The head of Bermuda Fire & Marine Insurance Co. Ltd.'s international operations during the 1991 reorganisation was yesterday grilled in Supreme Court about how she came to the conclusion that a $12 million surplus left behind would be enough to guard against any future contingencies.

Irmgard Viera, who is now head of BF&M Management Ltd., yesterday stood by previous testimony she believed Bermuda Fire had made adequate reserves for future claims against the international business. She is being questioned by Clare Montgomery, the lawyer for Bermuda Fire's liquidator Ernst & Young.

Ms Montgomery yesterday referred to documents from actuarial firm Tillinghast, and auditors Cooper & Lines which pointed to the uncertainty surrounding future asbestos claims and bad debt from reinsurers.

Ms Montgomery wanted to know why Ms Viera continued to follow the middle figure of Tillinghast's range of estimates for the reserves Bermuda Fire needed to set aside for future claims.

She also alleged the company had not properly checked to see whether there had been further deterioration in the amount of unexpected claims coming in during the months leading up to the reorganisation. Ms Viera said she believed the Tillinghast middle estimates were as accurate as could be.

"I'm sure that all reasonable estimates were covered in the best estimates,'' she said. "The middle number seemed prudent and sufficient.'' Bermuda Fire's liquidator claims the 1991 reorganisation was a fraudulent transaction in which profitable domestic assets were stripped from the company to form BF&M. The liquidator claims reserves were deliberately underestimated so the company would appear solvent for the reorganisation. Ms Viera is testifying for defendant BF&M. Her testimony continues today.

BUSINESS BUC