Following the recent press article re the troubles of Bermuda investment bond insurer Custodian Life Limited (“CL”), a second case is highlighted in the US courts against the regulator Bermuda Monetary Authority (“BMA”) and two of its officers.
Newpoint Financial Group applied to purchase a controlling share in re-insurer Citadel Reinsurance Company, based in Bermuda. The BMA rejected their application “without any, much less good, cause”. Gerald Gakundi, the Director for the Insurance Supervision Department, and Susan Davis-Crockwell, Deputy Director of Enforcement for the Legal Services and Enforcement Department at the BMA, oversaw the application process.
Newpoint has filed a complaint in Californian courts for financial damages of $25 million, alleging “blatant, intentional bad faith malfeasance in mid-2022. This complaint alleges that BMA, Gerald Gakundi and Susan David-Crockwell acted with tortious and negligent interference against Newpoint’s ongoing business. Interestingly, Gakundi and Davis-Crockwell are also directly involved in the capricious measures inflicted on Custodian Life, who are also considering their legal options against the BMA. Susan David-Crockwell even stated in internal communications, also in mid-2022, that CL was financially sound, yet still initiated the appointment of liquidators to re-structure CL and take control of the company away from the experienced management.
Newpoint’s case is at the court of appeal in the USA, seeking to establish the financial damages suffered in California. That Gakundi and Davis-Crockwell are singled out as co-defendants indicates their aggressive, active roles in allegedly harming Newpoint’s business. Meanwhile, Custodian Life is preparing to re-locate its business away from Bermuda, to a more established investment insurer jurisdiction.
