Bermuda Supreme Court will today adjourn a petition to wind up troubled United Security Life Insurance Company.

The Trinidad-based firm will be given a five-and-a-half week stay of execution which may, even at this late stage, lead to a possible rescue plan.

The adjournment comes at the behest of the company and is welcome news for its Judicial Manager, Mr. Brian Fortier.

Mr. Fortier is currently in the process of preparing a recommendation for the company's future and will report his findings to Trinidad's High Court on September 16.

His preliminary report to the High Court is expected to recommend that United Security be allowed to continue operating but with reduced benefits.

Yesterday, United Security's lawyer, Mr. Mark Diel, said: "We wish to have the benefit of the Judicial Manager's report on the company before the hearing takes place.'' Mr. Fortier was furious when Bermuda's Registrar of Companies, Mr. Malcolm Butterfield, last month filed a petition to wind up United Security.

At the time, he said Mr. Butterfield should have had the courtesy to have waited until Mr. Fortier had tried to come up with a rescue plan. On June 16, Trinidad's High Court had given Mr. Fortier three months to look at the firm and determine its future.

"I regret this court case in Bermuda is happening at all,'' said Mr. Fortier.

"Winding up is almost never in the interests of the policyholders of a life insurance company.'' Under the Bermuda plan, the only people to make money would be the accountants and lawyers involved with liquidating the company, he said.

"When they've had their share there will be even less for policyholders,'' he said.

In the past, Mr. Fortier has accused Bermuda's regulatory authorities of having little understanding of how a life insurance company works.

"People take out insurance because they want protection,'' he said. "I'm trying to come up with a plan which will continue that protection, even if in a reduced form.'' Under Bermuda's liquidation plan, policyholders will be left with no protection and are likely to receive between 30 and 40 cents on the dollar if the company is liquidated.

United Security has several thousand policyholders throughout the Caribbean and Bermuda, the large majority of whom are on low incomes.

Its Bermuda branch -- which was never incorporated as a subsidiary company -- was second in size only to the Trinidad operation.

The company was run for many years by Mr. John Gonsalves, who died in the 1980s.

Before Mr. Fortier took over in June of this year, the company was being run by Mr. Gonsalves' stepson Mr. David Shepherd and David's brother Keith.

The bulk of the company's premiums came from long-term life insurance policyholders, although substantial income also came from short-term medical and accident coverage.

The company's method of operating is known as "industrial insurance'', meaning that employees physically went out and collected premiums from clients on a regular basis, which was weekly in Bermuda.

Comments from Bermuda's Minister of Finance the Hon. David Saul that medical policyholders would be barely affected because they were covered for all the time they had paid premiums and could now obtain insurance elsewhere have been dismissed as "nonsense'' by those in the industry.

"Many of these people have fallen ill during their time with United Security and would now find it impossible to find other coverage,'' said one officer with an insurance firm.

"Others will now find it difficult to take out alternative insurance because of their age. Even if they are able to, their premiums are likely to be sky high.'' Although few people in the industry are prepared to say anything on the record, privately many freely admit that they believe Bermuda's insurance regulators have made a huge mess of the affair.

One professional said yesterday: "If Trinidad's High Court opts to go for a rescue plan then Bermuda will be left with huge dollops of egg on its face.'' Bermuda's Ministry of Finance, however, believes the High Court will decide to wind up the company, which is why it decided to get in first to protect the assets in Bermuda.

To wind up a company which is based outside Bermuda would be a complicated legal task for Bermuda's Registrar of Companies.

It is understood the only way to do this would be for Bermuda's Supreme Court to issue a winding up order and then try to make it binding in Trinidad under a reciprocal Commonwealth treaty. Bermuda's lawyers, though, say this is a hazy area of law.

Meanwhile, United Security's provisional liquidator, Mr. R. Gil Tucker, who was appointed by Bermuda's Supreme Court earlier this month, has laid off all the firm's 11 staff in Bermuda.

"All the staff were laid off on August 18,'' he said. "Since the firm was writing no new business there was nothing for them to do.

"I could not have continued to use the company's money to pay employees who didn't have anything to do.'' Mr. Tucker said he had collected a substantial amount of data on United Security's local policyholders.

"All I'm doing is gathering information and building up a data base,'' he said. "I'm unable to do anything else until Supreme Court gives me further instructions on October 6.''