Vesttoo storm grows as BMA & White Rock join forces
The Bermuda Monetary Authority (BMA) and segregated cell company White Rock Insurance have come together to pursue “maximum recovery” of assets from beleaguered insurtech Vesttoo.
White Rock, which is a subsidiary of insurance broker Aon, had said it was launching arbitration proceedings against Vesttoo to recover $136.7 million in funds disbursed to the troubled company, which hit the headlines in recent weeks.
Vesttoo found a number of investors for White Rock insurance cedants in insurance linked securities, but Vesttoo later learned that some investors had presented fraudulent letters of credit to Vesttoo.
Consequently White Rock said it is launching arbitration proceedings against Vesttoo. It also attempted to freeze the company’s assets in the US, a move which was stymied when Vesttoo put all its companies into Chapter 11 bankruptcy proceedings.
By then, the Bermuda Monetary Authority had already successfully caused Vesttoo’s Bermuda subsidiary, Vesttoo Alpha P&C, to be put into liquidation.
In a statement released last week the BMA said: “The BMA and White Rock Insurance (SAC) [have] jointly agreed to a course of action in the Supreme Court of Bermuda that will focus on pursuing maximum recovery for the (re)insureds impacted by the alleged fraud involving Vesttoo related segregated accounts.
“Both parties have agreed for the Bermuda Supreme Court to appoint Charles Thresh and Michael Morrison of Teneo (Bermuda) Limited to act as Joint Provisional Liquidators (JPLs) for White Rock Bermuda with respect to the impacted Vesttoo Cells.”
It added: “The JPLs and the board of directors and management of White Rock Bermuda will bring their resources together to address the matter. This action applies only to the impacted Vesttoo Cells.
“White Rock Bermuda continues to operate in the ordinary course of business, and this action has no effect on any other cells or White Rock Bermuda clients.”