their objections to a deal hashed out among Massachusetts insurance regulators, GE and Bermuda-registered EMLICO to settle the controversial case, and allow the liquidation to continue in Bermuda with a Massachusetts receivership.

EMLICO (Electric Mutual Liability Insurance Co.) moved to Bermuda from Massachusetts in the summer of 1995 as a solvent company. But it filed for bankruptcy less than four months later, blaming unforeseen yet fast growing environmental claims.

Founded by main policyholder, GE (General Electric Co.) in 1927, EMLICO has faced criticism from some reinsurers that the move to Bermuda was designed to stick reinsurers with a larger part of the bill for pollution claims against GE. EMLICO and GE deny it. They claim the reinsurers are just trying to avoid paying what they owe, by making unsubstantiated claims of fraud against EMLICO and GE.

And a spokesman for the joint liquidators said yesterday from New York that more of the reinsurers are backing away from their objections to the proposed settlement agreement and seeking to settle their outstanding claims with negotiated agreements.

He said, "The frequency for negotiations for settlement of claims has picked up over the last month.'' A GE spokesman said that last Friday, General Re, one of the reinsurers which opposed the receivership agreement, decided to withdraw its objections. Before that, Allstate Insurance opted out of the dispute and settled with EMLICO by paying an unconfirmed amount of $30 million.

But yesterday, the Boston Globe reported that the US attorney's office is still investigating the DOI's approval that allowed EMLICO to move to Bermuda in the first place.

Meanwhile, a Massachusetts non-profit research and advocacy group has told the Supreme Judicial Court for Suffolk County that the EMLICO settlement proposed by the Massachusetts Division of Insurance (DOI) is "contrary to the public interest of the Commonwealth (of Massachusetts).'' In court filings, the Center for Insurance Research (CIR) has urged presiding judge, Justice Greaney to reject the proposed settlement, or at least appoint an independent special master to publicly determine if the proposals are fair and reasonable to citizens of Massachusetts.

CIR alleges "strong evidence'' that EMLICO was given special treatment during the redomestication process in 1995, with the DOI quietly expediting the process in an unusually short period.

Lawyers for Coopers & Lybrand, EMLICO's Bermuda liquidators, argued that the redomestication order that transferred EMLICO "cannot be effectively reversed'' and there can be "no serious argument that the receivers' agreement should be rejected because it does not compare favourably to the completely mythical remedy of a repatriation of EMLICO to Massachusetts.'' They noted that GE as the policyholder, Massachusetts regulators and the liquidators "operating under the direction of the Bermuda court'' are prepared to enter into a receivers' agreement.

The agreement, they said, had been carefully crafted to respect the sovereignty of two separate jurisdictions.