The ongoing saga involving 777 Re, the one-time Bermudian-based reinsurer, has taken a new turn, as the Utah Insurance Department and A-Cap Group have agreed to pause their litigation and enter mediation.

This development follows a series of regulatory actions and financial challenges linked to 777 Re and its parent company, 777 Partners.

On October 8, 2024, the Bermuda Monetary Authority announced it had cancelled the insurance registration of 777 Re Ltd under provisions of the Insurance Act.

The mediation agreement, announced in a press release from A-Cap on April 29, involves the Utah Insurance Department and three A-Cap-regulated insurance companies: Sentinel Security Life Insurance Co, Haymarket Insurance Co and Jazz Reinsurance Co.

The decision to mediate comes after the Utah Insurance Department had previously ordered these insurers to cease writing new business, citing hazardous financial conditions due to their investments in 777 Partners and its affiliates.

A-Cap, a New York-based insurance and financial services holding company, came under scrutiny by regulators for its financial dealings with 777 Partners. The Financial Times reported that A-Cap's insurers invested heavily in 777 Partners' ventures, including loans to entities like Flair, the Canadian budget airline, and various sports teams. A-Cap's Utah insurers had ceded $1.7 billion in reserves to the reinsurance company, according to the regulators' rehabilitation petition.

The troubles at 777 Re also caused AM Best, in June 2024, to withdraw the financial strength rating of 777 Re, citing the company's plans to cease insurance activity and the absence of insurance liabilities. This move followed earlier downgrades due to concerns about 777 Re's balance sheet strength and its exposure to investments in 777 Partners.

David Burt, the Premier and Minister of Finance, has defended the island's life reinsurance sector amid the 777 Re crisis, emphasising the Bermuda Monetary Authority's efforts to regulate and tighten rules on connected-party investments.