Acting Finance Minister, John Barritt, yesterday remained cautious over allegations in a Massachusetts court that Bermuda insurance regulation was not as stringently controlled as it is in the US.

It is the latest of such claims, this time in court submissions, that have emerged during the controversy over the 1995 redomestication to Bermuda of Electric Mutual Liability Insurance Co. (EMLICO).

The defunct insurer was founded 70 years ago by General Electric Co. (GE) as their liability insurer. But after arriving here two years ago, it declared bankruptcy four months later. The latest claims were made by a consumer advocacy group, the Center for Insurance Research (CIR), which describes itself as dedicated to the protection of public interest in matters relating to insurance ( The Royal Gazette , Sept. 24).

Mr. Barritt said, "Naturally, the Finance Ministry on behalf of the Bermuda Government views with concern the allegation that has been made in this court case.

"We will be requesting and reviewing the briefs that have been filed, to determine what, if any, further action should be taken by the Bermuda Government.

"That said, we also recognise that what has been alleged is a matter of argument in a court in another country and we fully expect that some of those assertions will be challenged by some of the parties to that particular action. And we will monitor that, as well.'' CIR's brief last Friday to the Supreme Judicial Court of Massachusetts argued any interpretation of US state laws allowing the commissioner of insurance to approve the redomestication of EMLICO "to a foreign country with a poor regulatory environment would serve as a dangerous precedent in Massachusetts and nationally.'' The brief referred to the controversial 1994 Dingell report that was critical of Bermuda and other regulatory environments (House Subcommittee on Oversight & Investigations of the Committee On Energy & Commerce, 103rd Congress, "Wishful Thinking: A New World of Insurance Insolvency Regulation'').

CIR said, "Moreover, in the same report, the US Congress specifically characterised Bermuda's insurance industry as being "shrouded by'' a "cloak of secrecy.'' Questions have been raised in the US about what Bermuda and Massachusetts insurance regulators knew about EMLICO's financial position before the move.

Some reinsurers have complained that regulators in both jurisdictions were hoodwinked by EMLICO, GE and associated companies, which allegedly used fraud in a master scheme to get the company here so reinsurers would be forced to pay more for asbestos and other environmental claims. GE and EMLICO's Bermuda-based liquidators at Coopers & Lybrand have denied the claims.

JOHN BARRITT -- Adopting cautious approach BUSINESS BUC COURTS CTS