relented and published a report that expresses criticism of the Massachusetts Division of Insurance (DOI) for allowing controversial Electric Mutual Liability Insurance Co. (EMLICO) to redomesticate, or move its domicile, from Massachusetts to Bermuda.

The report's contents were detailed in an article that appeared in The Royal Gazette on June 4 and in other publications.

Committee chairman James H. Fagan said last week that because the preliminary report had been leaked to "certain members of the media'', the committee decided to make the report public.

He stressed that the report was not final and was prepared for the use of committee members. But he left no doubt about the importance of the document.

While indicating that the committee had not yet taken a final position or drawn conclusions on the information in the report, he said in a letter to "all interested parties'': "The report raises extremely serious questions which the committee will continue to investigate.'' The statement came as Massachusetts insurance commissioner, Linda L. Ruthardt, was downplaying the report that was so critical of her DOI.

But Democratic State Sen. Dianne Wilkerson, chairwoman of the joint committee on insurance, enthusiastically received the report as a vindication of her repeatedly expressed complaints over EMLICO.

The preliminary report documented a litany of concerns that amounted to allegations of DOI sloppiness in investigating the circumstances under which EMLICO was restructured in preparation for its move to Bermuda.

It also stated that the division relied on EMLICO's interpretation of Massachusetts law, without checking with independent sources and failed to obtain necessary documents that would have showed GE's claims for more than a $500 million that had not been met by EMLICO.

The report said there were sufficient "red flags'' raised that should have alerted commissioner Linda L. Ruthardt that there were ramifications for others than just GE and EMLICO.

It also said the DOI's process that allowed for the redomestication was "fundamentally flawed and failed to achieve the level of oversight necessary''.

At the centre of the criticism, the commissioner labelled the report "bizarre'' and "filled with inaccuracies'', according to leading trade publication, Business Insurance this week.

On Monday, Business Insurance reported: "In a measure of the suspicion and ill feeling surrounding the EMLICO affair, Ms Ruthardt also initially questioned whether the report itself was a hoax.

"Before learning that it had been publicly released by the House bureau, Ms Ruthardt pointed to some of its conclusions -- questioning the proposed settlement, for example -- and said: `That's why I suspect this may be a spurious document.' "She went on to speculate that the report may have been produced by an EMLICO reinsurer.'' The 70-year old EMLICO was set up by GE for liability insurance, but was cleared by the DOI and Bermuda's regulators to move to Bermuda during the summer of 1995, after moving all but loss-plagued general liability business into affiliate, Electric Insurance Co.

The problem business was moved to Bermuda under EMLICO's name less than four months before EMLICO claimed to the Bermuda Supreme they were insolvent, with reinsurers later claiming the move was rife with fraud.

Reinsurers believe GE and EMLICO planned the move because the Bermuda jurisdiction would force reinsurers to pay faster.

EMLICO and GE have claimed that reinsurers are simply trying to avoid paying what they owe. They said insolvency came as a surprise to EMLICO once new methods of loss reserving where employed.

Reinsurers are also challenging the division of insurance's right to allow EMLICO to move to Bermuda.

The House report's initial findings include recommendations for changes in the law and seeks the return of EMLICO to Massachusetts. The House investigation continues.