Kemper Reinsurance Co. has filed several briefs, including a motion to intervene that states that it is "the money of EMLICO's reinsurers, including Kemper Re, that is directly at stake in this proceeding''.

In a separate motion, the reinsurer expressed concern about the future of certain evidence and effectively won a temporary order from the court for the preservation of evidence.

Kemper Re's brief states that the settlement agreement is supplemented by four "side letters'' that were not included with the commissioner's petition to the court.

One of them holds that once approved and the commissioner, as US receiver, takes control of EMLICO's US assets, the joint liquidators will be entitled to direct the disposition of all EMLICO documents.

EMLICO's controversial redomestication is currently challenged in numerous court proceedings in Massachusetts and Bermuda, is a central point in arbitration proceedings that are being demanded by reinsurers, and, is the subject of a federal grand jury investigation.

It is also the subject of legislative hearings and investigations in the Massachusetts legislature.

The brief states that if the liquidators are allowed to "direct the disposition'' of all EMLICO documents, "they will have and can only be expected to exercise the power to remove essential proof of EMLICO's fraudulent redomestication from the jurisdiction of the courts of the Commonwealth and the United States, and the liquidators will then have, and can only be expected to exploit, the power to destroy critical evidence of EMLICO's wrongdoing.'' They said such evidence they might control could include other documents held by third parties, such as GE's and EMLICO's advisors for the redomestication.

The court ruled in favour of preserving evidence until it hands down a decision.

Kemper Re also argued that Bermuda does not qualify as a "state'' as understood under the laws that allow a Massachusetts insurer "to transfer its domicile to any other state''. They say the commissioner's order allowing the redomestication -- and the proposed settlement agreement that would make it binding -- can only be valid if Bermuda is a "state'' within the law's meaning.

Kemper Re also offered arguments to dismiss the commissioner's petition because, if validly redomesticated to Bermuda July 1, 1995 (which Kemper Re denies), EMLICO is no longer a "domestic company'' but an alien company and the court therefore has no jurisdiction to order its liquidation.

And further the commissioner's petition does not seek to create a genuine receivership, because of her lack of control over the liquidation.

She is statutorily required, it is argued, to perform many basic liquidation duties that she will not be performing, but in fact will be allowing liquidators in Bermuda to do.

Kemper Re's objections to the proposed US receivership of EMLICO notes that it would be an unprecedented receivership.

But their lawyers also said that the commissioner's proposal would allow the widest possible release from any liability for all claims relating to the redomestication that might be made against GE and EMLICO, their officers, directors and advisors, including events that took place after the redomestication.

Her examination of Electric Insurance Co. would end, the liquidators would have control over any evidence that may be damaging to the company and she would withdraw her brief from the court in appeal, concerning whether Kemper Re can produce to a federal grand jury leaked documents at the heart of their claim of fraud against GE and EMLICO.

The reinsurer said the redomestication was suspicious and the commissioner herself had earlier found that there were sufficient grounds to warrant an inquiry in EMLICO's deliberate misrepresentations.

Kemper Re argued that the court should defer any action on the petition until the legality of the redomestication is resolved.

The reinsurer disagrees with EMLICO that Bermuda law precludes EMLICO's return to Massachusetts. They say that if Bermuda courts are shown that necessary approvals for the move were obtained fraudulently, they would determine the Bermuda incorporation as in violation of Bermuda law.

Kemper Re also objects to the process by which a special master would be appointed, calling it "not fair and reasonable'' and "inherently unjust''.

A key complaint against the US receivership and the settlement agreement is that the commissioner made the deal after secret discussions were held with EMLICO liquidators and GE, the company that had always controlled and owned EMLICO and which had chosen the liquidators.

Reinsurers complain that unlike in the US, GE will be the only party privy to the liquidation in Bermuda, because GE is the only creditor.

They say the special master review process will deny them the right to review notice of, or to investigate, claims and denies the right to interpose claim defences against GE on EMLICO's behalf -- rights they would have had in a Massachusetts liquidation.

And defects in the special master process could not be cured in arbitration.

Kemper Re said that the harm caused by the violation of reinsurers' insolvency clause rights would be irreparable.