When Glenn Titterton accepted the job as top executive of Bermuda Fire & Marine Insurance Co. Ltd. he was assured by chairman Charles Collis that the company's disastrous foray into international insurance was under control.

"My understanding of the overall state of the company at that time, based on my discussion with the chairman, was that the international business was now under control, had been properly provided for, would run off over a long period of time and that my challenge would be to restore confidence in the company and to move the company forward by building on existing strengths,'' Mr. Titterton said in his statement before Supreme Court.

He's appearing as a witness for defendant BF&M Ltd., which was created in 1991 as a separate company to hold Bermuda Fire's profitable domestic business.

Mr. Titterton became chief executive officer of Bermuda Fire in January, 1991 and is currently president and chief executive of BF&M. Bermuda Fire went into liquidation in 1993 owing $450 million to international policyholders. The liquidator is suing BF&M, auditors Cooper & Lines, legal adviser Conyers Dill & Pearman and five former directors, claiming that the 1991 reorganisation was a fraud intended to deprive the creditors of assets.

In court yesterday Mr. Titterton denied that the reorganisation was being done because management and the directors knew the company was going to become insolvent.

Under questioning from Robin Potts, lawyer for the five former directors, he said he was unaware of a "tidal wave of pollution claims'' about to hit the company as claimed by the liquidator.

"No, not in 1991,'' he said.

He said he was "slightly surprised'' as the further deterioration in the expected claims against the company as reflected in the 1990 accounts.

However he said the deterioration by some $3.75 million (CHECK) was partially justified by a change in the methods used by actuarial firm Tillinghast in estimating future claims.

"I felt that we had reached a plateau and that deterioration in future years would be minimal,'' he said.

He said he had also been told at the time by an insurance expert that Bermuda Fire was "ahead of other companies'' in estimating reserves.

"He felt if anybody had it right, we had it right,'' Mr. Titterton said.

He said notes of meetings taken by Conyers Dill & Pearman lawyer Martin Lane reflected that he didn't understand the nature of Bermuda Fire's operations.

In the notes of the May 29, 1991 meeting Mr. Lane noted that Charles Collis had stated that the company was "becoming short of cash''. Conyers Dill & Pearman were assigned to take the minutes during the runup to the reorganisation.

Mr. Titterton said Bermuda Fire was experiencing a cash flow problems because of slow payment of reinsurance, but at the end of 1990 the company had cash and deposits of $30 million.

"So it didn't make sense,'' he said. "The focus was cash flow...It was being solved.'' He also said a reference that Mr. Collis reportedly said the company "may need to look to shareholders for an injection'' of cash didn't make any sense to him.

"I can't imagine in what context he would have said something like that,'' he said. "...I think Martin Lane didn't understand the subject when he wrote that paragraph.'' Mr. Titterton also said that discussion of the potential "liquidation'' of the company was only discussed in meetings as a "worst case scenario''.

Mr. Titterton continues giving evidence today.

BUSINESS BUC