Vesttoo news

In a new statement, a spokesperson from under-fire insurtech Vesttoo has said that know your customer (KYC) was conducted on all parties internally, as well as by external organisations that were involved in the collateralized reinsurance deals it facilitated.

Across the market, carriers are receiving requests for replacement capacity to support billions in risk, in the wake of the Vesttoo-linked collateral fraud scandal, with some set to benefit from an unexpected opportunity to deploy more limit at a time of year when books are often relatively static, Artemis has learned.

Senior Markel executives have said that any dislocation seen in the program fronting space of the insurance market should benefit the State National business, which appears a possible reference to challenges affecting the sector after the alleged collateral fraud affecting Vesttoo facilitated reinsurance deals.

Speaking yesterday, Mac Armstrong, the CEO of Palomar Insurance Holdings, the speciality California-headquartered insurer that offers largely catastrophe exposed property products, disclosed exposure via a single counterparty to the Vesttoo-linked collateral issues, but said this is “immaterial” and could actually constitute an opportunity for his firm.

Root Insurance, the auto lines focused insurtech that also bundles coverage with renters and homeowners products, has exposure to a reinsurance arrangement with links to Vesttoo, but the company’s CFO said it would feel comfortable commuting that and retaining the risk, if it needed to.

Insurance focused investment manager Conning has commented on the news about fraudulent or forged collateral linked to reinsurance deals facilitated by insurtech Vesttoo, suggesting it could add pressure to MGA’s negotiations for capacity deals.

Responding to media reports about the removal of senior co-founders and the potential dismantling of the company, the Board of under-fire insurtech Vesttoo has issued a statement saying they have “no plans to liquidate the company.”

As the saga involving insurtech Vesttoo continues to develop, it’s now been reported that the CEO and Chief Financial Engineer, two of the co-founders of the company, have been removed at the Board’s request, as internal disagreements over how to handle the fall-out of the collateral fraud issues rose to the fore.

As the story surrounding the discovery of fraudulent or forged letters of credit (LOCs) linked to collateralized reinsurance transactions facilitated by Vesttoo continues to develop, it’s become increasingly clear that any fraud that has occurred was particularly sophisticated, as numerous parties have not spotted any issues with the collateral in question.

As the audit and investigation into the discovery of fraudulent or forged letters of credit (LOCs) linked to collateralized reinsurance transactions facilitated by Vesttoo moves towards its third week, we now understand the FBI has begun its own investigation into the matter.