Troubled financial and insurance services firm Mutual Risk Management will foot the bill for a review of its operation launched by the Bermuda Monetary Authority.

A filing with the US Securities and Exchange Commission (SEC) earlier this month advised of the company being put under BMA watch.

The review has been launched after Mutual Risk (MRM) posted close to $100 million in losses for 2001.

In addition the company has seen its US subsidiaries Legion and Villanova Insurance put under state regulated run-off, and both AM Best and Standard & Poors have downgraded the rating of several MRM companies.

The firm has also seen its market value take a drastic dive, and after extended trading below $1 it saw its shares taken off the New York Stock Exchange. It is now trading on the over-the-counter bulletin board for pennies.

As part of its review of the company, the BMA have appointed an independent agent - identified as Richard Lightowler of KPMG.

And a letter to MRM CEO Robert Mulderig on March 12, from Bermuda Monetary Authority chair Cheryl-Ann Lister, and on behalf of the Supervisor of Insurance, advised the company of the particulars of the review.

The letter identified the Review Team's MRM contact as CFO Angus Ayliffe, who took over the company's financial reins in recent weeks after the resignation of Andrew Cook and then James Kelly, who held the post of interim CFO for less than three months.

Under the terms of the review, MRM has been required to pay an up front retainer fee of $150,000.

Invoices for work performed will be submitted to MRM and if not paid within seven days KPMG is entitled to draw down the amount of the outstanding balance from the retainer fee.

In addition MRM has been required to set aside office space at MRM for the Review Team and to provide "full and free access" to Mr. Ayliffe and to all company information. The purpose of the review is not however intended to interfere with MRM's running of its operation.

Mrs. Lister's letter states: "MRM will continue to operate its business in the normal course, including but not limited to any steps it is advised or believes it should take with respect to the reorganisation or sale of any or all parts of its business or assets."