The Utah Insurance Department and A-Cap Group have agreed to pause their legal proceedings and enter mediation over matters connected to 777 Re Ltd., the former Bermuda-based reinsurer at the center of an ongoing regulatory and financial investigation.
The agreement, disclosed in a press release issued by A-Cap, follows a series of actions involving 777 Re and its parent company, 777 Partners. The mediation includes three insurers regulated by A-Cap: Sentinel Security Life Insurance Co., Haymarket Insurance Co., and Jazz Reinsurance Co.
In October, the Bermuda Monetary Authority (BMA) officially canceled the insurance registration of 777 Re Ltd. The BMA said that its decision followed supervisory concerns that began in late 2023, culminating in regulatory action to protect policyholders and preserve the integrity of Bermuda's insurance sector. 777 Re had been licensed as a Class E insurer, a designation reserved for reinsurers with long-term business.
The Utah Insurance Department previously directed the A-Cap-affiliated insurers to suspend new business activity. The order cited what regulators described as hazardous financial conditions stemming from the companies’ exposure to 777 Partners and its affiliates.
A-Cap, headquartered in New York, has faced regulatory scrutiny over its investment relationships with 777 Partners. According to a previous report from the FT, A-Cap’s insurance entities extended funding to several ventures associated with 777 Partners, including the Canadian low-cost airline Flair and a number of professional sports teams.
The Utah-based insurers had ceded approximately $1.7 billion in reserves to 777 Re, as noted in the state’s rehabilitation petition.
The financial distress of 777 Re prompted credit rating agency AM Best to withdraw its Financial Strength Rating of C- (Weak) and Long-Term Issuer Credit Rating of “ccc-” (Weak) for the company in June last year.
In response to the broader implications of the 777 Re case, the BMA has intensified its oversight of connected-party transactions. It has updated its regulatory framework to require insurers to obtain prior approval before making new investments in affiliated entities.
777 Partners, the Miami-based private investment firm that owns 777 Re, has also come under increased scrutiny amid multiple failed ventures and legal challenges. The company’s attempt to acquire English football club Everton collapsed after facing financing delays and regulatory concerns.
It also faced lawsuits alleging civil fraud, which the firm has denied. Its portfolio includes interests in sports teams and airlines across North America and Europe, some of which have struggled financially.
David Burt, Bermuda’s premier and minister of finance, previously commented on the situation, noting that the jurisdiction’s life reinsurance market remains subject to close supervision.
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