HAMILTON, Bermuda, Aug. 31,
2023 /PRNewswire/ -- Markel Bermuda Limited (MBL)
announces today that it has been appointed to the statutory
committee of unsecured creditors in the chapter 11 bankruptcy in
Delaware of Vesttoo Ltd. and its
affiliates (Vesttoo).
MBL's involvement in the bankruptcy stems from two
collateralized reinsurance transactions it entered into utilizing
White Rock Insurance (SAC) Ltd.'s segregated account
platform. MBL entered into a total of two collateralized
reinsurance transactions with White Rock for the benefit of a
segregated account owned by a Vesttoo affiliate.
In the transactions, MBL ceded collateral protection insurance
risk to the segregated account, which in turn was required to
provide reinsurance collateral to MBL. The letters of credit were
provided as collateral backstops in the event claims were made and
not paid on the underlying policies for these transactions. These
letters of credit, one for $50
million and the other for $77.75
million, were later deemed to be fraudulent. Both
letters of credit list an affiliate of Vesttoo as the applicant on
behalf of White Rock, with MBL as the designated
beneficiary.
On August 14 and 15, 2023, Vesttoo
and various affiliates filed voluntary chapter 11 bankruptcy
petitions in the U.S. Bankruptcy Court for the District of
Delaware. MBL is exploring remedies against third
parties (including Vesttoo in the context of its chapter 11
case) that may be available to MBL to mitigate or eliminate
potential losses resulting from the fraudulently tendered letters
of credit.
MBL is a class 4 Bermuda insurer, a subsidiary of Markel Group
Inc. and part of Markel's global specialty insurance
operations.
Markel Group Inc. currently does not expect that losses arising
from these fraudulently tendered letters of credit will have a
material adverse impact on its results of operations, financial
condition or liquidity.
About Markel
We are Markel, a leading global specialty
insurer with a truly people-first approach. As the insurance
operations within the Markel Group Inc. (NYSE: MKL), we operate the
Markel Specialty, Markel International, and Markel Global
Reinsurance divisions, as well as State National, our portfolio
protection and program services operations, and Nephila, our
insurance-linked securities operations. Our broad array of
capabilities and expertise allow us to create intelligent solutions
for the most complex risk management needs. However, it is our
people – and the deep, valued relationships they develop with
colleagues, brokers, and clients – that differentiates us
worldwide.
About Markel Group
Markel Group Inc. (NYSE: MKL) is a
diverse family of companies that includes everything from insurance
to bakery equipment, building supplies, houseplants, and more. The
leadership teams of these businesses operate with a high degree of
independence, while at the same time living the values that we call
the Markel Style. Our specialty insurance business sits at the core
of our company. Through decades of sound underwriting, the
insurance team has provided the capital base from which we built a
system of businesses and investments that collectively increase
Markel Group's durability and adaptability. It's a system that
provides diverse income streams, access to a wide range of
investment opportunities, and the ability to make capital available
where needed with great efficiency. Most importantly though, this
system enables each of our businesses to advance our shared goal of
helping our customers, associates, and shareholders win over the
long term. Visit mklgroup.com to learn more.
Cautionary Statement
Certain of the statements in this
release may be considered forward-looking statements as defined in
the Private Securities Litigation Reform Act of 1995, as amended.
Statements that are not historical facts, including statements
about Markel Group's beliefs, plans or expectations, are
forward-looking statements. These statements are based on Markel
Group's current plans, estimates and expectations. There are risks
and uncertainties that could cause actual results to differ
materially from those expressed in or suggested by such
statements including the risk that MBL is unable to mitigate
or eliminate any potential losses resulting from the fraudulently
tendered letters of credit. Factors that may cause actual results
to differ are often presented with the forward-looking statements
themselves. Additional factors that could cause actual results to
differ from those expressed in or suggested by such statements are
set forth in Markel Group's Annual Report on Form 10-K for the year
ended December 31, 2022, including under "Business Overview,"
"Risk Factors," "Management's Discussion and Analysis of Financial
Condition and Results of Operations," "Safe Harbor and Cautionary
Statement," and "Quantitative and Qualitative Disclosures About
Market Risk," and in Markel Group's Quarterly Report on Form 10-Q
for the quarter ended June 30, 2023,
including under "Management's Discussion and Analysis of Financial
Condition and Results of Operations," "Safe Harbor and Cautionary
Statement," and "Quantitative and Qualitative Disclosures About
Market Risk". Markel Group assumes no obligation to update this
release (including any forward-looking statements) as a result of
new information, developments, or otherwise. This release speaks
only as of the date issued.
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