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KPMG (Bermuda) suspects class action plaintiff may have received illegal payment

July 12, 2007
Did a major U. S. law firm illegally pay a Bermuda-based investment firm to serve as lead plaintiff in a class action lawsuit against KPMG (Bermuda) regarding its audits of Annuity & Life Re (Holdings) Ltd.?That's what KPMG wants to know before discovery winds up in an action at the U. S. District Court for the District of Connecticut. However, rather than answer that and other questions, the investment firm, Midstream Investments Ltd., has filed an eleventh-hour motion to withdraw from the case entirely and for a protective order to avoid being forced to provide evidence.

ACE settles Pennsylvania action for $9 m

June 15, 2007
ACE Ltd. has agreed to pay $9 million to settle allegations that it was involved with other insurers and brokers to rig bids for excess casualty insurance. The settlement agreement between ACE, Pennsylvania Attorney General's Office and the Pennsylvania Department of Insurance was announced on May 14.

Hundreds of millions of dollars at stake in claims from ‘quack’ doctor’s work

April 7, 2007
Four Bermuda insurers have been named as defendants in a lawsuit brought on behalf of 70 patients of an osteopathic surgeon who has been accused of killing or maiming dozens of patients in the United States.The difference between success and failure may amount to hundreds of millions of dollars for XL Insurance Company Ltd., ACE Insurance Company Ltd., Starr Excess Liability Insurance International Ltd., Allied World Assurance Company Ltd. and two non-Bermuda co-defendants: Teays Valley Health Services, LLC, d.b.a. Putnam General Hospital, of West Virginia, and Health Care Indemnity, Inc., a Colorado-based insurer.

Ex-Senior Underwriter casts doubt about legality of Imagine Group operations

April 7, 2007
Bermuda-based Imagine Group Holdings Ltd. reorganized its operations last year due to regulatory and tax issues in the United States, it has been claimed.Against a backdrop of regulatory and criminal investigations in the U. S., Imagine Group sought legal advice from law firm Sidley Austin, according to former employee Maureen J. Caulfield.

Everest Re subsidiaries sue for $80 m damages in U. S.

April 7, 2007
Two wholly-owned, U. S. subsidiaries of Bermuda-domiciled Everest Re Group Ltd. are seeking $80 million in damages in New Jersey, alleging fraud against a client.Details are contained in two civil lawsuits that were filed on February 7 and March 14, 2007 at the U. S. District Court for the District of New Jersey by Everest National Insurance Company and Everest Reinsurance Company, which are both incorporated in Delaware, based in Liberty Corner, New Jersey.

Settlement talks delay $40 m Annuity & Life Re/Transamerica arbitration

April 7, 2007
An arbitration hearing scheduled for April regarding a $40 million damages claim against Bermuda-based Annuity and Life Re (Holdings) Ltd. by Transamerica Occidental Life Insurance Company has been called off pending settlement negotiations.Details are contained in a note to the financials headlined “Contingencies” that appears in Annuity & Life Re's 2006 financials, which were released on March 21, 2007.

UK Mutual Steamship sued over accident on Mississippi River

March 9, 2007
A Bermuda-based mutual insurer is being sued for damages of $121,680 in the United States regarding an accident on the Mississippi River. The United Kingdom Mutual Steamship Assurance Association (Bermuda) Ltd. is a defendant in a complaint that was filed at the U. S. District Court for the Eastern District of Louisiana on January 2, 2007 by Florida Marine Transporters, Inc., TUG Cynthia Inc., and FMT Industries LLC. Other defendants are M/V Ernst Oldendorff, Stafford Shipping Corp., and Egon Oldendorff OHG.

RenRe settles class action litigation for $13.5 m

March 9, 2007
Bermuda-based property catastrophe reinsurer RenaissanceRe Holdings Ltd. has agreed to settle a consolidated shareholder class action lawsuit at the U. S. District Court for the Southern District of New York by paying $13.5 million. RenRe announced the settlement on February 14, 2007 - five days after the firm disclosed that it had agreed to pay $15 million to settle a securities fraud lawsuit regarding the same conduct that was brought at the same court by the SEC. Neither settlement required the reinsurer to admit liability.

Insolvencies of ex-MRM subsidiaries balloon in 2006

March 9, 2007
The net insolvencies of two former operating subsidiaries of Bermuda-based Mutual Risk Management Ltd. rocketed from $334.3 million to $852.6 million in 2006, according to their liquidator. The deficits of Legion Insurance Company and Villanova Insurance Company increased from $225.3 million to $614 million and from $109 million to $238.6 million, respectively, during the year.

XL and AWAC settle Hurricane Katrina-related lawsuit in Louisiana

February 9, 2007
Two Bermuda insurers have settled a civil lawsuit in which a waste management insured accused them of failure to pay claims stemming from Hurricane Katrina. A stipulation of dismissal was entered on February 5, 2007 in an action that was filed by Waste Management Inc., a Delaware corporation based in Houston, Texas; Waste Management Louisiana LLC, a Delaware corporation based in Baton Rouge, Louisiana; and Waste Management of Mississippi Inc., a Mississippi corporation based in Baton Rouge, Louisiana, against XL Insurance (Bermuda) Ltd., and Allied World Assurance Company Ltd. at the U. S. District Court for the Eastern District of Louisiana on August 25, 2006.

RenRe settles SEC lawsuit by agreeing to pay $15 m penalty

February 9, 2007
Property catastrophe reinsurer RenaissanceRe Holdings Ltd. has agreed to pay a $15 million civil penalty to settle a lawsuit filed against it in New York by the U. S. Securities and Exchange Commission. RenRe has also agreed to an injunction prohibiting future violations of the Securities Act of 1933 and the Securities Exchange Act of 1934 and to retain an independent consultant to review internal controls, according to the SEC, which announced the settlement in a press release issued on February 6, 2007 - the same day that the complaint was filed at the U. S. District Court for the Southern District of New York.

Class action securities lawsuit filed against Quanta Capital

February 9, 2007
A class action securities fraud lawsuit has been filed in the United States against Bermuda-based, NASDAQ-listed specialty insurer Quanta Capital Holdings Ltd., seven officers and directors, and two underwriters. The complaint was filed at the U. S. District Court for the Southern District of New York on February 5, 2007 on behalf of all purchasers of Quanta's common and preferred shares between December 14, 2005, when Quanta completed a $135 million equity offering, and March 2, 2006.

AWAC seeks to avoid contributing $15 m to JP Morgan’s Enron/WorldCom settlements

February 9, 2007
Bermuda-based Allied World Assurance Company Ltd. is seeking to avoid paying $15 million in claims relating to JP Morgan's combined $4.2 billion settlements of Enron and WorldCom litigation. Details are contained in a civil complaint that was filed by AWAC against Boston-based Lexington Insurance Company at the U. S. District Court for the District of Massachusetts on January 16, 2007.

Arch Capital subsidiaries sued for up to $34 m

February 9, 2007
Two U. S. subsidiaries of Bermuda-based Arch Capital Group Ltd. are being sued for up to $34 million in compensatory damages for allegedly failing to honor a construction bond. Details are contained in a civil complaint that was filed by Whitlock Mills LP, a Maryland limited partnership based in Columbia, Maryland, at the U. S. District Court for the District of New Jersey on December 29, 2006.

Former officer sues Alea Group over securities losses

February 9, 2007
The Bermuda-headquartered Alea Group is being sued by a former officer who claims to have suffered financial, emotional and reputational harm as a result of the company allegedly misrepresenting its financial position.

Fencourt Re seeks to avoid $85 million in losses

December 7, 2006
A Bermuda-based reinsurer has filed a lawsuit in the United States in an attempt to avoid being stuck with losses totaling $85 million. Fencourt Reinsurance Company Ltd., which is incorporated and based in Bermuda, filed a civil complaint against ITT Industries Inc., which is incorporated in Indiana and based in New York, at the U. S. District Court for the Eastern District of Pennsylvania on October 24, 2006.

Bermuda insurers sued for $100 m by Citigroup

December 7, 2006
Three Bermuda-based insurers are being sued by Citigroup Inc. for allegedly failing to honor up to $100 million of claims concerning the settlement of litigation for the alleged mis-selling of financial products. Citigroup Inc., a Delaware corporation based in New York, as successor in interest to Associates First Capital Corporation, filed a civil complaint at the 164th District Court of Harris County, Texas on October 23, 2006, with the case being transferred to the U. S. District Court for the Southern District of Texas on November 17, 2006.

Stirling Cooke Bankruptcy Trustee sues Goldman Sachs, auditor, D&O, law firm for $80 m

October 5, 2006
Goldman Sachs refused to pull the plug on one of the biggest frauds the insurance industry has ever known for fear it would de-rail the 137-year-old investment banker's own $3.66 billion IPO in May, 1999, it has been claimed.The extraordinary allegation appears in a civil complaint that was filed recently in the United States by the Bankruptcy Trustee of Bermuda-based broker AlphaStar Insurance Group Ltd., formerly known as Stirling Cooke Brown Holdings Ltd., and several of its subsidiaries and affiliates.

ACE, Odyssey Re & others lose $175 m arbitration award hearing

October 5, 2006
A United States court has entered an order confirming a $175 million arbitration award in favor of an AIG-subsidiary against several insurers, including two that are based in Bermuda.The U. S. District Court for the Southern District of New York issued a judgment for American Home Assurance Company on September 21, 2006 - 16 days after the petition was filed.

ACE moves to protect reputation in Philadelphia

October 5, 2006
ACE Ltd. has taken action to protect its reputation in the United States after six employees of a Philadelphia insurance brokerage with a similar name were charged with fraud.ACE, which is domiciled in the Cayman Islands but headquartered in Bermuda, and ACE INA Holdings Inc., incorporated in Delaware, based in Philadelphia, Pennsylvania, filed a complaint against ACE Insurance Agency LLC, and Abe Insurance Agency LLC, both incorporated in Philadelphia and based in Allentown, PA at the U. S. District Court for the Eastern District of Pennsylvania on August 31, 2006.
reuben-jeffery-III

Goldman Sachs says it is ‘blameless’ in Stirling Cooke collapse, describes its governance as ‘textbook’

October 5, 2006
Despite taking Bermuda-based broker AlphaStar Insurance Group public in a $50 million IPO and being its biggest shareholder during an astonishing crime spree that caused losses estimated at more than $1 billion to the world insurance markets, Goldman Sachs is not accepting any responsibility for what happened.In fact, the actions of its two directors on AlphaStar's board, Reuben Jeffery III and Jean de Pourtales, were “a textbook illustration” of how to govern a company, according to Goldman's motion to dismiss the action on September 15, 2006.

Scottish Re is lone Q2 loss-maker of 14 reporting Bermuda insurers

August 8, 2006
Of the 14 publicly-listed, Bermuda-based insurers and reinsurers who recently filed their second quarter earnings with the SEC, only Scottish Re reported a loss.Commenting on a loss of $2.43 per share, or $121 million, Scottish Re's Interim CEO, Paul Goldean, said: “The results for the quarter are a sharp departure from our original projections and estimates provided to our stakeholders”.

RenRe makes $15 m settlement offer to SEC

August 8, 2006
RenaissanceRe has offered to pay $15 million to settle an investigation by the United States Securities and Exchange Commission into the firm's restatement of its financial results for 2001, 2002 and 2003.“Pursuant to the offer of settlement, which the SEC staff has indicated that it will recommend to the SEC Commissioners, the Company will consent, without admitting or denying any wrongdoing, to entry of a final judgment enjoining future violations of certain provisions of the federal securities laws and ordering the Company to pay disgorgement of $1 and a civil penalty of $15 million,” RenRe announced in a news release on July 31, 2006.

Quanta Capital rewards another senior officer for failure

August 8, 2006
One of Bermuda's worst-managed insurers - Quanta Capital Holdings Ltd. - has shelled out another massive severance package to a senior officer.In an SEC filing on July 27, 2006, the firm disclosed that it will pay $2 million to Michael J. Murphy, the firm's Deputy Chairman and former Chief Operating Officer. Murphy, 55, served as COO of Quanta Capital from its inception in 2003 until March, 2005, after which he served as “Chairman of the Office of Strategic Innovation”, and as Quanta's Deputy Chairman from 2003 until his departure from the firm, effective July 25, 2006.

Wife of AXIS Capital boss wins US$91 m divorce pay-out

August 8, 2006
In what is believed to be the biggest divorce settlement in a contested case in British history, AXIS Capital CEO John Charman has been ordered to pay £48 million (US$91 million) to his estranged wife. The award represents 37% of the couple's estimated £131 million (US$250 million) fortune.Charman, who is believed to have homes in Bermuda, Atlanta and Florida, has vowed to appeal, describing the judgment as “poor and blatantly discriminatory” and the award as “grotesque and unfair”.

Class action lawsuit filed against Scottish Re after share price plummets

August 8, 2006
A class action lawsuit alleging securities violations has been filed in the United States against Bermuda-based life annuity reinsurer Scottish Re Group Ltd.It was brought at the U. S. District Court for the Southern District of New York on August 2, 2006 - just two days after Scottish Re's share price fell by 75% from $16 to $3.99 on the New York Stock Exchange in one trading day.

U. S. judge rejects discovery requests by ex-RenRe officers fighting SEC lawsuit

July 12, 2006
Former officers of Bermuda-based RenaissanceRe recently suffered two discovery setbacks in their defense of a securities fraud lawsuit brought by the United States Securities and Exchange Commission.On June 25, U. S. District Judge Gerard E. Lynch, sitting at the U. S. District Court for the Southern District of New York, denied an application by Bermudian national Michael Cash to delay Cash's deposition until after he has deposed co-defendant and fellow former RenRe officer Martin Merritt and non-party Jonathan Reiss.

AWAC keeps regulatory investigation out of IPO prospectus — then comes clean

July 10, 2006
AIG-sponsored Allied World Assurance Co. Holdings Ltd. has finally decided to disclose to potential investors in its $500 million IPO that it has been the target of a regulatory investigation for over seven months.In its third amended securities registration statement that was filed with the SEC on June 19, 2006, AWAC revealed that it had received a Civil Investigation Demand from the Antitrust and Civil Medicaid Fraud Division of the Office of the Attorney General of Texas as long ago as November 8, 2005.

Fidelity increases investment in Bermuda insurance market

July 10, 2006
Mutual fund firm Fidelity has increased its position as the largest single investor group in the Bermuda insurance and reinsurance market.The Boston, Massachusetts-based group owns at least five per cent of the common shares of 12 of the 16 companies whose ownerships were reviewed by InsideBermuda, compared with eight of 14 companies in a similar review last year. As of June 30, 2006, Fidelity's total stake in the Bermuda market had a stock market value of approximately $5.6 billion.

2006 Bermuda Insurance Stock Ownership Review: Stanard’s RenRe stake climbs to $245 m

June 7, 2006
James Stanard may have departed as RenaissanceRe's Chairman and CEO in less-than-ideal circumstances last November but he remains the firm's biggest individual shareholder, with a holding worth $245 million. That was more than enough to put him at the top of InsideBermuda's 2006 review of own-company shareholdings held by current - or, in the case of Stanard, recently-departed - officers and directors of Bermuda's publicly-listed insurers.

Quanta Capital goes into run-off

June 7, 2006
Troubled Bermuda insurer Quanta Capital Holdings Ltd. announced on May 25 that it had gone into run-off, with the exception of its Lloyd's of London environmental consulting business, ESC.

XL & other Bermuda-related firms sued for $32.4 m in Texas

June 7, 2006
XL Insurance (Bermuda) Ltd. and other companies with Bermuda connections are being sued for $32.4 million in the United States regarding the alleged non-payment of a business interruption claim. The complaint was filed at the District Court of Harris County, Texas, 113th Judicial District on December 5, 2005 and transferred to the U. S. District Court for the Southern District of Texas on April 7, 2006 following an application by XL.

American Indemnity & affiliates win $2.4 m arbitration award

June 7, 2006
A Bermuda-registered insurer and two co-plaintiffs have been awarded $2.4 million in arbitration concerning a general agency dispute. American Indemnity Insurance Company Ltd., of Bermuda; Star Insurance Company, incorporated in Michigan; and Williamsburg National Insurance Company, incorporated in California, were awarded the amount against Risk Marketing Group Inc., and Cebcor Service Corporation, both incorporated in Illinois, on November 3, 2005 by a panel of arbitrators that comprised Hugh Alexander (Umpire), Keefe Brooks, and Richard Baca.

Class Action lawsuits filed against PXRE Group

June 7, 2006
Three shareholder class action lawsuits were filed against PXRE Group Ltd., one former officer, and one current one from May 3-10 at the U. S. District Court for the Southern District of New York. The plaintiffs have accused PXRE, Jeffrey L. Radke, the firm's President and CEO, and John M. Modin, who was its CFO until he resigned on January 6, 2006, of violating the Securities Exchange Act.

Bermuda insurers seek to recover $10 m payout for Las Vegas casino fire

June 7, 2006
Three Bermuda insurers are seeking to recover a $10 million insurance pay-out from contractors they blame for a fire that closed the Bellagio hotel and casino in Las Vegas for four days in 2004. Everest Reinsurance (Bermuda) Ltd., Allied World Assurance Company Ltd., both incorporated and based in Bermuda, and Arch Insurance Group, incorporated in Bermuda, based in New York, filed a civil lawsuit at the U. S. District Court for the District of Nevada on May 4, 2006. Co-plaintiffs are Lexington Insurance Company, incorporated in Delaware, based in Boston, Massachusetts; and Westchester Surplus Lines Insurance Company, incorporated in Georgia, based in Philadelphia, Pennsylvania.

Offshore insurance giant settles regulatory probe

April 27, 2006
Bermuda's largest publicly-listed insurer has agreed to pay $80 million to settle allegations that it engaged in bid-rigging and improper reinsurance transactions.New York Stock Exchange-listed ACE Ltd., which is headquartered in Bermuda, although it is domiciled in the Cayman Islands, also issued a public apology as part of yesterday's settlement with New York State Attorney General Eliot Spitzer and New York State Insurance Superintendent Howard Mills, Connecticut Attorney General Richard Blumenthal and Illinois Attorney General Lisa Madigan.

Willis Group and ex-employees settle litigation

April 6, 2006
A civil lawsuit brought in the United States against Bermuda-registered risk manager/insurance broker Willis Group Holdings Ltd. by four former employees was dismissed was voluntarily dismissed on March 7, only 11 days after it was filed.The action had been brought at the U.S. District Court for the District of New Jersey on February 24, 2006 by Alfred C. Marquis Jr., Peter H. Forenza, Robert B. Pitts, and John J. Sciortino Jr., all residents of New Jersey, all former employees of Willis, and all licensed insurance brokers, according to the complaint.

Universal Re sued in Georgia

April 6, 2006
Bermuda-based Universal Reinsurance Company Ltd. has been named as a defendant in a civil lawsuit filed in the United States.The action was filed by Holden & Company Inc., a self-insurance administrator based in Savannah, at the U. S. District Court for the Southern District of Georgia on December 19, 2005.Defendants are Universal Re, Employers OneSource Inc., incorporated in Mississippi; Leslie Smith, President of Employers OneSource (EOS); Direct General Inc., William C. Adair Jr., Guy Carpenter & Company and Dean S. Minnie, all of whose domiciles are not identified in the complaint.

Overseas Partners goes into liquidation

April 6, 2006
Bermuda-based Overseas Partners Ltd. went into voluntary liquidation on January 31, 2006 - nearly four years after going into run-off. Peter C.B. Mitchell, 51, and Nigel J.S. Chatterjee, 52, both of PricewaterhouseCoopers (Bermuda), have been appointed liquidators.The process should be “substantially completed, if not completed, by the end of 2006 if events unfold according to plan”, the firm stated in a recent SEC filing.

Legion Insurance and Villanova Insurance insolvent by an estimated $334 m

April 6, 2006
Two former operating subsidiaries of Bermuda-based Mutual Risk Management Ltd. had a combined net deficit of $334.4 million as of December 31, 2005, according to their liquidator.Legion Insurance Company and Villanova Insurance Company had deficits of $225.4 million and $109 million, respectively, stated their Statutory Liquidator, Pennsylvania Insurance Commissioner Diane Koken, in her report for the fourth quarter of 2005.

Glencoe Insurance sued in U. S.

April 6, 2006
Bermuda-based Glencoe Insurance Ltd. is being sued in Florida regarding a claim for damage to an office building caused by Hurricane Jeanne in 2004The action was filed by Florida-registered Commerce Pointe Inc. against Glencoe Insurance at the Circuit Court of the 15th Judicial Circuit, in Palm Beach County, Florida, on January 13, 2006 and was moved to the U. S. District Court for the Southern District of Florida on February 16, 2006. The causes of action are breach of contract, and statutory bad faith.

ESG Re’s John Head gets no respect

April 6, 2006
Although John Head controls 42% of the stock of one of Bermuda's worst-run companies, ESG Re, he is held in such low regard by other shareholders that he still cannot get resolutions passed.The specialist reinsurer he founded announced on March 9, 2006 that a special shareholders meeting had been held in New York two days earlier. “The meeting was requisitioned by John C Head III, the Company's former Chairman, and his affiliated entity, ESG Partners L.P., to consider seven resolutions pertaining to amendment of the Company's byelaws,” stated the firm. “Of the 11,058,069 shares outstanding, 7,443,833 were represented in person or by proxy at the meeting. Mr. Head and ESG Partners L.P. voted their shares but did not attend the meeting to present their proposals. All of the proposals were defeated.” The firm did not give any details about what the proposals entailed.

Third-time lucky for Spencer-Arscott

April 6, 2006
After two previous attempts at heading a Bermuda reinsurer ended in fiasco, Robin Spencer-Arscott has been appointed President of a new firm sponsored by XL Capital Ltd.Cyrus Reinsurance Limited and its parent, Cyrus Reinsurance Holdings Limited, were formed on October 28, 2005 with initial capital of $525 million. The group also has an affiliate in the Cayman Islands called Cyrus Reinsurance Holdings SPC, which is a segregated portfolio company.

Bermuda insurers well-positioned for 2006 [Just like they were for 2005!!!]

March 6, 2006
Property catastrophe reinsurer PXRE Group was the worst of the bunch as 15 Bermuda-based, publicly-listed insurers reported their - mostly horrendous - fourth quarter results to the SEC during February. Two-thirds of the firms reported net losses, while only two actually managed to make an underwriting profit, as opposed to relying on investment returns to compensate for a lack of underwriting success. Just about the only thing that many firms were successful at towards the end of 2005 was tapping into the seemingly endless supply of capital available to the industry.

Bermuda captive challenges validity of $400,000 claim

February 5, 2006
A Bermuda-based captive and its U. S. parent have filed a lawsuit in Arizona in an attempt to avoid having to pay reinsurance claims totaling $409,586. The lawsuit was filed by Kettlebrook Insurance Company Ltd., which is incorporated in Bermuda, and Invitrogen Corporation, which is incorporated in Delaware and based in California, against Employers Insurance Company of Wausau, a.k.a. Employers Insurance of Wausau, a Wisconsin-based mutual insurer, at the U. S. District Court for the District of Arizona on January 18, 2006.

Court allows Stirling Cooke Trustee to subpoena ex-officers

February 5, 2006
The Bankruptcy Trustee of the Bermuda-based group formerly known as Stirling Cooke has received court approval to subpoenas to three former officers as part of an investigation into its financial affairs. In an order dated December 19, 2005, U. S. Bankruptcy Judge Stuart M. Bernstein, sitting at the U. S. Bankruptcy Court for the Southern District of New York, ordered that subpoenas can be served on former officers Stephen A. Crane, President, Chairman, and CEO; Anthony J. Del Tufo, Chief Financial Officer; and James Lawless, General Counsel, compelling them to provide documents and oral testimony.