Vesttoo

The documents figure in a potential criminal case against a CCB employee.

The man is alleged to have conspired with others to falsify LOCs and collateral letters.

The fund apparently plans to purchase life insurance policies as investments.

Bermuda liquidators had earlier objected to out-of-court agreements between parties.

Sources cited numerous issues with how collateral protection insurance was designed.

The approval takes account of several out-of-court settlements.

Procedural expenses in the case have been as high as $100,000 per day.

Vesttoo is unable to make a similar request again.

The agreements emerged from a mediation process.

All parties interested in the case have agreed to participate in the process.

The figure was disclosed in the group's recent 8-K disclosure.

The committee claims Chaucer waited until it had ‘maximum leverage’ over other debtors.

The debtors are challenging the US courts for not addressing cross-border issues.

The motion was filed by Chaucer Insurance Company and Chaucer Syndicates, as managing agent of Lloyd’s Syndicate 1084.

Insurance Insider takes a look at some of the biggest news and developments of 2023.

The “convenience claims” route to payout will be limited to claims up to $200,000.

The lawsuit, filed Thursday on behalf of Clear Blue and its subsidiaries, alleges that Aon conducted insufficient due diligence on the ILS InsurTech.

The Trustee had sought to accelerate the liquidation process while avoiding significant admin costs.

Under the agreement, reached late on Monday, Vesttoo would sell its assets in a transaction that would close by December 1, 2023.

A credit loss owing to a fraudulent letter of credit from Vestto added 1 point to the combined ratio in Q3, insurance president Jeremy Noble told analysts during a conference call.

The beleaguered firm claims its creditors are unsympathetic around delays due to the Israel-Hamas conflict.

In a motion filed Friday, the trustee requested to convert Vesttoo’s Chapter 11 case to Chapter 7 so that “an independent fiduciary can wind down the debtor’s affairs and avoid significant administrative costs”.

Earlier today, in a bid to accelerate liquidation, the company’s unsecured creditors requested early termination of the exclusivity period granted Vesttoo to develop a reorganization plan.

Doing so would save “at least $8.5mn in cash” based on the firm’s monthly operational expenditures, according to a recent motion.

Creditors already have authorisation to access Vesttoo’s data as part of their investigation.

The motion seeks discovery of information and documents about the structure and operation of White Rock’s cells.

The company has also been appointed to the statutory committee of unsecured creditors in Vesttoo’s bankruptcy case.

The InsurTech claims five former staff, including the CEO and CFO, forged signatures and impersonated bank staff.

A Delaware judge has ruled in favour of Vesttoo’s automatic stay in the bankruptcy case.

The Official Committee of Unsecured Creditors is turning the spotlight on Vesttoo’s current board and management.

Most of the broker’s clients have incurred losses below or about equal to ceded premiums and only one with losses exceeding ceded premiums.

The company also said that it has secured the replacement of all reinsurance on its ongoing portfolio of business through third-party reinsurers and an affiliated reinsurer.

Industry sources view the letters of credit (LOC) fraud scandal at Vesttoo as a specific rather than systemic failure, with further scrutiny likely on LOC providers.

Yu Po provided 79% of supposed capacity behind the 65 transactions closed by Vesttoo since 2020.

Since 2020, Vesttoo has quoted 96 and closed 65 transactions with collateral totaling roughly $3.9bn, according to a court filing.

Through legal representatives, Bertele “strongly” rejected all allegations made against him by Vesttoo in a Thursday statement.

Court filings indicate use of “phony phone numbers” and creation of a “wholly fictitious person” in the letters of credit fraud that has engulfed Vesttoo.

A committee of unsecured debtors was appointed, including Markel, Clear Blue, Porch’s HOA, United Automobile Insurance and Proventus.

Markel Bermuda entered into two collateralized reinsurance transactions with White Rock for the benefit of a segregated account owned by a Vesttoo affiliate.

The Aon transformer is seeking information on the origins of alleged fraudulent letters of credit.

The Aon unit noted 37 LOCs “purportedly procured by China Construction Bank (CCB), Banco Santander and Standard Chartered Bank US”.

The story will play out through bankruptcy court filings, but other exposed players and segments will be on watch for ratings agency findings and legal action.

Plus the latest people moves and all the top news of the week.

Vesttoo has filed documents at the Bankruptcy Court for the District of Delaware that seek an automatic stay against White Rock and its putative liquidators.

The company's Ebitda for 2022 was estimated at $60mn compared to $20mn in 2021.

Both organizations have agreed for the appointment of a liquidator for Vesttoo transaction structures at the Supreme Court of Bermuda.

Plus all the latest executive moves and the top news from the week.

The top five fronting companies by dollar exposure to CCB are: Clear Blue, Homeowners of America, Clear Blue Specialty, Trisura Specialty and Highlander Specialty.

The embattled ILS InsurTech said its investigation into fraudulent letters of credit used as collateral in the company’s transactions was in “advanced stages”.

The firm’s interim CEO Ami Barlev has argued that, with Vesttoo’s weekly expenses being $360,000, freezing assets above $1m would be “catastrophic for the company”.

The ILS transformer platform claims Vesttoo is in breach of shareholder agreements.

The incoming CEO said initial recommendations from investigators had been adopted in full.

White Rock’s petition to the New York Southern District Court stated that, "on information and belief, Vesttoo intends to remove all or substantially all funds from its US bank accounts”.

Porch books $48.2mn provision charge in relation to Vesttoo exposure

New CEO Ami Barlev – who has a background in tech, AI, comms and real estate – said he took the role at an “extremely difficult moment” for the InsurTech.

Prior-year legacy deals and higher reinsurance costs are just some of the issues that brokers, MGAs and other cedants are confronting in clearing up after the debacle over allegations regarding faked letters of credit.

As part of a restructuring, Vesttoo is liquidating its collateralised insurer in Bermuda, but continues to operate its branches in New York, London and other territories.

The firm has written to brokers and counterparties urging them to continue working with it to deliver solutions.

The company said it had completed ‘Know Your Customer’ checks on all parties, as the alleged fraudulent LOC crisis continues.

The company has already seen submissions from MGAs that are potentially looking for a new fronting partner.