Bermuda, Aon agree to action on Vesttoo cells
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Bermuda’s insurance regulator said Friday it has agreed with Aon PLC to appoint provisional liquidators for cells associated with troubled reinsurance intermediary Vesttoo Ltd. that are contained in an Aon segregated account company domiciled on the island.
In a statement, the Bermuda Monetary Authority said: “Both parties have agreed for the Bermuda Supreme Court to appoint Charles Thresh and Michael Morrison of Teneo (Bermuda) Ltd. to act as joint provisional liquidators for White Rock Bermuda with respect to the impacted Vesttoo cells.”
The BMA and Aon will focus on “pursuing maximum recovery” for cedents affected by alleged fraud involving Vesttoo, the statement said.
Vesttoo, which has been under fire since allegedly fraudulent letters of credit were discovered last month, worked with Aon unit White Rock Insurance (SAC) Ltd. on various intellectual property insurance deals that helped start-up companies secure loans based on intellectual property assets.
Aon secured a temporary restraining order in federal court in New York last week freezing Vesttoo’s assets, but the case was suspended after Vesttoo filed for Chapter 11 bankruptcy protection earlier this week.
The Vesttoo scandal has provoked concerns over the security of reinsurance coverage supporting various fronting companies and other insurers.
