football in the US This week's dramatic ruling of the Massachusetts high court that Electric Mutual Liability Insurance Co. (EMLICO) never left the state, has created uncertainty as to EMLICO's future as a Bermuda-domiciled insurer in liquidation.

Even local authorities yesterday could not say what will become of the company that is now claimed by two countries.

According to the ruling, state commissioner of insurance, Linda Ruthardt, exceeded her authority when she approved EMLICO's transfer to Bermuda in 1995.

Finance Minister Grant Gibbons said that it was still unclear what the ruling meant in the context of a Bermuda company, whether or not liquidation would continue here, and, what would happen in Massachusetts.

Dr. Gibbons said, "From our perspective that whole issue is still a bit cloudy. It is interesting that the scope of the commissioner's authority was not recognised before this point.

"We're still not clear, and it is something that we are obviously having a look at, what the implications are for the Bermuda company.'' Dr. Gibbons said that many of the issues involved legal questions and it would be premature to comment before seeking legal advice.

He said, "We will be talking -- I'm sure the Registrar of Companies and others will be talking -- to a number of people to try to understand what the legal ramifications are for the company that is in Bermuda.'' Reaction here and abroad is coming as just across the Atlantic, the Privy Council in London, may soon consider other issues relating to EMLICO's controversial 1995 incorporation in Bermuda.

In London, EMLICO reinsurer, Kemper Reinsurance as appellant, and the respondents (The Minister of Finance, the Registrar of Companies and EMLICO) are arguing technical points as Kemper Re seeks the right of judicial review of Government's decision to allow EMLICO into the country.

Meanwhile, interested parties to the EMLICO saga have reacted in different ways to the Massachusetts result.

And there was evidence yesterday that the entire issue may become even more of a political football during the current gubernatorial race for republican nomination, including allegations that the former Governor's administration pressured Ruthardt to leave EMLICO alone.

Ms Ruthardt has told the Wall Street Journal through a spokesman that she now planned to seek approval for her department to oversee the liquidation.

The Boston Globe said her statement indicated that the ruling now permitted her to initiate a Massachusetts liquidation petition for EMLICO.

The ruling hinged on the incorrect interpretation of the law as regards to the redomestication of EMLICO to another state.

That interpretation came from EMLICO's lawyers. Much has already been made of the fact that Ruthardt accepted their word without seeking an independent opinion.

Still, in the face of the Massachusetts court ruling, statements from EMLICO's liquidators suggest that it will be business as usual with the Bermuda liquidation.

EMLICO's founding owner, chief policyholder and chief creditor, General Electric Co. (GE), seemed almost oblivious to the court's position.

Their prepared statement was: "This ruling in no way affects the legitimacy of GE's claims against EMLICO. GE will continue to press these claims in Bermuda, where EMLICO has been in liquidation since October 1995.

"GE is pleased that the ruling confirms its position that the reinsurers, as debtors, have no standing to challenge the commissioner's decisions regarding EMLICO.'' Much like GE, the Joint Liquidators for EMLICO -- David E.W. Lines and Peter C.B. Mitchell of Coopers & Lybrand Bermuda, and Christopher Hughes of Coopers & Lybrand London -- emphasised the related ruling which upheld a Superior court decision. That ruling had held that reinsurers lacked the standing to contest the Massachusetts commissioner of insurance's decision to allow EMLICO to redomesticate to Bermuda.

And, it said, the reinsurers had not demonstrated that the commissioner's order to send EMLICO to Bermuda had caused them direct and certain injury.

The Joint Liquidators said the Supreme Judicial Court had invalidated the commissioner's petition which sought a US receivership to provide some American oversight over the Bermuda liquidation of the insurer.

But the liquidators stated: "We are gratified by the court's decision that EMLICO's reinsurers were not injured and lack standing to challenge EMLICO's redomestication.

Doubt over EMLICO "We are disappointed by the court's disapproval of the voluntary receivership agreement. We will continue to pursue all appropriate avenues to ensure that the estate of EMLICO is liquidated in an equitable and expeditious manner.

"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.'' Somewhat surprisingly, the liquidators concluded that "the redomestication (of EMLICO) took place with the formal approval of the regulatory authorities in both jurisdictions.'' The Massachusetts high court has said that the redomestication to Bermuda was invalid under the general laws of Massachusetts because Bermuda was not a "state'' as defined by the law. The Justices ruled that legislators intended the term "state'' to only mean another state of the US. They said the commissioner had no authority to approve EMLICO's redomestication to Bermuda and in fact, "there was no lawful transfer, and EMLICO never ceased to be a Massachusetts insurer.'' Kemper Re has been surprisingly quiet in recent months. But Nick J. Giovanni, a lawyer representing Lloyd's and other reinsurers praised the Supreme Judicial Court's decision.

He was quoted by The Boston Globe as saying, "There is no place else for them to go. The highest court has spoken.'' He added, "It is unfortunate that it has taken this amount of resources to get GE and EMLICO exposed.'' Grant Gibbons