The Bermuda Monetary Authority (BMA) and White Rock (SAC) Ltd., insurance and reinsurance broker Aon’s segregated accounts and transformer vehicle, have launched action in the Supreme Court of Bermuda to pursue “maximum recovery” for re/insureds impacted by the alleged fraud linked to Vesttoo reinsurance deals.
A statement released today by the BMA, Bermuda’s integrated regulator of the financial services sector, comes after beleaguered Vesttoo filed for Chapter 11 bankruptcy protection amid allegations of fraudulent LOCs used to facilitate reinsurance transactions.
Aon’s White Rock structure had previously demanded the return of a significant $136.7 million in collateral that 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 the (re)insureds impacted by the alleged fraud involving Vesttoo related segregated accounts (Vesttoo Cells),” says the BMA’s statement.
The announcement confirms that this action applies solely to the impacted Vesttoo cells, and adds that White Rock Bermuda continues to operate in the ordinary course of business, noting that “this action has no effect on any other cells or White Rock Bermuda clients.”
Both the BMA and White Rock Bermuda have agreed for the island’s Supreme Court to appoint Charles Thresh and Michael Morrison of Teneo (Bermuda) Limited to act as Joint Provisional Liquidators (JPLs) for White Rock Bermuda.
Together, the JPLs and the Board of Directors and management team of White Rock Bermuda will pool their resources to address this matter, explains the BMA.
Vesttoo’s bankruptcy filing in the U.S. resulted in the temporary restraining order to freeze its assets being vacated by the judge, and essentially halted the action in New York brought against it by White Rock. Now, it seems, White Rock together with the BMA are pursuing another avenue to take action against the insurtech.
