According to a report filed with the US Securities and Exchange Commission, troubled Bermuda insurer Mutual Risk Management (MRM) has undergone a series of sea changes at board level. Robert Mulderig, the public face of MRM for many years, has been axed.

In, to the board of directors on October 18, came Bermudian David Ezekiel, the president and managing director of International Advisory Services Ltd., a subsidiary of MRM, and also a director of MRM Services Ltd.

Out, from the board of the directors on October 19, went Roger E. Dailey, Arthur E. Engel, Jerry S. Rosenbloom, Norman L. Rosenthal, Joseph D. Sargent and Richard G. Turner.

The reason? "Due to the company's inability to secure an extension of its current directors' and officers' insurance policy or to obtain acceptable replacement coverage," chief financial officer Angus Ayliffe reported.

Directors' and officers' insurance protects company officials from being sued personally for the economic consequences of acts they take in their company capacities. Following the rash of corporate scandals that have occurred or become public this year, the D&O sector is experiencing difficulties that have seen premiums raised significantly and several issuers stop writing coverage altogether.

The changes at MRM continued. In to the board of directors on October 31, came Paul Scope, chairman and chief executive officer of the Park Group Limited, MRM's insurance brokerage subsidiary. Out, from the board of directors, and the posts of chairman and chief executive officer, on November 1, went Bermudian Robert Mulderig. In, to the offices of chairman and chief executive officer of the company, on November 1, came Mr. Ezekiel.

The net effect of all these changes is that the MRM board now comprises just two men: Mr. Ezekiel and Mr. Scope. Neither man was on the board prior to October 18. Although neither Mr. Ezekiel nor Mr. Mulderig could be reached for comment by press time last night, some things are clear from the order in which the changes took place: the board resignations en masse mean that all the actions of the previous board members would have been covered by the D&O policy that could not be renewed. Unable to renew the coverage, the directors had a choice: to continue without coverage, or to resign. They resigned.

The wording of the company's 8-K report to the SEC does not make plain whether such coverage could not be arranged, or whether it could not be arranged at a price that the company deemed acceptable.

MRM had been experiencing financial problems since earlier this year. In March, the company sold its fund administration business, Hemisphere Management Ltd., to repay indebtedness. That month, it also announced that it had retained Greenhill & Co., LLC, an independent global merchant banking firm, to assist in developing a restructuring of its balance sheet. Later in March, MRM announced that two of its US insurance companies, Legion Insurance Company and Villanova Insurance Company ("the Legion Companies"), had been placed into voluntary rehabilitation as a result of an order issued by the Commonwealth Court of Pennsylvania.

The order of rehabilitation, which was effective on April 1, 2002, was filed with the consent of the boards of directors of the Legion Companies.

Beginning on April 1, 2002, the Legion Companies operated in run-off under the control of the Insurance Commissioner of the Commonwealth of Pennsylvania as Rehabilitator. No new policies were to be bound and the Legion Companies were to begin a process to non-renew their in-force policies in accordance with applicable state regulations.

In May, MRM restructured its debt. On September 13, Pennsylvania insurance regulators sought to place Legion Insurance Company in liquidation. During the year, MRM's stock has plummeted; it has delisted from the New York Stock Exchange, suffered numerous rating downgrades and seen the launch of several class action lawsuits by disgruntled investors.

The company's stock closed last night at four cents on the Bermuda Stock Exchange, in contrast to its 52-week high in October of $23.56. Mutual Risk Management Ltd. provides risk management services to clients in the United States, Canada and Europe seeking alternatives to traditional commercial insurance for certain of their risk exposures, as well as financial services to individuals and other companies.