Arthur Andersen's Bermuda-based captive - Professional Services Insurance Company Ltd. - is seeking to establish a solvent scheme of arrangement with creditors.

Although the captive's solvency was questioned earlier this year - after it initially said it could not settle a litigation against Andersen, by victims allegedly cheated out of money by a failed religious charity the Baptist Foundation, for its role as auditor - the matter was later settled for a reported $217 million, and this proposed scheme of arrangement with PSICL creditors is as a solvent entity.

The scheme meeting is set for January 3, 2003, according to a Supreme Court order dated 14 November, 2002, at the offices of the PSICL's legal representative Conyers Dill & Pearman.

Scott Hunter, former managing partner of Arthur Andersen Bermuda and president of PSICL, is to chair the scheme meeting which was said to be "for the purpose of considering...a scheme of arrangement".

Andersen Bermuda, like other Andersen offices world wide, closed its doors earlier this year following the indictment of the American Andersen firm by the US Department of Justice for its role as auditor of now failed energy giant Enron. But PSICL was not part of the Andersen Bermuda winding up.

Mr. Hunter told The Royal Gazette yesterday that not only was the captive solvent, it was in compliance with Bermuda's Insurance Act 1978 and its related regulations, which included meeting minimum capital and solvency requirements and maintaining "relevant" or liquid assets equal to at least 75 percent of its liabilities. As a class two insurer, PSICL must have minimum capital and surplus of $250,000.

Mr. Hunter added that the captive, which was set up in 1991, was a private company and their "assureds are private entities".

Mr. Hunter said he had a "consulting arrangement" with PSICL, under which he oversees its operations and when providing those services, works from the company offices at Victoria Hall. That office is also home to Marsh Management Services (Bermuda), which manages the captive.