The joint provisional liquidators of Bermuda-based Belvedere Insurance Co.

have informed creditors they are considering a number of options in the run-off of the company's business, including a scheme of arrangement.

In their first report on Belvedere's financial affairs, the provisional liquidators said the meeting of creditors will be held December 18 at the Hamilton Princess Hotel.

The meeting is being held to appoint permanent liquidators, and to determine whether to appoint a committee of inspection into the company's affairs.

Malcolm Butterfield of KPMG Bermuda and Anthony McMahon of KPMG London were appointed joint provisional liquidators of the company by the Bermuda Supreme Court in a winding up order on October 9.

In their report Mr. Butterfield and Mr. McMahon noted they had secured Belvedere's assets and had been granted a preliminary injunction order in the US to stay all proceedings against the company and protect assets there.

The liquidators have also made an arrangement with AON (Bermuda) to administer the run-off of Belvedere's business.

Belvedere began as a Bermuda company in 1978 writing general insurance and reinsurance business, including professional indemnity, catastrophe reinsurance and medical malpractice.

Between 1980 and 1986 a significant amount of business was written by Belvedere Underwriting Agents Ltd. (BUAL), a wholly owned subsidiary. BUAL also wrote business on behalf of GTE Reinsurance Co. Ltd. from 1980 to 1983 and for Brittany Insurance Co. Ltd. from 1984 to 1986.

Belvedere stopped writing new business in 1994 and began an orderly run-off.

BUAL managed the run-off of business written on behalf of Brittany. GTE managed the run-off of business written on its behalf by BUAL.

"Following the decision to place Belvedere into run-off, the company experienced a deterioration in its claims development, particularly in relation to the professional indemnity and medical malpractice books of business,'' the provisional liquidators reported. Belvedere then brought a number of claims against GTE. According to a previous story in The Royal Gazette the dispute went to arbitration over a reported $9 million bill that Belvedere claimed for purported underwriting management and run-off services performed for GTE.

Under a July 7 counterclaim GTE petitioned the Supreme Court to wind up Belvedere and the Official Receiver was appointed interim provisional liquidator. The arbitration proceedings were settled on September 22 with the decision that Belvedere was insolvent.

Subsequently the Official Receiver applied to the Supreme Court to liquidate the company and appoint the joint provisional liquidators.