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HAMILTON, Bermuda -- Ambitious plans to launch a new Bermuda multiline reinsurer with $300 million in capital have collapsed.
The pace of regulatory approval for Resource Underwriters Ltd., which has been drawn out over several months, frustrated investors, and last week the last of the proposed investors pulled his money from the table, said Robin Spencer-Arscott, who was to have been president and chief operating officer of the reinsurer.
Mr. Spencer-Arscott, previously head of Aon Corp.'s operations in Bermuda, said one of the main stumbling blocks in the regulatory approval process had been the presence of David Thirkill as chairman and chief executive officer for the proposed reinsurance company.
Mr. Thirkill previously had been named in a $20 million negligence suit in Bermuda that ultimately was dismissed.
Since the original application to set up Resource was filed in September, however, Mr. Thirkill's direct involvement in the company was ended, according to Mr. Spencer-Arscott.
Nevertheless, the delay in the approval process was too long for the investors, he said.
"The irony is we were a week away from submitting an amended application," Mr. Spencer-Arscott said.
Under the amended application, Resource would have had $30 million in capital supplied by the sole remaining investor: Steven Blumhagen, an investor in Buffalo, N.Y. The other 17 investors in the United States and Canada had pulled out of the venture over the past two months, Mr. Spencer-Arscott said.
With only $30 million in capital, Resource would have reinsured the business of an insurer in Florida that is affiliated with Mr. Blumhagen, Mr. Spencer-Arscott said.
"We were going start off with the $30 million writing affiliated business and some reinsurance business from London, and then we planned to raise another $100 million in 1998," he said.
Under the regulatory process in Bermuda, any new companies must be approved by the Insurance Admissions Committee, which is made up of insurance practitioners in Bermuda.
One of the main problems in obtaining approval from the committee originally was the proposed direct involvement of Mr. Thirkill, Mr. Spencer-Arscott conceded.
Previously, Mr. Thirkill underwrote financial reinsurance for Forum Reinsurance Co. Ltd. in Bermuda before leaving the company in 1990. A Forum unit, Focus Insurance Co., collapsed in December 1990, and Mr. Thirkill and other company officers were named in a $20 million negligence suit, but the action was dismissed in November 1992.