stock market crash contributed to the demise of the planned Resource Holdings Ltd. group.

Investors have pulled out of a proposed $300 million new Bermuda reinsurer and the principals are now studying the investment market to see if there is a chance for the plan to proceed.

The last investors backed out in mid-November, just days before a revised application seeking the incorporation of the new reinsurance vehicle was set to go to the admissions committee of Government's Insurance Advisory Committee.

A central figure behind the plan, Robin Spencer-Arscott, conceded yesterday: "I am disappointed. An unfortunate series of circumstances have occurred, which at the end of the day, needed not to have happened at all.'' He would have been president and CEO of the new reinsurer. Speaking from Hamilton offices established in anticipation of the company formation, he said the group would have to assess its options and continue with talks with other potential investors. But he had no guarantees that the project will now go ahead.

His comments followed a prepared statement which read: "An application placed with the Registrar of Companies in Bermuda to incorporate Resource Holdings Limited, Resource Underwriters Limited and Resource Managers Limited has been withdrawn.

"After the loss of two major investors following the fall in the stock market in October, the management and the remaining investors decided to withdraw the application to form the above mentioned companies.

"It is not envisaged that any further application will be made in the foreseeable future for the above mentioned companies. However, further discussions with other investors are taking place.'' In an interview, Mr. Spencer-Arscott, denied speculative reports in two related Miami-based publications that negatively linked $30 million of the investment money with an American businessman, Martin Hoffman, through former Bermuda market insurance executive, David Thirkill.

Mr. Thirkill had originally been proposed as the chairman of Resource, although none of his money was to be involved.

Written by former Bermuda journalist David Marchant, the publications Offshore Alert and Inside Bermuda also speculated that Bermuda insurance regulators turned down the application to incorporate the new reinsurer. Mr.

Spencer-Arscott said that speculation was also off-base.

He said: "We withdrew the initial application to make necessary changes to the plan and to include some additional information. And we were about to resubmit the application, when our investors pulled out.'' He said that there was some $30 million in capital that was being brought to the table through an American insurance investor from Buffalo, Steven Blumhagen, a business entrepreneur. But he said it had nothing to do with Messrs. Hoffman and Thirkill.

One of the changes would have involved the scaling back of the proposal from a $300-million capitalised company to a $30-million reinsurer.

Mr. Spencer-Arscott added: "We felt we could still re-submit the plan with $30 million and get the company established as a Class Three reinsurer. There were companies that had agreed to provide some US business and we were still confident of eventually getting more supporting capital, once the company was up and running.'' The new plan excluded the departed investors, and Mr. Thirkill's name was withdrawn as chairman.

But the remaining investors also became concerned about their unused capital that by then had been waiting months for the new reinsurer. The last investors decided on new opportunities for that capital and pulled out.

Mr. Spencer-Arscott said: "That $30 million was not coming from David Thirkill or Martin Hoffman, no matter what David Marchant says. It was coming from Steven Blumhagen.

"So much of his article is supposition. It talks about Mr. Thirkill and the demise of Focus Insurance. We have yet to see any facts produced that links David Thirkill directly to the reasons for the demise of Focus or Forum. From what I understand, he has not been convicted of any wrongdoing in that matter.

"In any event, Mr. Thirkill was not bringing $30 million to the table from Martin Hoffman, as this articles suggests. That is absolutely not true.'' A key player for Resource was to be Richard Jessel, its chief underwriting officer. Mr. Jessel has had 23 years experience with Eagle Star Insurance in the UK and in the Lloyd's of London market.

He has done consulting work for Equitas, the reinsurance facility set up to administer the Lloyd's run-off of market debts up to 1992 for liabilities that included asbestos and other long-tail liabilities.

He consulted with Bermuda-based insurer, ACE Ltd., providing the reinsurance due diligence prior to ACE's purchase of catastrophe reinsurer Tempest Re.

Resource Underwriters was proposing to write a diversified book of business that would be able to support areas of business that may not have faced the significant declines in pricing experienced by others.

Mr. Jessel said: "We were looking at some finite business, obviously not competing with Centre Re where they write large contracts. But there is plenty of other business in the finite market which I've had experience with in the past, some of which I did with ACE in a consultancy relating to their financial lines business.

"The single largest line for us may have been `cat' business, perhaps as much as 30 percent. The Bermuda cat reinsurers have been lucky with four years of little or no losses. You'd be very lucky to get another four years of no losses.

"So we were going to limit the amount of our capital that would be exposed to a significant loss. But we saw a lot of other business that could be profitable, that would have had low loss ratios.'' Robin Spencer-Arscott