the controversial move of the insolvent insurer, Electric Mutual Liability Insurance Co. (EMLICO) from Beverly, Massachusetts to Bermuda in 1995.

The Court of Appeals heard yesterday that proceedings, which began on Monday and continue today, will likely spill over into next week.

An EMLICO reinsurer, Kemper Re, is appealing an earlier decision taken by Puisne Judge Norma Wade in the Supreme Court, which set aside the reinsurer's permission to seek judicial review of a regulatory decision to allow EMLICO in Bermuda.

That permission, or "leave'', had been provided previously by Puisne Judge Richard Ground. The reinsurer is arguing that the Court of Appeals has the power, and should have the resolve, to reverse that decision.

Kemper Re has alleged that EMLICO deliberately misled regulators both here and in Massachusetts about the state of its solvency, obtained permission to move here, and four months later declared insolvency.

EMLICO hearing EMLICO and its sole creditor, General Electric Co. (GE), have denied any prior knowledge of its insolvency before moving here.

Kemper Re, and other reinsurers, have spent millions of dollars seeking court permission in Bermuda and in the US for regulators in both jurisdictions to re-examine the redomestication.

They want EMLICO back in the US, where they believe reinsurance settlements would be less favourable to GE and EMLICO. The reinsurers claim there was an element of fraud in the case, which EMLICO and GE deny.

COURTS CTS