Mutual Risk Management is blaming John Hancock Life Insurance Company, formerly John Hancock Mutual Life Insurance company, for allegedly causing the cash flow problems that led to the group?s collapse, according to a report in the January 31 edition of InsideBermuda newsletter.

MRM has filed a lawsuit against Hancock, of Boston, seeking compensatory and punitive damages.

?The loss in market value at MRM was hundreds of millions of dollars and we seek to recover a significant percentage of this from Hancock,? MRM chief executive officer David Ezekiel told InsideBermuda.

In a suit filed at US District Court for the Eastern Division of Pennsylvania on January 26, MRM accused Hancock of ?tortious interference with existing and prospective business relationships?.

The refusal to pay claims by Hancock forced MRM to raise capital on unfavourable terms, caused losses, drops in financial ratings and stock value and led to rehabilitation it was alleged.

According to InsideBermuda, at the heart of the dispute, but not a party to the action, is broker Stirling Cooke.

?During the period from 1992 through 2000, Legion participated in several reinsurance treaties in which John Hancock agreed to reinsure various Legion insurance programmes for the worker?s compensation policies,? the complaint said.

?Stirling Cooke Reinsurance Brokers Ltd. placed retrocession treaties behind John Hancock on this business, the purpose of which was to protect John Hancock against excessive losses.

?Legion was not a party to John Hancock?s retrocession treaties placed by Stirling Cooke.

?In 1999, John Hancock ceased making all payments to Legion pursuant to the Reinsurance Treaties.

?From 1999 until the present, John Hancock has continually and wrongfully refused to fulfil its obligations pursuant to the treaties in an on-going and intentional effort to interfere with MRM?s business relationships.

?Representatives of John Hancock informed MRM and Legion that the refusal to pay Legion was also based upon John Hancock?s belief it had been ?stuffed? by Stirling Cooke with large losses on business, unrelated to Reinsurance Treaties, that an affiliated company of John Hancock was forced to write off.?

The complaint said this was an excuse to try to get a better deal with MRM.