As a member of the board of directors of Bermuda Fire & Marine Insurance Co.

Ltd. at the time of the company's 1991 reorganisation, Sen. Jeannette Cannonier was satisfied that the company was not going to be made insolvent to the prejudice of creditors, a court heard yesterday.

"It came as a real shock in 1993 when I became aware of the collapse of BFMIC (Bermuda Fire),'' Sen. Cannonier said in her preliminary witness statement.

"Even after what has happened, I believe that given the information presented, together with the professional input, that the board was right to do what they did in 1991 and I would probably go along with the same thing today.'' Sen. Cannonier was testifying yesterday in Supreme Court as the first witness called by defendants, BF&M Ltd., in the civil trial. She sat on Bermuda Fire's board from 1978 to 1991, when she resigned to become a director of BF&M Ltd.

Ms Cannonier remains a director of BF&M Ltd.

After she affirmed her witness statement in court she was then cross examined by the other defendants.

Bermuda Fire's liquidator Ernst & Young is suing BF&M, five former directors on the company's finance committee, Cooper & Lines, and Conyers Dill & Pearman for damages and the return of BF&M shares dividended out of the company in 1991.

The liquidator claims that the larger board was in effect a rubber stamp body duped by powerful members of the finance committee into approving the creation of BF&M to hold the company's profitable domestic business.

Ms Cannonier countered she made independent decisions while on the board and queried management, auditors Cooper & Lines and legal advisor Conyers Dill & Pearman to assure herself the reorganisation was proper.

"I certainly was not pushed around,'' she said. "Any decision I made was of my choice.'' She attended the key meetings on June 27 and July 9 at which proposals for Bermuda Fire's reorganisation were first presented and then approved by the board.

She did not attend other meetings on September 6 and December 12. As a board member she was aware of her responsibilities to Bermuda Fire's shareholders and creditors.

"I understood the proposals to be made with a view to achieving a better structure for the company for the future,'' she stated. "I remember when we were first told about the reorganisation, that it popped up in my mind that we would have to be sure that we were doing the right thing and acting in a way which was completely above board. In the course of the discussions, which I think from recollection were prolonged, all the questions which I had in my mind were satisfactorily answered.'' The board heard the full details of the reorganisation at the July 9 meeting at which representatives from Conyers Dill & Pearman and Cooper & Lines were present.

"I have a strong recollection backed up by re-reading the minutes that the board's genuine concern was to ensure that the reorganisation was in everyone's best interests,'' she stated.

"After the presentation of the plans and knowing that they had, at least in part, been put together by lawyers and accountants and entirely approved by them, I remember being satisfied that the reorganisation was the best outcome for BFMIC's future and in everybody's interests.'' She testified under cross examination she felt that chairman Charles Collis, who died last year, ran board meetings in a "business-like'' manner. Mr.

Collis, Donald Lines, William Cox, Greg Haycock and Michael Collier are being sued as members of the company's finance committee.

"The meetings were run very professionally,'' she said. "We would have an agenda before us and time would be allowed for discussion. Everyone was given the opportunity to express themselves.'' Mr. Collis encouraged discussion of issues affecting the company and she considered him an honourable man as were other members of the finance committee, she affirmed.

She denied the larger board was ever "railroaded'' into making decisions by the finance committee. Some directors asked for confirmation that provision had been made for creditors in the runoff operation left in Bermuda Fire after the 1991 reorganisation and received "satisfactory'' answers, she said.

Senator Cannonier retired from the Bank of N.T. Butterfield and Son Ltd. in 1995 as deputy manager of corporate banking. She chaired the Bermuda Public Service Commission and the Bermuda Government Superannuation Board for 20 years until resigning in 1997.

Sen. Jeannette Cannonier: "...it popped up in my mind that we would have to be sure that we were doing the right thing...''