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Bermuda Commodities Exchange loses money for AIG

September 30, 1999
The Bermuda Commodities Exchange, which suspended trading in the first week of August, appears to have been an expensive failure for the American International Group.AIG is believed to have borne the brunt of the estimated losses of more than $2 million suffered by the experimental insurance derivatives exchange in its two -year life-span.

Aneco Re wins $35 m UK court decision against Johnson & Higgins

August 31, 1999
Aneco Reinsurance Underwriting, the Bermuda-based reinsurance group that went into liquidation in 1992, has won US$34.98 million in damages for negligent advice given by US brokerage Johnson & Higgins, reported the Financial Times on July 31, 1999. The broker was also held to be liable for the insurer's losses.

Transamerica wins arbitration to rescind Stirling Cooke-brokered spiral business

August 31, 1999
Stirling Cooke Brown Holdings has suffered a major setback in an arbitration held recently in London. The arbitration panel decided by three votes to nil to rescind reinsurance contracts for 1993 and 1994 that the San Francisco-based Transamerica insurance/financial services group had with Duncanson & Holt, Chubb Insurance Group and Chubb-subsidiary Federal Insurance Company.

Overseas Partners to lose $370 of premiums following UPS Tax Court decision

August 31, 1999
Overseas Partners Limited expects to lose about 35 per cent of its annual premium volume as a result of the US Internal Revenue Service's recent favorable tax ruling over United Parcel Service of America, whose shipper's risk program is OPL's biggest source of revenue. The annual dollar cost to OPL is likely to be in the region of $370 million in lost premiums and approximately $200 million of net income, according to the company's own estimates.

New Unicover lawsuits

July 31, 1999
US and Canadian insurers this month started three new legal actions that will help to determine who will pay for the huge losses associated with the Unicover workers' compensation insurance pool. Sun Life Assurance Co. of Canada announced it had started arbitration to void Unicover-related reinsurance contracts, Phoenix Home Life Mutual Insurance Co. filed a lawsuit in the United Kingdom in an attempt to force a broker, Rattner Mackenzie, to reveal more information about Unicover and it is also believed that Lincoln National Life has filed a suit.

New Stirling Cooke boss, Len Quick, is former defendant in RICO action

July 31, 1999
Mark Cooke this month stepped down as CEO of Goldman Sachs-controlled Stirling Cooke Brown Holdings following the company's disastrous performance since going public in November, 1997. But the man promoted to temporarily replace him and steady the firm in the face of widespread fraud allegations was himself accused of impropriety with his previous employer, we can reveal. Len Quick, 57, who was previously the head of Stirling Cooke's North American operations, was elevated to Chief Operating Officer of the group and interim CEO until a permanent replacement for Cooke is found.

OBNR publisher almost imprisoned for refusing to reveal sources for stories

June 30, 1999
For those who are not already aware from other media outlets, David Marchant, the publisher of this newsletter, came close to being imprisoned in Bermuda this month for refusing to reveal his sources for articles he had written about Bermuda Fire & Marine Insurance Company. Marchant was giving evidence during what is probably Bermuda's biggest ever civil trial in which some of the island's most prominent businessmen and companies are accused of defrauding creditors of BFMIC (in liquidation) of more than $50 million of assets.

Stirling Cooke Brown lays off Bermuda staff

June 30, 1999
Beleaguered Stirling Cooke Brown Holdings Ltd. is laying off staff in Bermuda and is in the process of moving its Bermuda-based broking activities to London, Inside Bermuda has been told. The move comes after Goldman Sachs, which is the biggest single shareholder in Stirling Cooke, told management that it was taking more control of the company, said a source.

Brian O’Hara tops Bermuda shareholders’ list with $65 million of XL Capital stock

June 30, 1999
XL Capital President and CEO Brian O'Hara has topped a list that measures the value of shares that officers of Bermuda-based, publicly-listed insurers own in their own company. O'Hara is the beneficial owner of shares worth approximately $64.6 million in XL Capital, according to a review conducted by Miami-based Offshore Business News & Research, Inc., which publishes this newsletter.

Fidelity fund group biggest investor in Bermuda insurance market

June 30, 1999
The Boston-based Fidelity Management and Research group is the broadest investor in the Bermuda insurance market, XL Capital has the oldest directors and the directors of Stirling Cooke Brown Holdings are not only the youngest - with an average of just 40 - but also the fewest in number. Directors and officers of Stirling Cooke also own more of their company than for any other firm. These are some of the results of a comprehensive survey of the ownership and governance of Bermuda-based, publicly-listed insurance entities by Miami-based Offshore Business News & Research Inc., which publishes this newsletter.

Stirling Cooke latest: Director resigns, new unpaid claim goes to arbitration

May 31, 1999
May was another bad month for Stirling Cooke Brown Holdings, which suffered the resignation of a director, announced that it had become involved in yet another arbitration in London and reported that quarterly earnings were down by 11 per cent and that projected annual net income for fiscal 1999 is 25 per cent less than in 1998. The resignation of director Warren Cabral, effective May 13, came a month after the company's auditor, KPMG Peat Marwick, resigned.

James Stanard tops insurance compensation package chart for 1998

May 31, 1999
RenaissanceRe's President and CEO, James Stanard, was the best compensated officer of a Bermuda-based, publicly-listed insurance entity for the second consecutive year in fiscal 1998, according to a compensation review by Miami-based Offshore Business News & Research, Inc., which publishes this newsletter.

David Brown and Grant Gibbons walk away from Gemini Re

May 5, 1999
Former Centre Solutions boss David Brown and Grant Gibbons, Bermuda's former Minister of Finance, are no longer part of Gemini Re Holdings, OffshoreAlert can reveal. Brown was the President and CEO of the proposed reinsurer, while Gibbons was the Chief Financial Officer and Treasurer.

Attorneys arrive for Bermuda Fire & Marine Insurance trial

April 30, 1999
Some of the UK's top attorneys began arriving in Bermuda this month to prepare for the island's biggest ever civil trial, involving the alleged asset-stripping of the failed Bermuda Fire & Marine Insurance Company by some of the island's most prominent businessmen and companies. The trial, which is due to start on May 4, is expected to last four months and there have been no indications in the run-up to the off that the case will be settled.

Ultimate irony: Hannover Re stock downgraded by Goldman Sachs

April 30, 1999
Hannover Re's purchase of the Clarendon insurance group is already causing the German reinsurer problems. On April 1, less than five weeks after the deal was completed, Hannover Re's stock was downgraded by investment bank Goldman Sachs due to concerns over Clarendon's exposure to the now infamous Unicover reinsurance pool.

Plans to form Global Markets Access reinsurer are shelved

April 30, 1999
Plans to operate a new reinsurance company in Bermuda called Global Markets Access have been shelved. The company's organizers, who included several people involved in the successful launch last year of Annuity & Life Re, could not raise enough start-up capital, even though the original target was lowered from $350 million to $200 million last month.

Stirling Cooke might be up for sale

April 30, 1999
April was yet another disastrous month for Stirling Cooke Brown Holdings as its share price fell by 60 per cent and KPMG Peat Marwick resigned as its auditor after just two years. The company also announced it planned to hire a financial adviser to "explore ways to boost shareholder value", a move which often signals that a company is considering putting itself up for sale.

Marsh & McLennan and JP Morgan fall out after years of success

March 31, 1999
Bermuda's most successful insurance investment partnership, between Marsh & McLennan (now J&H Marsh & McLennan) and JP Morgan, may be coming to an acrimonious end.The two giants of the investment and insurance sectors, who were responsible for the formation of companies such as ACE, EXEL and Mid Ocean, have fallen out, apparently over Merrill Lynch being preferred to JP Morgan in lucrative insurance deals involving companies JP Morgan helped set up, we have been told.

Anne Kast’s Insurance Fund: Time to buy or sell?

March 31, 1999
Anne Kast, the Bermuda-based investment advisor who runs the Bermuda Insurance Index Fund, may have been ruing the timing of a recent full-page advertisement in The Royal Gazette newspaper. In an effort to drum up business for the fund, which was launched last year at $10 and is now at $9.40, readers were treated to massively optimistic buy recommendations of Bermuda's insurance stocks from analysts such as Morgan Stanley, Prudential, Merrill Lynch and Warburg Dillon.

Hannover Re completes Clarendon Insurance acquisition

March 31, 1999
Hannover Re's decision to finally go ahead with its purchase of the Clarendon insurance group after six months of deliberation has surprised several people in the industry who view the acquisition as a 'Beauty and the Beast' arrangement. But it appears that the deal, which finally closed at the end of February, may have substantially altered since it was first announced last August.

Stirling Cooke accused of racketeering and fraud in US lawsuit

March 31, 1999
Stirling Cooke Brown Holdings and some of its subsidiaries, affiliates and officers have been accused of engaging in widespread fraud to the detriment of mostly US insurers and reinsurers in a lawsuit filed by Odyssey Re (London) on March 29 in the United States District Court for the Southern District of New York. As with lawsuits and arbitration proceedings involving Stirling Cooke in London, the company has been accused of running reinsurance spirals purely to generate brokerage commissions and underwriting management fees for itself regardless of the consequences to insureds and reinsureds.

Stirling Cooke discloses London arbitrations and lawsuits

March 31, 1999
Although readers of this newsletter have known for several months about the arbitrations that Stirling Cooke Brown Holdings has been involved with in London, the company only declared the hearings to the SEC this month in its 10 K filing. The company also disclosed that it is a defendant in seven different lawsuits filed in 1998 by reinsurers and reinsureds alleging fraud.

Stirling Cooke Brown Holdings in crisis

March 31, 1999
Serious questions about the future of Stirling Cooke Brown Holdings are being raised following the filing of a lawsuit in New York accusing the firm of racketeering and fraud and the collapse of its share price to an all-time low on NASDAQ. The company has also disclosed for the first time in its SEC filings that it is involved in several arbitrations in the UK and is also a defendant in seven different lawsuits that were filed last year by reinsurers and reinsureds claiming to have been defrauded.

Local insurance industry posthumously honors defendant in civil fraud trial

March 31, 1999
In what could easily be construed as a shameless snub to foreign insurance buyers, particularly so close to the start of an embarrassing civil fraud trial, the Bermuda Insurance Institute and local insurer BF&M Ltd. have dedicated a room at the BII offices in Hamilton to the late Charles Collis, the attorney who helped to orchestrate the stripping of $50 million of assets from Bermuda Fire & Marine Insurance two years before it went bust owing creditors over $1.4 billion.

Bott & Associates: ‘We have not been raided.’

March 31, 1999
Bermuda-based Bott & Associates has taken legal advice after the UK-based Insurance Times erroneously reported that the company's offices had been raided in connection with an investigation being carried out by the City of London fraud squad.

Belvedere Insurance liquidators chase ‘illegal’ dividends

March 31, 1999
The liquidators of Belvedere Insurance have placed its holding company, Caliban Holdings Ltd., into provisional liquidation in a bid to recover up to $2.2 million that was dividended out of Belvedere in 1996.Although Malcolm Butterfield and Anthony McMahon are seeking to recover the full amount on behalf of Belvedere's creditors, they are particularly concerned about $663,000 of the dividend that was technically illegal under Bermuda law.

Bermuda Fire & Marine Insurance trial set to start on May 4, 1999

February 26, 1999
What is probably the most eagerly-awaited civil trial in Bermuda's history - involving the alleged $50 million asset-stripping of Bermuda Fire & Marine Insurance Company while it was known to be insolvent - is scheduled to start on May 4, 1999. The trial, in which some of the island's best-known businessmen and companies are defendants, is expected to last four months.

TOPS Insurance goes into voluntary liquidation

February 26, 1999
TOPS Insurance Ltd., which is managed by Bermuda-based Oil Management Services Ltd., announced on February 2, 1999 that it was going into voluntary liquidation. TOPS wrote total loss insurance coverage for offshore oil platforms mainly situated in the North Sea.

Mutual Risk Management is Bermuda’s top insurance stock for second straight year

January 29, 1999
For the second consecutive year, the common stock of Mutual Risk Management has outperformed all other Bermuda-based, publicly-listed companies operating in the insurance/reinsurance sector. MRM's stock achieved a total investment return of 31.39 per cent for 1998, way ahead of its nearest rival, EXEL, which returned 20.93 per cent to investors. MRM's stock has now returned 100 per cent in two years.

Gemini Re Holdings files SEC prospectus for $400 million IPO

January 7, 1999
Bermuda-registered Gemini Re Holdings Ltd. today filed an S-1 registration statement with the SEC as the first step towards a proposed $400 million IPO. It is intended at this stage that the offering, which is being handled by Merrill Lynch and Chase Securities, will be valued at $15 per share and that the shares will be listed on NASDAQ.

Bruce Barone abruptly leaves Overseas Partners

December 31, 1998
Bruce Barone suddenly left as President and CEO of Bermuda-based reinsurer Overseas Partners Ltd. amid rumours that the company may have lost money trading in derivatives. No official reason has been given for Barone's departure but the speed of his exit and the fact that no replacement has been lined up indicates there was a major disagreement between Barone and the company's board of directors.

Grant Gibbons involved with proposed $1 billion Bermuda reinsurer

December 31, 1998
Former Bermuda Finance Minister Grant Gibbons has been appointed a founding director of a newly-formed holding company set up to raise $1 billion for a new reinsurer in Bermuda, we can disclose. The involvement of Gibbons, who is part of one of the most influential and wealthiest families in Bermuda, is a shot in the arm for the project, whose existence we revealed last month.

Carlos Miro: ‘Mark Cooke knew I was a crook but did business with me anyway’

November 30, 1998
The seemingly never-ending flow of negative information that is passed our way about Bermuda-based Stirling Cooke Brown Holdings Limited continued this month when our attention was drawn to Page 43 of the 1994 'Wishful Thinking' report published by a US congressional sub-committee chaired by John Dingell. The content of this page formed part of a look at the illegal activities of Carlos Miro, who received a lengthy prison sentence in the US for insurance fraud in connection with his Louisiana-based company, Anglo-American Insurance, which also had a UK arm.

Stirling Cooke share price roller-coaster

September 30, 1998
The share price of Stirling Cooke Brown Holdings has endured a roller-coaster ride on the NASDAQ stock exchange since our disturbing revelations about the company last month. Following our story, the share price quickly dropped to an all-time low of $11.125, which represented a 63 per cent drop in just five months and a fall of 49 per cent on its IPO price of $22 last November when the company was taken public by Goldman Sachs.

MRM takes battering on Yahoo! stock message board

August 31, 1998
Mutual Risk Management has been one of the best-performing stocks in any sector since it went public in June, 1991 but you wouldn't think so from the postings on a popular Internet message board run by Yahoo! and used by analysts, investors and others to 'discuss' the firm's stock.

Reports implicate Stirling Cooke in fraudulent insurance schemes

August 31, 1998
Two reports into Stirling Cooke Brown that were compiled two years ago by a London firm of insurance investigators on behalf of a client gives an interesting insight into the history of the Bermuda-based insurance broker, particularly allegations that the company was involved in a reinsurance spiral. The alleged spiral that we have been told has dragged Stirling Cooke and the Clarendon group into arbitrations in London at least partly involves North American Fidelity & Guarantee and Stockholm Re (Bermuda).

GTE Re applies to wind-up Belvedere Insurance in dispute over $9M fee

July 31, 1998
A dispute between Belvedere Insurance and GTE Reinsurance Company, which are both based on the island, turned ugly this month when the latter applied to Bermuda Supreme Court to have the former wound up. The irony of GTE Re's application is that the company is believed to be a net debtor of Belvedere's, rather than a net creditor.

Raydon/Stockholm Re in arbitration

July 31, 1998
Two applications have been filed at Bermuda Supreme Court recently in relation to an arbitration between Stirling Cooke Brown subsidiary Raydon Underwriting Management and Stockholm Re (Bermuda), which folded a few years ago.

Florida businessman indicted, Stirling Cooke ordered to place $500,000 into escrow

July 31, 1998
Businessman David Sanz was criminally indicted in the US last month to face charges of racketeering, grand theft and fraud in relation to Florida-based Gulf Atlantic Management Group Inc., which he owned. The offences include an allegation that Sanz illegally stripped off millions of dollars from GAMG over several years and, in a final flourish as the regulatory net closed in, sold its entire book of business of GAMG and that of a related company to Stirling Cooke Insurance Services for $1 million.

Bermuda Fire & Marine liquidators rejected $10-$15 m offer to settle lawsuit

July 31, 1998
Defendants in a fraud lawsuit involving Bermuda Fire & Marine Insurance Company made an offer last year of between $10 million and $15 million to settle the case, OffshoreAlert can reveal. However, Bermuda Fire's liquidators, Ernst & Young, rejected the offer on the grounds that it fell substantially short of what was acceptable, said a source whose company is owed money by Bermuda Fire.

Mark Hardy’s bankruptcy annulled in the UK

July 31, 1998
The bankruptcy of former Bermuda-based businessman Mark Hardy has been annulled in London, OffshoreAlert can reveal. Creditors of seven failed Hardy companies, including Forum, Focus and Aneco, which were all based in Bermuda, agreed to the annulment three months ago in return for Hardy signing over various assets and debt recovery rights relating to his failed business empire.

Kemper Re settles with EMLICO liquidators

June 30, 1998
Kemper Reinsurance and the Bermuda-based joint liquidators of Electric Mutual Liability Insurance Company have announced a settlement of their long and acrimonious dispute over EMLICO's insolvency.