Markel Bermuda Statement On Vesttoo Matter
Markel Bermuda Limited [MBL] announced that it “has been appointed to the statutory committee of unsecured creditors in the chapter 11 bankruptcy in Delaware of Vesttoo Ltd. and its affiliates [Vesttoo].”
A spokesperson said, “MBL’s involvement in the bankruptcy stems from two collateralized reinsurance transactions it entered into utilizing White Rock Insurance [SAC] Ltd.’s segregated account platform. MBL entered into a total of two collateralized reinsurance transactions with White Rock for the benefit of a segregated account owned by a Vesttoo affiliate.
“In the transactions, MBL ceded collateral protection insurance risk to the segregated account, which in turn was required to provide reinsurance collateral to MBL. The letters of credit were provided as collateral backstops in the event claims were made and not paid on the underlying policies for these transactions. These letters of credit, one for $50 million and the other for $77.75 million, were later deemed to be fraudulent. Both letters of credit list an affiliate of Vesttoo as the applicant on behalf of White Rock, with MBL as the designated beneficiary.
“On August 14 and 15, 2023, Vesttoo and various affiliates filed voluntary chapter 11 bankruptcy petitions in the U.S. Bankruptcy Court for the District of Delaware. MBL is exploring remedies against third parties [including Vesttoo in the context of its chapter 11 case] that may be available to MBL to mitigate or eliminate potential losses resulting from the fraudulently tendered letters of credit.
“MBL is a class 4 Bermuda insurer, a subsidiary of Markel Group Inc. and part of Markel’s global specialty insurance operations.
“Markel Group Inc. currently does not expect that losses arising from these fraudulently tendered letters of credit will have a material adverse impact on its results of operations, financial condition or liquidity.”
