underwriters, a new $300 million reinsurer whose front-man is Robin Spencer-Arscott.

MRM boss Robert Mulderig on the IRS, IPC and his recent sale of company shares

September 30, 1997

Robert Mulderig is chairman and CEO of Mutual Risk Management, one of Bermuda's best-performing alternative risk companies for several years. Here Mulderig discusses the company's business affairs with Inside Bermuda.

Statistical comparison of Caribbean-based offshore financial centers

September 29, 1997

Statistical comparison of Caribbean-based offshore financial centers. Figures supplied by Foreign & Commonwealth Office/National Audit Office.

Robin Spencer-Arscott attempts to set up new Bermuda insurer

August 28, 1997

Robin Spencer-Arscott, who lost his position as chairman of Aon Re and Aon Risk Services in Bermuda after Aon's acquisition of Alexander & Alexander, is believed to be close to setting up a new $300-$400 million reinsurer in Bermuda.Details of the new reinsurer have not been announced but Spencer-Arscott has been telling insurance people that he hopes to have the company up and running by the Rendezvous de Septembre gathering in Monte Carlo next month.

Black and Cascio resign from Stockton Re

July 30, 1997

The ability of finite risk reinsurer Stockton Re to continue its impressive growth since it was formed three years ago is in question following the resignations last month of chief underwriters Richard Black and Michael Cascio, who effectively ran the insurance side of the company.Their departures followed differences with senior management over the future direction of the firm following the recent sale of its investment manager and sister company, Commodities Corporation, to Goldman Sachs.

Bermuda Fire & Marine insolvent by $1.4 billion

July 30, 1997

Bermuda Fire & Marine Insurance Company, which was stripped of over $40 million of assets two years before it went bust without Bermuda's regulators so much as batting an eyelid, is now estimated by its liquidators to be insolvent by an astonishing $1.4 billion. If the figures are accurate, Bermuda Fire would become not only by far the biggest insolvency in Bermuda's history but also one of the biggest insurance insolvencies anywhere in the world.

Captive Resources, Inc. v. United Trades Insurance Company: Writ of Summons

July 4, 1997

Case 554 of 1997 - Captive Resources, Inc. v. United Trades Insurance Company - Writ of Summons - Grand Court of the Cayman Islands - July 4, 1997

Centre Re facing legal action over Anglo American

May 28, 1997

Bermuda-based Centre Reinsurance Holdings is facing legal action following the recent provisional liquidation of UK firm Anglo American Insurance Company, which Centre Re both owned and reinsured.Inside Bermuda has been told that creditors are going to sue Centre Re, alleging that Centre Re and its parent, Swiss-based Zurich Insurance Company, have misled Anglo creditors and acted in its own interests to the detriment of creditors through a series of actions since 1992.

Compensation review of officers of publicly-listed insurers based in Bermuda

April 27, 1997

Brian O' Hara, chairman and chief executive officer of both excess liability carrier Exel Ltd. and its main operating subsidiary X. L., was by far the best paid officer in 1996 of all the executives of Bermuda-based insurers that are publicly-listed in the United States, according to a salaries survey conducted by Offshore Business News & Research.The review shows that O'Hara took home a financial package worth $5.52 million for fiscal 1996, more than $2 million greater than the next highest-paid officer, Michael Butt, president and CEO of property catastrophe reinsurer Mid Ocean Ltd.

North American Fidelity & Guarantee – a Bermuda tragedy

April 27, 1997

A British television programme claiming that a "mysterious Irishman" called Steven Baker was being sought in connection with the worldwide insurance fraud that goes by the name of Dai Ichi Kyoto Re caused a lot of interest in Bermuda. One of Dai Ichi's sister companies, North American Fidelity & Guarantee, had a brief but extremely profitable and very fraudulent one-year trading spell in Bermuda in 1992/1993. The company began life as a shelf company set up in October, 1989, by ambitious Bermuda lawyer Lynda Milligan-Whyte.

Start date set for Bermuda Fire & Marine trial

April 27, 1997

A trial date has finally been set for what will be one of the most eagerly-awaited business-related civil trials in the history of Bermuda.Bermuda Supreme Court has provisionally set aside a date in the spring of 1998 to begin hearing allegations that some of the island's most influential businessmen stripped Bermuda Fire & Marine Insurance of assets valued at over $40 million even though they allegedly knew the firm was insolvent.

Scheme of arrangement for Bermuda Fire & Marine Insurance

February 28, 1997

A scheme of arrangement has been selected as a way to liquidate the assets of Bermuda Fire & Marine Insurance Company, which is estimated to have liabilities of $500 million to $700 million. Details of the scheme are expected later this year but the process is expected to last at least 20 years.

Charles Collis accused of altering Bermuda Fire & Marine minutes

February 28, 1997

One of Bermuda's most influential businessmen, lawyer Charles Collis, has been accused of doctoring the minutes of a crucial committee meeting to hide evidence that directors of Bermuda Fire & Marine Insurance knew the firm was in financial trouble before they stripped it of $40 million in assets.

Mutual Risk Management is examined by the IRS

February 28, 1997

Bermuda-based Mutual Risk Management, which sells itself to investors as being risk-free and to its ultimate insureds as being a carrier of risk, is currently subject to an examination by the US Internal Revenue Service.

Great Quotes of Our Times (Otherwise known as BF&Misms)

February 28, 1997

The Things People Say.

Bermuda Fire & Marine grossly under-estimated run-off costs

November 12, 1995

The management of Bermuda Fire & Marine Insurance may have underestimated the costs of running off the failed insurer's international business by as much as $23 million, according to liquidator Ernst & Young. When breaking up the company in 1991 in order to protect its profitable domestic business from the debts of its international arm, only $1.7 million was left behind to pay Bermuda Fire's run off costs.

Mutual Risk Management fires auditor

October 14, 1995

Bermuda-based Mutual Risk Management, whose shares are traded on the New York Stock Exchange, has dismissed its auditor of 18 years, KPMG Peat Marwick, and replaced it with Ernst & Young - but will not officially say why.

Wall Street stock analyst heaps praise on Bermuda

October 12, 1995

Norman Rosenthal, a senior securities analyst with Wall Street investment firm Morgan Stanley, heaped praise on the Bermuda insurance and reinsurance market yesterday.Mr. Rosenthal, whom the press had been notified in advance was a hard-hitting talker, didn't have a bad word to say about the island's industry during an address yesterday at a lunch organised by Bermuda Insurance Institute.

Park International buys HJF International

October 12, 1995

Bermuda-based Park International Ltd., the insurance brokerage subsidiary of Mutual Risk Management, has bought rival broker HJF International Ltd. and taken on all six of its staff, including HJF's former owners, Michael Jenkins and Mike Foulger.The acquisition has arguably made Park the "leading independent brokerage firm in Bermuda, if you consider an independent broker to be one not connected with another broker", Park's president, Paul Scope, said.

Mello Hollis resigns from Bermuda Fire legal case

October 12, 1995

Law firm Mello Hollis Jones & Martin resigned from the investigation into Bermuda Fire & Marine Insurance because of "professional disagreements" with a British law firm also involved in the case, we have been told.Its decision to resign - only a few weeks after MHJ&M partner Saul Froomkin had interviewed Bermuda's Fire's top directors - had nothing to do with concerns about the high profile nature of a case that affects some of the most powerful members of the community, according to sources.

BF&M policyholders’ ‘not at risk’

October 12, 1995

Long-term policyholders with BF&M Ltd. are not at financial risk because of a multi-million dollar lawsuit brought against the firm by the liquidators of its former parent, BF&M's lawyers have claimed. Although BF&M Life Insurance Company Ltd. is named as a co-defendant in the lawsuit, long-term policyholders are protected under Bermuda law, said lawyer Timothy Marshall, of Marshall & Company.

Policyholders stick with BF&M despite lawsuit

October 11, 1995

BF&M's policyholders appear to have decided to stick it out with their company in the wake of a multi-million dollar lawsuit against the firm.BF&M's main local rivals, Colonial Insurance and Argus Insurance, said they have seen little or no new business as a result of BF&M's legal problems.Last week, the liquidators of Bermuda Fire & Marine brought a lawsuit in an attempt to gain control of BF&M's assets to pay overseas creditors, who are estimated to be owed.in excess of $100 million.

BF&M lawsuit will focus on 1991 sale of assets

October 6, 1995

The focus of the court action filed yesterday against BF&M Ltd. and other co-defendants will be the complex sale of Bermuda Fire & Marine's profitable domestic business in 1991. Bermuda Supreme court must decide whether the sale was done fairly and in the best interests of the firm's policyholders and shareholders, as Bermuda Fire's directors claim, or whether it was a way of avoiding expected claims by U.S. policyholders, as creditors claim.

Prominent Bermudian businessmen and firms accused of asset-stripping in lawsuit by Bermuda Fire & Marine liquidators

October 6, 1995

A lawsuit has been filed against some of Bermuda's best-known companies and individuals by the liquidators of Bermuda Fire & Marine Insurance Company Ltd. Although no amount has been stated in the legal action filed at Bermuda Supreme Court on Thursday (Oct. 5), the liquidators said earlier this year that Bermuda Fire's debts could exceed $100 million.

EXEL forms reinsurer

October 5, 1995

Bermuda-based EXEL Ltd. has announced it intends to establish a wholly-owned subsidiary, XL Reinsurance Company Ltd., to provide specialty reinsurance coverage for captives, commercial insurance reinsurance companies, with a start-up capital of $250 million. It is expected to be operational by December 1, 1995.In addition, another EXEL subsidiary, XL Insurance Company Ltd., will increase the maximum limits offered to general liability clients to $150 million from $100 million. Individual directors and officers liability insurance limits for "Side A" coverage only are being raised to $50 million from $25 million.

$71 m wiped off Sphere Drake’s market cap after increasing marine P&I reserves

October 5, 1995

Sphere Drake Holdings Ltd. had $71 million wiped off its market value in the four trading days after the firm announced it was increasing by up to $15 million its reserves on its marine protection and indemnity insurance business.Investors began bailing out of the company immediately after the insurer's surprise announcement on September 27 that the extra reserving would lead to a drop in third-quarter earnings of $12.75 million or 69 cents per share.

Legal First: Bermuda court declares director ran company knowing it was insolvent

October 5, 1995

Former government tourism officer and failed travel agency boss Francis Purvey has become the first director of a Bermuda company to be adjudged to have carried on running a firm while he knew it to be insolvent.The Supreme Court has made a declaration that Mr. Purvey fraudulently traded as president and director of World Travel Advisors Ltd., a travel agency he set up in 1985 after leaving the Department of Tourism.