The former head of Bermuda Fire & Marine Insurance Co. Ltd. international operations yesterday denied allegations that the company's 1991 reorganisation was intended to strip profitable domestic assets out of the hands of overseas creditors.

Irmgard Viera, who was appointed to head Bermuda Fire's international operations in 1989, yesterday began giving testimony on behalf of defendants BF&M Ltd. in the ongoing civil case.

She is currently vice president of BF&M Management Ltd.

BF&M was created in 1991 to hold Bermuda Fire's profitable domestic business.

"I did not know and do not believe that the members of the finance committee of BFMIC (Bermuda Fire) were reckless as to whether there would be sufficient assets left in BFMIC to meet the claims of the creditors of the international operations when they agreed to the reorganisation,'' Ms Viera said in her witness statement.

Five members of the finance committee are also being sued by Bermuda Fire's liquidator and international creditors in the case.

"I do not believe that the separation of the domestic business from the international business was bound to defeat, hinder, and/or delay the creditors of the international operations,'' she said.

"Based on the professional advice received at the time, there were sufficient assets left in BFMIC to meet all claims in respect of the international operations at the time of the reorganisation.'' She also said Bermuda Fire followed the London insurance market practice at the time by not reserving for pollution claims because the company believed clauses in its policies excluded liability.

The liquidator alleges Bermuda Fire didn't properly reserve for potential pollution liability and bad debt and that the company was made insolvent, or was insolvent in 1991.

She said Bermuda Fire auditors Cooper & Lines had not advised the company that a reserve was necessary for potential bad debt on future claims.

Under procedures being followed in Supreme Court a witness statement is first entered before he or she gives further evidence and is cross examined by the lawyers.

In further testimony given yesterday Ms Viera said she believed that the reserves left behind in Bermuda Fire after the reorganisation were sufficient to meet claims.

She said the reserves were established according to projections made by actuarial firm Tillinghast.

New Witness: BF&M Management vice president Imgard Viera arrives at Supreme Court.

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