Bermuda Fire & Marine Insurance Co. Ltd. at all times carefully monitored the company's losses and bad debt situation and properly made the appropriate reserves, a former top executive said yesterday in Supreme Court.

Keith White, who headed Bermuda Fire's international operations from 1985 and 1989, said the firm had hired actuarial firm Tillinghast to get an accurate forecast on the company's future liabilities on insurance policies underwritten in the London market.

Over the years to 1989, when he left to join ACE Ltd., Mr. White said the Tillinghast figures got more and more accurate. A comparison of the company's payout for claims and the reserves as set according to Tillinghast estimates were as projected in 1988 and 1989, he said.

Bermuda Fire was attempting to deal with losses stemming from its foray into the London market, especially a book of business managed through HS Weavers.

Mr. White was under cross examination from defence lawyer Elizabeth Gloster, lawyer for defendant BF&M Ltd.

"Did it confirm your belief that the Weavers account had settled down?'' Ms Gloster asked.

"Yes,'' Mr. White said.

He said the figures coming in during his last year at the company confirmed his belief that the overall losses to the company had been contained through reserves and a stop-loss policy.

He said he was "much more comfortable with the figures than the earlier days'' when predicted losses began mounting up and Tillinghast was attempting to make estimates.

Tillinghast was contracted to give an undiscounted estimate of reserves and then used a rate based on the company's return on its investment portfolio to reach a discounted figure on how much the company should set aside to meet future cash flows.

Mr. White had previously testified that he did not think the company was insolvent and believed international losses were under control when he left to join ACE Ltd. in 1989.

Under questioning he said Bermuda Fire was following accepted market practice at the time in not reserving for possible pollution claims. He said the company believed policies excluding pollution coverage protected the company from such losses.

The cross examination continues Monday. Mr. White is testifying under subpoena.

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