Registrar of Companies Kymn Astwood moved yesterday to appoint provisional liquidators to troubled Bermuda-based New Cap Re group, ending months of industry speculation.

The announcement left several insurers scrambling to count their losses amid fears that the appointment of provisional liquidators could sound the death knell for claims against the company.

Mr. Astwood has informed the New Cap parent company he intended to apply to the Supreme Court for liquidators to be appointed to New Cap Re Corp. Holdings Limited and its Bermudian reinsurance subsidiary.

As a result the directors of New Cap's Australian reinsurance subsidiary yesterday resolved to appoint a voluntary administrator.

The directors of New Cap issued a statement, after insurance sector rumours of the impending collapse were revealed in yesterday's Royal Gazette , to "ensure that the market is promptly informed of the position''.

The Registrar's inspector -- given the task in February -- recently filed his report prompting the Registrar to decide a provisional liquidator was needed.

"Following the Registrar's advice of his immediate intentions, the directors have concluded that they have no option but to put the Australian subsidiaries into voluntary administration,'' New Cap's statement said.

"Accordingly they have today resolved to appoint Mr. John Gibbons of Ernst & Young as voluntary administrator to New Cap Re Australia and to the company's other Australian subsidiary NC Re Capital Limited.'' The statement said a "critical cashflow issue'' for New Cap Re Australia was the inter-group quota share arrangement with New Cap Re Bermuda.

"The ability of New Cap Re Australia to pay its debts as and when they fall due, and its solvency, is dependent on the assumption that New Cap Re Bermuda would meet its obligations in respect of this arrangement.

"The proposed appointment of a provisional liquidator to New Cap Re Bermuda means that his assumption can no longer be made.'' The directors of the company had been "faced with continuing uncertainty as to the financial position of the company'', the statement said.

"This has prevented the preparation of the financial statements for the group and the release of any reliable information to the market,'' it said.

The uncertainty stemmed from the fact that the extent of underwriting losses for 1998 were still unclear, with substantial additional claims continuing to roll in since February.

The statement said the latest draft of the financial statements, including impact of claim development to the end of February this year, indicated a consolidated loss in the region of $140 million.

And a loss of that amount would result in the company having total capital of about $50 million, of which $40 million would be shareholders' equity.

Kymn Astwood