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Markel Corp. will arbitrate a dispute over $66 million in incentive payments with the fired head of its troubled insurance-linked securities unit who the insurer alleged had an undisclosed romantic relationship with another executive at the unit.
The Richmond, Virginia-based insurer settled a separate lawsuit with the other Markel CATCo Investment Management Ltd. executive, who had sued Markel alleging it had withheld $7.5 million from her in incentive payments.
Both executives were fired in January after Markel said it had discovered the alleged romantic relationship while investigating loss reserve shortfalls at Bermuda-based Markel CATCo.
In a statement Monday, Markel said it “has reached a mutually agreeable settlement with Alissa Fredricks, former Markel CATCo chief executive officer – Bermuda, to resolve the claims that Ms. Fredricks alleged in Massachusetts federal court, and agreed to a binding arbitration with Anthony Belisle, former Markel CATCo chief executive officer, to resolve the claims and counterclaims that Mr. Belisle and the company alleged in New Hampshire federal court.”
The terms of the settlement are confidential, the statement said.
According to court filings, Markel agreed to arbitrate the case involving Mr. Belisle in June and the case involving Ms. Fredricks was voluntarily dismissed earlier this month.
The loss reserve review that Markel alleges revealed the relationship between Mr. Belisle and Ms. Fredricks began in December last year after authorities in the United States and Bermuda made inquiries about loss reserves recorded in late 2017 and early 2018 at Markel CATCo, which provides collateralized coverage for reinsurers, related to 2017 catastrophe losses.
Markel bought the unit in 2015. Mr. Belisle joined as head of CATCo at the time of the purchase and Ms. Fredricks joined the firm from AIR Worldwide in 2016.
In February, about a month after they were fired, the executives filed separate lawsuits against Markel alleging, among other things, that their agreed incentive payments had been withheld, their cellphones had been improperly searched and on discovering that Mr. Belisle and Ms. Fredricks had an alleged personal relationship, Markel amended corporate documents to bar such relationships before firing them.
In a counter suit filed in April, Markel alleged that Mr. Belisle breached the conflict of interest provisions in his employment agreement by recommending steep pay raises and millions in bonus payments to his direct report Ms. Fredricks after he began a secret relationship with her.
A Markel spokeswoman declined to comment on the details of the arbitration and settlement agreements.
Markel Corp. announced Friday that senior executives related to its Bermuda reinsurance unit have left after an internal review uncovered violations of company policies “relating to an undisclosed personal relationship,” the Richmond, Virginia-based insurer said in a statement.