Collateral news

Clear Blue Insurance Group is the first external organisation that has signed up to appear in the Chapter 11 bankruptcy case of beleaguered insurtech Vesttoo, as the fronting specialist looks to protect its rights as a possible creditor.

As we suspected might happen, Vesttoo is indeed claiming ownership of the White Rock Insurance (SAC) Ltd. segregated cells or accounts that are subject to the legal action that broker Aon’s White Rock Insurance SAC vehicle alongside regulator the Bermuda Monetary Authority (BMA) began last week.

Vesttoo has stated in filings to the US bankruptcy court, that the joint action begun Friday, by broker Aon’s White Rock Insurance SAC vehicle alongside regulator the Bermuda Monetary Authority (BMA), is in violation of the automatic stay that began with its Chapter 11 filing.

Insurance and reinsurance broking giant Aon through its White Rock Insurance (SAC) Ltd. company is joining forces with the Bermuda Monetary Authority (BMA) to pursue “maximum recovery” for the re/insureds affected by the alleged fraud involving Vesttoo related segregated accounts.

Alongside its filing for Chapter 11 bankruptcy protection in the United States, under-fire insurtech Vesttoo has also filed for insolvency relief under the Israeli court system.

The China Construction Bank (CCB), which is the main bank named in relation to the fraudulent letter of credit (LOC) scandal involving insurtech Vesttoo, grew its activities significantly as an LOC issuing and confirming bank in 2022, rating agency AM Best noted.

Artemis has learned from sources that the investors behind collateralized reinsurance transactions facilitated by insurtech Vesttoo where the letters of credit (LOCs) guaranteeing the limits have been deemed invalid are China-based.

In a new statement, under-fire insurtech Vesttoo has said that it confirms the source of the fraud experienced, to do with invalid bank letters of credit (LOCs), is external to the company, with no current employees under suspicion.

The move by beleaguered insurtech Vesttoo to file for Chapter 11 bankruptcy protection has resulted in the legal action being pursued against it by broker Aon’s segregated account and transformer company White Rock Insurance SAC being halted and the temporary restraining order being removed.

In court documents filed to petition against the freezing of its assets, insurtech Vesttoo has said the move would be catastrophic for the company, with its interim CEO saying it would “destroy” Vesttoo’s business.