Robert Mulderig knows a thing or two about reinsurance disputes after the company he once ran ? Mutual Risk Management ? was effectively put out of business because reinsurers stopped paying claims from its US insurance units; even the "day-in and day-out claims" that were not the subject of a dispute.

The company, which had long been the leading light of the Bermuda insurance sector, was hit with financial woes in 2001 after its American subsidiaries ? Legion Insurance Company and Villanova Insurance Company ? were put underwater after difficulties in getting reinsurance claims settled.

Mr. Mulderig, taking part in a panel discussion at the 18th annual Hawksmere reinsurance congress, said he was in a position to talk about reinsurance disputes could lead to a company's demise.

"I am speaking, having been in the position of trying to defend (the company) to shareholders and analysts, but you cannot defend whether or not, when you actually present the bill, they (reinsurers) will pay."

The veteran insurer said that hindsight has also convinced him that going through the courts is a better way to settle a dispute than the commonly used arbitration route. Disputes between insurers and reinsurers have escalated in recent years.

"Reinsurance arbitration; it is a terrible process. I would rather go before a judge," he said.

Although the arbitration process is different between jurisdictions ? with the UK also seeing increasing disputes ? Mr. Mulderig said neither was ideal.

He added that trying to get MRM's disputes ironed out was a long and frustrating process with it not being uncommon to have a three-year wait period before experienced arbitrators could take up your cause.

In the US each party is able to appoint their own arbitrator with the third being independently appointed while the UK system is to appoint three independent professionals to the arbitration. Even once the arbitration process was underway, the process was lengthened because there are no binding rules of evidence as you would have in a court of law.

Mr. Mulderig said this could lead arbitrators, who are being paid by the hour, to include all evidence even when it has little bearing on the dispute.