Troubled Bermuda-based insurer Mutual Risk Management may now be considering liquidation.

The company's future has been under threat since it reported in February close to $100 million in fourth quarter losses. And its woes were magnified yesterday with reports of further losses, additional rating downgrades and its listing on the New York Stock Exchange being put under review.

The company, in an SEC filing, yesterday revealed that its 2001 loss had widened by $13 million to a net loss of $99.2 million. The company, in February, reported a fourth quarter net loss of $99.7 million and net loss for the year of $86.1 million.

The company's losses have put it in violation of certain debenture agreements, and the the SEC filing indicates the company is also in default on its bank credit facility and its letter of credit facility.

In addition the filing reports the company is working to satisfy creditors, including XL Capital, which may lead to the sale of additional assets - the company sold off its Bermuda-based fund administrator Hemisphere Management last month - and could result in MRM's liquidation.

“It is unlikely that any proceeds of the liquidation would remain after the claims of the general creditors were satisfied,” the filing said.

These latest developments follow Monday's announcement that the companies Pennsylvania-based US insurers - Legion and Villanova - had been taken over by state regulators and put in to run off.

MRM's CEO Robert Mulderig was contacted by The Royal Gazette but he declined to speak with the paper. Mr. Mulderig's office said: “He is sorry but he cannot give an interview but when the situation changes and he can give you an interview he will be happy to give you one.” The Royal Gazette asked if there was a reason that Mr. Mulderig would not answer questions but no reason was given.

Legion and Villanova received rating downgrades from AM Best earlier in the week, and yesterday Standard & Poor's (S&P) downgraded its ratings for the companies to R as a result of the news that the Pennsylvania-based companies had been placed under “regulatory control”. S&P credit analyst Karole Dill Barkley indicated that Pennsylvania regulators were exploring whether the companies could be “rehabilitated” or should be put in to liquidation. There was also word that there could be staff cuts for the two companies as no more business was being written.

A third subsidiary, Illinois-based Legion Indemnity Co. also saw its rating fall to triple C as the S&P anticipated the company could also be taken over by state regulators.

MRM also remains on the S&P's CreditWatch negative list. And AM Best has put MRM's Bermuda-based IPC Group on negative watch.

Meanwhile, the New York Stock Exchange (NYSE) said it has put the company's listing under review. The NYSE did not open trading in MRM common stock yesterday citing its review of the company's filing of a partial Securities and Exchange Commission (SEC) Form 10-K submission for the fiscal year ended December 31, 2001 and a related Form 12b-25 extension request delaying the filing of the Company's finalised Form 10-K.

Robin Verhose, in the NYSE Press office, told The Royal Gazette that MRM stock would resume trading but it did not trade yesterday. It closed on Monday at 60 cents. The company, which was trading as high as $23 18 months ago, has a 52-week low of 43 cents while its high was $12.30.

The NYSE action also followed the announcement that MRM is assessing the financial impact of its US subsidiaries being put in to “rehabilitation”. The Exchange reported that continued listing standards require maintenance of a minimum share price of $1 over a 30 trading day period. The NYSE said it had recently notified MRM of its non-compliance with this standard and that demonstration of compliance within six months from the date of the NYSE's notification is mandatory.