Sonesta Beach Hotel was experiencing increased insurance premiums for medical coverage in the early 1990s and decided to change to another insurance agent, an executive told the Supreme Court yesterday.

Bonifatius Van Reel, vice president and treasurer of Sonesta Beach International Hotels Inc., testified on day three of a civil trial involving former Sonesta Beach executive David Boyd and Colonial Insurance.

Mr. Boyd left his job due to chronic pain and he has brought an action against the insurance company which has denied him disability compensation.

The onetime president and managing director of the Sonesta Beach Hotel in Southampton has already testified.

Mr. Boyd, now living in South Carolina, filed the suit against the insurance company following his resignation from the hotel's top post nearly two years ago.

At issue is whether a June 5, 1996 amendment clause to the hotel's insurance policy does or does not cover pre-existing medical conditions.

Yesterday Mr. Van Reel explained his job as vice president and treasurer for Sonesta required him to supervise the (Bermuda) Sonesta Beach Hotel's financial department.

Part of that responsibility included the benefits package that the employees were enrolled in.

Mr. Van Reel said Crown Life had the responsibility for the hotel's benefit package for a long time and whenever the arrangement came up for renewal the entire plan was reviewed.

Because Crown Life's rates for medical coverage were rising rapidly, he encouraged the Bermuda hotel's management to look for cheaper alternatives to Crown Life.

Mr. Van Reel said it was Sonesta International's policy that all employees be covered for medical, life and long term disability without exclusions.

Therefore Sonesta International began negotiating with a representative of Colonial Insurance in 1994 but the process stopped once that representative departed around June, 1995.

Under cross examination from lawyer Saul Froomkin, Mr. Van Reel admitted that he did not conduct the negotiations between representatives of Sonesta International and Colonial Life.

And he said that after February, 1996 he was no longer involved.

Meanwhile, Mr. Boyd who was part of the negotiating team with Colonial Insurance, has said that he insisted to Colonial that any insurance policy would have to cover everyone regardless of their medical history.

And he said he was assured that Colonial could write a policy without regard for preexisting medical conditions.

The case continues today before Puisne Judge Vincent Meerabux.