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    Arbitration farce forces Belvedere Insurance into liquidation

    Belvedere Insurance Company Limited has gone into permanent liquidation after an arbitration hearing that could have saved the company turned into a fiasco. BICL had been pinning its hopes for survival on a favourable ruling on its claim for $9.6 million in underwriting and run-off fees against fellow Bermuda company GTE Reinsurance Company Limited. But the arbitration hearing on September 21, 1998 ended almost as soon as it began after panel chairman Sir Charles Staughton QC rejected BICL's choice of liquidator, Richard Grey.

    Arbitrations: What public companies must disclose

    Virtually every insurance or reinsurance contract written in Bermuda these days has a clause stating that claims disputes should be arbitrated, rather than litigated. The intention is to save money and time but a massive drawback for insurance and reinsurance buyers is that, unlike lawsuits, arbitrations are held in secret so you never know who the bad payers are or which companies have practices that border on the criminal.

    MRM takes battering on Yahoo! stock message board

    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

    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).

    Lawsuits brought against Clarendon, Martin Hoffman and Eton Management

    Further allegations of wrongdoing against entities involving Clarendon Insurance Group Managing General Agent Martin Hoffman and Clarendon itself are contained in two US lawsuits currently awaiting trial. Both actions were filed at the United States Bankruptcy Court for the Southern District of New York by the administrators of Qualis Care L. P., which is currently in bankruptcy.

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

    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

    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

    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.

    More trouble for Clarendon Insurance and Martin Hoffman new lawsuit filed in New York

    Clarendon National Insurance Company, Eton Management and Martin Hoffman have all been named as defendants in a lawsuit filed on June 15, 1998 in New York Southern Bankruptcy Court by Qualis Care LP, an entity owned by Hoffman that is currently in administration. Last year, the same plaintiff brought an action in the same court against Hoffman's Barbados-based Knightsbridge International Reinsurance company: a case that is currently awaiting trial.

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

    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

    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.

    John Deuss lays off staff at Transglobal Insurance after disappointing results

    Transglobal Insurance (Holdings), which is owned by Bermuda-based oil magnate John Deuss, is changing its senior management, cutting back expenses and altering its marketing focus in the wake of disappointing results in its first 18 months in business.Transglobal president Lionel ‘Kip' Herring is being laid off shortly and the company's controller, Beau Franklin, left recently to join another firm in Bermuda.

    Kemper Re settles with EMLICO liquidators

    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.

    Stirling Cooke – profit up but what lies around the corner?

    Stirling Cooke Brown Holdings, a publicly-listed company over which there are several question marks, has reported a profit of $4 million for the three months ended March 31, 1998 - a 41 per cent increase on the same period a year earlier. The company reported that revenues went up by 39 per cent to $19.9 million, while reporting that expenses also increased by 39 per cent to $15 million.

    UPS faces $1 billion liability from its Bermuda reinsurer

    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

    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

    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

    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

    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.

    Comp Indemnity Re granted Cayman insurance license

    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

    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

    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

    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

    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.

    Marsh & McLennan steps into punitive damages coverage row in Bermuda

    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

    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.

    Clarendon’s dubious business producers

    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

    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

    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

    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

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

    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

    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

    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

    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.

    Robin Spencer-Arscott attempts to set up new Bermuda insurer

    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

    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.