Security Life Insurance while it was technically insolvent, it was revealed yesterday.

Assets thought to be in the region of $500,000 were moved to bank accounts in Curacao and the American Virgin Islands in 1989, two years after the company was deemed broke.

Bermuda authorities have asked for the money back but the Trinidad-based company's court-appointed administrator Mr. Brian Fortier said they acted too late.

"I'm unable to get my hands on them,'' he said. "I can't track them down.'' The transfers may never have happened at all if Bermuda's authorities had been on top of the situation in the first place, he said.

Bermuda's insurance industry was yesterday hiding behind a wall of silence with no-one prepared to comment on the record about the collapse of a company which had 2,000 Bermuda policyholders.

Finance Minister the Hon. David Saul said Bermuda's Non-resident Insurance Undertakings and local insurance companies were asked to come up with a rescue package.

"We've been trying for a long time to have the Bermuda operation taken over and treated as a separate entity but without any success,'' he said.

Neither Mr. Arliss Francis, who is the spokesman for NRIUs in Bermuda, nor Mr.

Brian Hall, chairman of the Insurance Advisory Committee, would say anything.

Mr. Hall said he was bound by The Official Secrets Act.

But one leading insurance executive, who did not want to be named, said: "United Security was an overseas company and it's up to the NRIUs to bail them out. It is not the responsibility of local insurers.'' It became clear yesterday that British American Insurance, which has offices in 29 different countries, including Trinidad and Bermuda, was approached on several occasions to take over either the whole company or the Bermuda operation.

"But the only part of the business they were interested in was the health side,'' said a source. "The talks never came to anything.'' It was only after every effort to find a buyer was exhausted that Mr.

Butterfield went ahead and got permission from Bermuda's Supreme Court to wind up the local United Security branch, said Dr. Saul.

However, this was the worst action to take for a life company because policyholders would lose their benefits, said Mr. Fortier.

Shadow Minister of Finance Mr. Eugene Cox MP last night called for an inquiry into the alleged mishandling of the affair by the Ministry of Finance and the Registrar of Companies, Mr. Malcolm Butterfield.

"It's very disturbing to me to find our authorities so inept and so ignorant of the insurance business which we're claiming we have expertise in,'' he said. "The whole thing calls for an in-depth investigation to see if Bermuda's insurance needs are being properly served.'' Mr. Butterfield has refused to explain why his department allowed United Security, which was managed locally by Mr. James DeCouto, to issue policies in Bermuda for five years while it was insolvent.

Bermuda's Supreme Court has appointed Mr. R. Gil Tucker, of Ernst and Young, as provisional liquidator. Mr. Tucker, adding to the cloud of mystery, failed to return several messages left at his home and office over the last two days.