Facing hundreds of millions of dollars of unpaid claims, General Electric Co.

argued the commissioner's proposed settlement agreement should be approved because she was only properly exercising her discretion with regards to the primary goal of liquidations to protect policyholders and creditors.

They said the Bermuda liquidation continues, and delays in granting the commissioner approval for the settlement proposal means it is unlikely that there will be any role left for Massachusetts to play in EMLICO's insolvency.

GE said the interest of the reinsurers in avoiding liability to EMLICO's estate is not an interest protected by insurance insolvency laws.

They said: "Any reference to reinsurers or other debtors is conspicuously absent from the statutes and case law identifying those whose interests are to be protected in insurance insolvency proceedings. Reinsurers are not even among those persons who are entitled, by statute, to notice of the existence of an insurance insolvency proceeding.

"Indeed, as a general proposition it has been the law of this commonwealth for more than a century that debtors have no interest in the administration of an estate.'' GE noted that the reinsurers' protections come from the terms of its agreements with the insolvent company.

The company argued: "Unlike policyholders and creditors, a debtor's contract rights are not affected by an insurance company's insolvency. When, and if, the estate of the insolvent company seeks to collect debts owed by the debtor, or to enforce promises unfulfilled by the debtor, the debtor then has the opportunity to assert any available defences.'' GE said the reinsurers' efforts to intervene prior to that time is nothing more than an attempt to delay the fair resolution of GE's claims.

There is no dispute that EMLICO is insolvent and the requested relief is a sound exercise of the commissioner's discretion in administering EMLICO's estate as US receiver, court briefs said.

They also state that the receivers' agreement secures important benefits for policyholders, creditors and the Commonwealth. The commissioner would have had no jurisdiction to seek receivership without the consent of EMLICO.

The company concedes that dual receivership proceedings and the special master's review will increase the delay and expense in the ultimate resolution of their claims, but they still believe that the overall benefits of comity (with regard to the liquidation through Bermuda courts) warrant the additional expense and delay.

In a footnote, GE further said: "The agreed upon resolution also ensures the continued viability of Electric Insurance Co. (EIC) as a Massachusetts-domiciled insurance company, ensures the protection of EIC's The GE view From Page 28 and permits a strong EIC to continue to employ more than 200 employees (many of whom were staff transferred from EMLICO before the redomestication) at its Massachusetts headquarters in Beverly.'' The special master has been selected as former Chief Justice of the Superior Court, Robert L. Steadman.

Reinsurers would be able to raise objections to any compromise with the special master or with the Supreme Judicial Court, even though they would still have arbitration or litigation avenues available to them if they are still not satisfied.

GE said: "The proposed receivers' agreement appropriately balances the interests of the foreign sovereign (Bermuda) and the commissioner acting for the Commonwealth and on behalf of the public interest.'' COURTS CTS