As litigation over Bermuda-domiciled Electric Mutual Liability Insurance Company (EMLICO) continued in the Bermuda Supreme Court, Massachusetts Insurance Commissioner, Linda Ruthardt, decided this week against a further investigation of the insurer.

In a ruling handed down on Tuesday, the commissioner wrote that she would decline as a matter of discretion, to re-open the redomestication proceedings "at this time''.

But she announced a continuation of the examination of Electric Insurance Company (EIC), the firm that assumed EMLICO's "good business'' when EMLICO transferred to Bermuda.

The commissioner said that in light of information presented during an informal hearing, she would be inclined to re-open the year-old EMLICO redomestication proceedings immediately based on her "inherent authority to re-open administrative proceedings based on suspected fraud, thereby creating a record for information confirming or denying these allegations.'' But she said EMLICO is now a registered Bermuda insurer and is subject to a winding up order in the Bermuda Supreme Court. The Bermuda court is hearing allegations of fraud and misrepresentation, levelled at the company by one of their reinsurers, Kemper Re.

It is alleged that EMLICO misrepresented their state of solvency to regulators in both jurisdictions while redomesticating. The Supreme Court is currently hearing the allegations.

Ms Ruthardt indicated though, that on May 23, her office advised the Registrar of Companies in Bermuda that consideration was being given to re-opening the redomestication.

Ms Ruthardt wrote: "Noting that such a re-opening could impact Bermuda proceedings, the division encouraged the Registrar to request that the Bermuda court delay proceedings, pending the division's review of the issues.

"A copy of the letter was forwarded to the Bermuda Solicitor General on June 18, 1996, and on June 20, 1996, the Solicitor General responded that without a request through diplomatic channels, the Government of Bermuda cannot act `on behalf of'' a branch of the United States government.'' She continued: "While the division did not request action on its behalf, but rather suggested that action in Massachusetts should logically precede review in Bermuda, the response indicates that the Bermuda authorities wish to proceed.'' Ms Ruthardt said that under such circumstances, she need not resolve now the question of her authority to proceed, regardless of EMLICO's Bermuda domicile and the jurisdiction of the Bermuda court.

She said: "Being respectful of the authority of other regulators and noting the imminence of the Bermuda hearing, I decline as a matter of discretion, to re-open the redomestication proceeding at this time.'' COURT CTS