Two of the defendants named in a lawsuit filed by Allianz Life Insurance Co.

in the US have dismissed the case as "without merit''.

The Royal Gazette reported yesterday that Bermuda-based underwriter Centaur Underwriting Management Limited was accused of fraud and misrepresentation in the law suit but that company has issued no public statement yet.

The suit -- filed in the US District Court of Minnesota -- relates to exposures under the Unicover workers' compensation reinsurance pool.

Allianz -- the Minnesota-based US arm of the German insurance giant -- wants to have several reinsurance contracts rescinded on the basis of alleged fraud.

The company alleges that insurers American Phoenix Life and Reassurance Co., Phoenix Home Life Mutual Insurance Co. and Sun Life Assurance Co. of Canada unlawfully induced the company through false statement and material non-disclosures to enter into the contracts.

It also accuses reinsurance broker Aon Re Inc. of Chicago and Centaur of fraud and misrepresentation.

Aon vice president financial relations John Roskopf yesterday told Insurance Day trade paper the suit was "essentially groundless''. "There are a lot of allegations and innuendoes but at this point that is all they are,'' he said.

"We don't think there is any benefit to discussing the allegations in the suit publicly.

"We are very confident in our position that we conducted ourselves properly and we think that ultimately this matter is going to be resolved in our favour.

"We feel very confident this is going to have no financial impact on us whatsoever.

A spokesman for Phoenix Home life Mutual Insurance Co. was also quoted as saying the case was "without merit''.

Documents which Allianz filed with the court say: "The modest reinsurance exposure that Allianz was led to believe it had accepted bears no resemblance whatsoever to the staggering exposure under the risks that defendants now seek improperly and unlawfully to foist on Allianz.

"Allianz's potential liability under these agreements could increase by tens, if not hundreds, of millions of dollars over what Allianz was led to believe its potential liability was under the agreements.'' Earlier this year Centaur -- the managing general underwriter on behalf of Sun Life of Canada and phoenix Home Life -- was named as a defendant in a separate law suit filed in the US by reinsurer Odyssey Re.