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To the editor: The Sept. 22 article, "Mission Veterans Fete End of Reinsurance Battle" sadly gives the impression that the group of reinsurers involved were contesting cessions from the entire Mission organization, whereas the subject lawsuit related only to the business ceded to them as pool members of Pacific Reinsurance Management Corp., an MGA that was one of many subsidiaries of Mission Insurance Group Inc.
Indeed, a number of these "veterans" have settled their obligations to other Mission entities at 100 cents on the dollar and all of them have contributed to a settlement amount of approximately $43 million arising from the legal proceedings described in your article.
In addition, those who have followed the fortunes of the Mission estates will recall that in an earlier dispute with another, similar group of PRMC pool members-Abeille-Paix et al.-the majority of an arbitration panel of reinsurance professionals found no evidence of fraud on the part of PRMC and ordered the payment of virtually all of the recoverables due as a result of the pool members' participations in PRMC business.
The recent ruling obtained by the "veterans" who celebrated in Monte Carlo was given by a referral panel of retired judges who, at the outset, admitted to little or no knowledge of the reinsurance business.
R. Gaylord Smith, counsel to these "veterans," is reported as saying that Mission has collected more than $1 billion as a result of "bullying" by the Mission liquidator's lawyers. It is true that, to date, the Mission liquidator has marshaled a total amount of assets in excess of $1.4 billion, the majority of which arises from reinsurance recoverables. However, most of the reinsurance collections have emanated from mutual agreements negotiated between reinsurers and the Mission liquidator's staff as respect contracts that have nothing whatever to do with the PRMC operation.
At Mission, we say that reinsurers that would rather not pay will serve on the ceding company a list of allegations that appear in page one of an imaginary industry booklet entitled, "The Reinsurers' Handy Guide to Contract Rescission."
Your picture of the group of "veterans" gathered in Monte Carlo clearly shows their happiness that, this time, it worked. For an earlier group of PRMC pool members, it did not.
Geoffrey A. Nicholls
Chief Executive Officer
Mission Insurance Cos.' Trusts