The Bermuda Monetary Authority (BMA) and White Rock (SAC) Ltd., insurance and reinsurance broker Aon’s segregated accounts and transformer vehicle, launched an action in the Supreme Court of Bermuda to pursue “maximum recovery” for the re/insured affected by alleged fraud linked to Vesttoo’s reinsurance deals.
A statement released today by the BMA, Bermuda’s integrated regulator of the financial services sector, comes after troubled Vesttoo filed for Chapter 11 bankruptcy protection amid allegations of fraudulent LOCs used to facilitate reinsurance transactions.
Aon’s White Rock structure previously demanded the return of a significant $136.7 million in collateral it distributed to Vesttoo.
“The Bermuda Monetary Authority (Authority or BMA) and White Rock Insurance (SAC) Ltd. (White Rock Bermuda) today jointly agreed to a course of action in the Supreme Court of Bermuda that will focus on pursuing maximum recovery for (re ) insureds affected by alleged fraud involving Vesttoo separate accounts (Vesttoo Cells),” the BMA statement said.
The announcement confirmed that this action only applies to the affected Vesttoo cells, and added that White Rock Bermuda continues to operate in the ordinary course of business, saying that “this action will not affect either any other cells or clients of White Rock Bermuda.”
The BMA and White Rock Bermuda have agreed that the island’s Supreme Court will appoint Charles Thresh and Michael Morrison of Teneo (Bermuda) Limited to act as Joint Provisional Liquidators (JPLs) for White Rock Bermuda.
Together, JPL and White Rock Bermuda’s Board of Directors and management team will pool their resources to address this matter, the BMA explained.
Vesttoo’s bankruptcy filing in the US resulted in a temporary restraining order freezing its assets being vacated by a judge, essentially halting the New York action brought against it by White Rock. Now, it seems, White Rock along with the BMA is looking for another way to take action against insurtech.