Bermuda-based insurer mulls bankruptcy – The Royal Gazette | Bermuda News, Business, Sports, Events, & Community

Log In

Reset Password

Bermuda-based insurer mulls bankruptcy

Bermuda-based insurer Majestic Capital Ltd and its subsidiaries intends to file for bankruptcy in Bermuda and the US after its proposed merger with Bayside Capital Partners fell through.

Bayside cited a material deterioration in Majestic Capital's capital surplus, an inability to secure regulatory approval for the merger, and a failure to satisfy the closing condition with respect to termination of Majestic Capital's lease for office space in Poughkeepsie, New York on terms acceptable to Bayside.

“The failure to complete the merger with Bayside is expected to result in a downgrade of Majestic Insurance Company's 'B++' financial strength rating and a conservation proceeding by the California Department of Insurance,” Majestic's stated today. “As a result, Majestic Capital and its subsidiaries expect to seek protection under applicable United States and Bermuda bankruptcy and other similar laws for the protection of creditors.”

Majestic, formerly known as CRM Holdings, is a provider of workers' compensation insurance in the US through its third-party administration of self-insured trusts.

In 2008, CRM voluntarily gave up its trust licence in the state of New York, where there were major concerns for regulators over trusts which had become insolvent and were unable to meet their obligations to injured workers.

Majestic Insurance Company, a wholly-owned US insurance subsidiary of the Bermuda firm, has made a non-binding agreement to transfer its current insurance business and loss reserves to AmTrust Financial Services, Inc.

You must be Registered or to post comment or to vote.

Published March 21, 2011 at 12:00 pm (Updated March 21, 2011 at 12:49 pm)

Bermuda-based insurer mulls bankruptcy

What you
Need to
1. For a smooth experience with our commenting system we recommend that you use Internet Explorer 10 or higher, Firefox or Chrome Browsers. Additionally please clear both your browser's cache and cookies - How do I clear my cache and cookies?
2. Please respect the use of this community forum and its users.
3. Any poster that insults, threatens or verbally abuses another member, uses defamatory language, or deliberately disrupts discussions will be banned.
4. Users who violate the Terms of Service or any commenting rules will be banned.
5. Please stay on topic. "Trolling" to incite emotional responses and disrupt conversations will be deleted.
6. To understand further what is and isn't allowed and the actions we may take, please read our Terms of Service
7. To report breaches of the Terms of Service use the flag icon