Investors yesterday smiled on the news that financially troubled Bermuda life reinsurer Annuity and Life Re had settled a longstanding legal dispute with Transamerica Re.

The settlement could help the beleaguered firm ? which was the first life reinsurer to hang out its shingle in Bermuda in 1998 ? as it faces delisting of its shares on the New York Stock Exchange (NYSE) for being in breach of minimum listing requirements after its share price fell to trading below $1 for a prolonged period.

News yesterday that Annuity and Life Re (ANR) had inked a settlement with Transamerica ? which management said accounted for a ?large percentage of assets? ? under which both parties agreed to settle all disputes relating to current arbitration proceedings, was welcomed by investors.

Shareholders reacted favourably, pushing up the company?s flagging share price to trade in the $1 range, yesterday.

Under the terms of the settlement, ANR will pay out approximately $8.7 million, representing amounts currently due under the reinsurance treaty as of April 30.

Over the years, Annuity and Life Re (ANR) has paid out millions in charges related to its annuity contract with Transamerica.

It actually took legal action to rescind the contract, which would have protected it from any future claims. But in November, 2002 ANR lost that bid after an arbitration hearing on its claim for breach of contract against Transamerica Re, found in favour of Transamerica?s position that the treaty between Annuity Re and Transamerica constituted ?a valid and enforceable contract?.

However, there have been further disputes on how much should be paid out under the terms of that contract and threats from Transamerica that it would begin liquidation proceedings against ANR if the matter was not resolved.

The company has also had to restate its earnings several times after orders made by the US Securities and Exchange Commission (SEC).

ANR said yesterday that the settlement this week ? which does not alter the contract?s original terms, and leaves it in force ? was not expected to have any adverse material impact on the company.

ANR said under the terms of the settlement agreement, ?Transamerica and the company will calculate monthly settlements under their reinsurance treaty in a manner the company believes is consistent with the original terms of the treaty?.

Transamerica also agreed to the company?s $5 million offset of amounts owing to Transamerica at October 31, 2003.

The company will pay Transamerica approximately $8.7 million, representing amounts currently due under the reinsurance treaty as of April 30, 2004.

CEO Jay Burke said: ?We are very pleased that Transamerica and the company were able to amicably resolve their differences. The company?s future is heavily dependent upon the performance of this contract, and we are hopeful that with this dispute out of the way we can have a more constructive dialogue with Transamerica.?

Mr. Burke told that he could not say whether or not the settlement with Transamerica would have any impact on the New York Stock Exchange?s actions. He added that the NYSE?s issues with ANR were both ?qualitative and quantitative?.

He added that the company was not expecting to profit from its business with Transamerica, holding the ?expectation that this contract (with Transamerica), will break even going forward?.