An investment bond insurer based in Bermuda, Custodian Life Limited (“CL”), has been subjected to capricious actions by the Bermuda Monetary Authority (“BMA”) recently, and angered international policyholders who invest through these CL-issued investment bonds.
Hundreds of millions of US$ have been successfully invested over the years, and CL was a successful business, regulated by the BMA since start up. However, due to a lack of understanding re segregated assets versus segregated policies, and the underlying investment model of the policyholders, the BMA commenced a
hostile attack on CL in 2021. Although sources within the BMA acknowledged that CL had a financially sound balance sheet in August 2022, they refused to answer CL’s management demanding a re-instatement of normal business operations, and in November 2023 unilaterally sought court-appointed members of Deloittes Financial Advisory to “re-structure” CL.
Introducing IFA’s and underlying Policyholders universally have questioned why the BMA has acknowledged CL financially sound, yet unilaterally appointed re-structurers. Since November 2023, policyholders have been prevented from continuing their underlying investment policy, and introducing IFA’s have been denied payment of investment management and trail commission fees.
The re-structurers, more ominously named the “Joint Provisional Liquidators” for Restructuring Purposes Only”, have celebrated 6 months of hostile interaction with the owners of CL by billing a hefty US$ 1 million for their services. US$ 468,000 of these court-approved (again unilaterally presented for approval) costs are the legal expenses for Harneys, who’s Senior Partner worked for CL’s law firm for 6 years, then immediately took up a role as legal counsel for the JPL’s at the time of their appointment. CL’s owners and IFAs/policyholders are quite angry at this obvious conflict of interest and breach of client confidentiality, and complaints are being filed in Bermuda. Policyholders and former CL’s management are also concerned that the JPL’s may be breaching segregated accounts rules and paying themselves out of policyholder’s assets.
Equally of concern, the JPL’s have requested underlying policyholder information from CL’s former management and various IFA’s – where most refuse to give up such information and breach client confidentiality. The JPL’s have all relevant information for their interim management purposes, yet angrily demand irrelevant client information, and threaten and execute pernicious legal actions.
As a result, IFA’s and policyholders are just bemused a the expensive “cuckoo-in-the-nest” antics of the JPL’s and a regulator seemingly hell-bent on destroying a financially sound, successful business, and encroaching on client assets. Battle lines are being drawn…
