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BOSTON-General Electric Co. and Electric Mutual Liability Insurance Co. are discussing a possible settlement with Massachusetts regulators of issues stemming from EMLICO's controversial 1995 move to Bermuda.
Insurance Commissioner Linda Ruthardt confirmed there are settlement talks but declined to comment on their status. One subject of negotiation, she said, is who will actually participate in any eventual settlement. Potential settling parties include GE, EMLICO and Electric Insurance Co., a former EMLICO unit based in Massachusetts, she said.
The settlement talks were disclosed in a joint court filing by the Insurance Division, GE, EMLICO and EIC. The four asked a Massachusetts judge to delay proceedings in a case in which the Insurance Division sought to enforce a subpoena for EMLICO-related documents against consultant Tillinghast-Towers Perrin.
A GE spokesman declined to comment. EMLICO and EIC representatives could not be reached.
Lawyers for Kemper Reinsurance Co., an EMLICO reinsurer, wrote to Ms. Ruthardt Friday expressing concern about the settlement talks. The lawyers said they had heard unconfirmed reports about the negotiations, including that GE might agree to repatriate EMLICO in exchange for "concessions" from regulators and that regulators might allow EMLICO to remain in Bermuda if GE or EMLICO paid a fine. Kemper Re's lawyers expressed concern about any concessions granted to GE and EMLICO and complained that reinsurers haven't been included in the discussions.
Meanwhile, Allstate Insurance Co.-one of four EMLICO reinsurers that helped ignite the controversy by suing regulators for approving the redomestication-announced Friday that it has settled all insurance and reinsurance disputes with EMLICO's liquidators and GE.
The settlement has been approved by a Bermuda court, and all litigation between the parties will be dismissed, Allstate said. Terms of the settlement weren't disclosed.
Allstate and other reinsurers charged that EMLICO, a longtime GE liability insurer, knew it was insolvent and conspired with GE to mislead Massachusetts regulators into approving the redomestication. Shortly after the move, EMLICO declared itself insolvent by more than $500 million and filed for liquidation, a move reinsurers charge was designed to take advantage of Bermuda's creditor-friendly liquidation law.
Separately, Kemper Re has been given permission by a Bermuda court to appeal a ruling that barred it from seeking judicial review of Bermuda government orders that allowed EMLICO's move.