will take place, writes David Fox . And it could lead to a tussle between Bermuda and Massachusetts A jurisdictional battle could be brewing between Bermuda and the state of Massachusetts over where Electric Mutual Liability Insurance Co. (EMLICO) will eventually be liquidated.

On Wednesday, the Massachusetts commissioner of insurance, Linda Ruthardt, petitioned the state's Supreme Judicial Court (SJC) for the right to take over the ailing insurer.

She is seeking appointment as temporary receiver, so as to take control of the company. She is also seeking "an injunction restraining EMLICO from further proceeding with its business except at her direction, and, an injunction barring actions that may interfere with this receivership proceeding.'' As temporary receiver, she would propose to report to the SJC within 60 days of her appointment, with recommendations as to whether the company should be rehabilitated or liquidated.

She would seek control over the company, whichever decision was made. But in briefs filed with the SJC by the office of her attorney general, she outlines how the Bermuda Supreme Court already determined the company to be insolvent on July 26, 1996.

Ms Ruthardt is seeking court approval to use EMLICO funds to engage legal counsel, wherever necessary in the exercise of her duties under the court's order, in whatever jurisdiction necessary.

Ms Ruthardt is seeking a receivership of a company that she purportedly allowed to move to Bermuda in 1995 -- a company which soon after claimed to be insolvent in a petition before the Bermuda Supreme Court.

This month, however, the SJC said Ms Ruthardt had no authority to send the company here, and ruled that EMLICO effectively never left the state of Massachusetts.

It was at the express intent of EMLICO and its founder, General Electric Co.

(GE), that the insurer was purportedly moved to Bermuda. GE is the chief policyholder of the insurer, and under the Bermuda liquidation, the chief creditor.

But after the company petitioned the Supreme Court to be wound up four months after supposedly arriving here, reinsurers have claimed that GE and EMLICO planned the liquidation all along.

Reinsurers said GE could control the liquidation under Bermuda's insolvency laws better than it could in the US. And reinsurers claim they would face accelerated and inflated claims if the liquidation is continued here. GE and EMLICO have denied any ulterior motives.

But hundreds of millions, potentially billions, of dollars are at stake concerning insurance policies where claims are being made for escalating pollution liabilities of GE.

The insolvent company is at present being administered here by joint liquidators David E.W. Lines and Peter C.B. Mitchell of Coopers & Lybrand Bermuda and Christopher Hughes of Coopers & Lybrand London.

Through a spokesman, they yesterday had no comment on the commissioner's petition. But it was clear on Monday, from a prepared statement, that the liquidators were not ready to give the company up.

After the SJC said the company effectively remained a Massachusetts insurer, had never left the state, and was never lawfully transferred, the court added a further note about the consequences to the company's legal position in Bermuda.

The Justices left that matter in the hands of Bermuda authorities by saying: "EMLICO's status as a Bermuda corporation is, of course, a matter of Bermuda law and not before us in any event. We simply hold that EMLICO remains a Massachusetts insurer.'' After absorbing that ruling, the joint liquidators surprisingly issued a statement which included: "The Court's view is that its decision will not affect EMLICO's continued status as a corporate citizen of Bermuda. We will continue to carry out our responsibilities under the laws of Bermuda.'' And, as Bermuda authorities resolved to study the ruling and the entire issue comprehensively, a GE spokesman, Larry Rasky, indicated to Boston newspapers the view that the Bermuda liquidation will not be disturbed.

"We don't think Massachusetts has jurisdiction here,'' the Boston Herald quoted him as saying. "EMLICO has been domiciled in Bermuda for over two years.

"GE is going to continue to press its claims in Bermuda, where we've already settled a number of claims that we've had with the likes of Allstate and General Reinsurance.''