EX-10.28 8 dex1028.txt LETTER DATED MARCH 12, 2002 Exhibit 10.28 [LETTERHEAD OF BERMUDA MONETARY AUTHORITY] -------------------------------------------------------------------------------- Burnaby House Jeremy Cox 26 Burnaby Street Supervisor of Insurance Hamilton HM 11 Bermuda 12th March, 2002 Mutual Risk Management, Ltd. MRM House, 44 Church Street, Hamilton HM 12 Attention: Mr. Robert A. Mulderig Chairman and C.E.O. Dear Sirs, We refer to our recent meeting and subsequent telephone calls regarding the issues affecting the MRM group of companies. As discussed, the Supervisor of Insurance has deemed it appropriate in the circumstances to appoint an independent agent in addition to representatives from the Bermuda Monetary Authority and/or the Registrar of Companies (collectively to be known as "The Review Team") to review the business of the MRM group of companies ("MRM"). We understand that MRM are amenable to such a review and will allow full free and unrestricted access to the Review Team for that purpose. The terms and conditions which will govern the Review Team's conduct and appointment for the duration of this review are as follows:- 1. Definitions ----------- "Review Team" shall mean the agent or agents from KPMG Bermuda ("the Firm") appointed by the Supervisor of Insurance together with representatives from Bermuda Monetary Authority. "The Appointment" shall mean the carrying out of the functions set out in Section 2 below in accordance with the terms of this Agreement and for the purposes of providing a report to the Supervisor of Insurance on the affairs of MRM. "The Information" shall mean all documentation created and received by MRM in original, copy, faxed or electronic form as is reasonably requested by the Agent for the purpose of carrying out the Appointment. "KPMG Contact" shall mean the person on the Review Team appointed by the Firm to manage the review team and to report directly to the Supervisor of Insurance. In the first instance this person shall be Richard Lightowler. "MRM" shall mean the companies set out in the schedules attached. "MRM Contact" shall mean the person who from time to time MRM appoints as the person with whom the Review Team will liaise in respect of the carrying out of the Appointment. In the first instance this person shall be Angus Ayliffe. "Personnel" shall mean all those persons employed by MRM. "The Report" shall mean any report or reports from time to time prepared by the Review Team pertaining to MRM and in respect of this Appointment. 2. The Appointment --------------- (i) With effect from the date hereof the Review Team shall have full and free access to Information at any of MRM's offices during normal working hours for the purpose of carrying out the functions of the Appointment. Access outside normal working hours will be permitted by prior arrangement with the MRM Contact. (ii) Within 48 hours of the Appointment, the Review Team will provide to the MRM Contact a list of those persons within the Review Team who will be employed on the Appointment including the KPMG Contact. (iii) MRM will provide an office for the Review Team at MRM together with full and free access to the MRM Contact. (iv) All requests for Information by the Review Team will be made through the MRM Contact unless otherwise agreed by the MRM contact and will be acted upon expeditiously and fully. (v) All requests for access to personnel will be made through the MRM Contact and personnel shall be authorized by MRM to freely and fully answer any and all questions of the Review Team pertaining to MRM's business. The MRM Contact, or his appointed designate, will have the right to attend any interviews by the Review Team of personnel. (vi) With respect to Information pertaining to MRM which is not the property of MRM or access to persons who are not employed by MRM but who may have knowledge of MRM's business, MRM will make every effort to assist the Review Team in obtaining such information or to access such persons. 3. Costs of Review Team -------------------- MRM will pay all reasonable fees and disbursements of the Review Team in carrying out the Appointment on the following conditions: (i) The firm will be engaged on a retainer basis whereby MRM will pay to it the sum of One Hundred and fifty-thousand Bermuda Dollars (BD$150,000.00) prior to the commencement of the Appointment. This will be held by the Firm on behalf of MRM subject to MRM paying invoices of the Firm approved by the Supervisor of Insurance within 7 days of receipt of approved invoices. Should payment of such approved invoices not be rendered within 7 days of receipt by MRM the Firm will be entitled to draw the amount of the outstanding approved invoices forthwith from said retainer. (ii) The Firm will render invoices to the Supervisor of Insurance at the end of each week with a summary of the work performed, identity of the fee earner, dates of the work and details of the disbursements. (iii) The Supervisor of Insurance, upon approval of the invoice, shall provide copies of those invoices submitted by the Firm within 7 days of receipt (marked as approved) to the MRM Contact for payment. Payment will be made by MRM within 7 days of receipt of the approved invoice subject to the provisions of paragraph (iv) below. (iv) If MRM has any questions pertaining to the invoices submitted it shall have the right to discuss these questions with the Firm directly in an effort to resolve them. If no resolution can be reached, MRM will submit its questions to the Supervisor of Insurance for resolution with the Firm and will agree to abide by the decision of the Supervisor of Insurance regarding the ultimate liability under the invoice. MRM, the Firm and the Supervisor of Insurance will resolve all such questions within 7 days of a dispute arising pertaining to the invoice and failure to do so shall entitle the Firm to draw such payment against the retainer held by the Firm. (v) On completion of the Appointment, as confirmed in writing by the Supervisor of Insurance to MRM and the Firm, the Firm will repay the balance of any retainer held by the Firm to MRM within 14 days. 4. Operations of MRM for duration of Appointment --------------------------------------------- (i) The Appointment shall not and is not intended to interfere, restrict or otherwise impact on the normal business operations of MRM. MRM will continue to operate its business in the normal course, including but not limited to any steps it is advised or believes it should take with respect to the reorganization or sale of any or all parts of its business or assets. (ii) MRM will continue to report to the regulatory authorities in Bermuda as required and to do any and all other acts and take such steps as required by Bermuda law to ensure compliance with the Companies Act 1981, the Insurance Act 1978 and any other legislation pertaining to the conduct of its business. 5. Confidentiality --------------- (i) The disclosure of all Reports and Information obtained as a result of this review shall be subject to the provisions of the Insurance Act 1978 as amended by the Insurance Amendment Act 2001. The Supervisor of Insurance will keep any and all Reports and Information confidential and access to Reports and Information will be limited to those persons employed by the Review Team and appropriate personnel within the Authority. The Information and Reports received in connection with the Appointment will not be given to any third parties, other than to those permitted by law. (ii) Each member of the Review team will be bound by the terms of S.31 of the Bermuda Monetary Authority Act 1969. 6. Duration of Appointment ----------------------- The Appointment will be for such period as is deemed necessary for the completion of the Appointment by the Review Team or as shall be determined by the Supervisor of Insurance. Please sign the enclosed copy of this letter if you agree to these terms and we will so instruct our agent. Yours faithfully /s/ Cheryl-Ann Lister Cheryl-Ann Lister (Mrs.) Chairman & CEO for Supervisor of Insurance /s/ Robert A. Mulderig For and on behalf of MRM Group of Companies MRM Companies
Company Name Ownership Domicile Percentage ------------------------------------------------------------------------------------------------- Mutual Risk Management Ltd. N/A Bermuda Alpine Meadow Ltd. 100% Bermuda Asset Risk Managers Ltd. 100% Bermuda Buckeye Reinsurance Co. Ltd. 100% Bermuda Capital Mgt. Of Bermuda 100% Bermuda CF&M Insurance Managers 100% Bermuda Chesapeake Insurance Co. 100% Bermuda FICL 100% Bermuda GAIL 25% Bermuda H&H Mgmt. Services Ltd. 100% Bermuda H&H Park International 100% Bermuda Hemisphere Holdings Ltd. 100% Bermuda Hemisphere Mgmt. Ltd. 100% Bermuda Hemisphere Trust Co. Ltd. 40% Bermuda Hurst Holme Insurance Co. 100% Bermuda IAS (Barbados) Ltd. 100% Bermuda International Advisory Services Ltd. 100% Bermuda IPC Mutual Holdings Ltd. 100% Bermuda Jedims Ltd. 100% Bermuda Laguna Reinsurance Co. Ltd. 100% Bermuda MRM (Holdings) Ltd. 100% Bermuda MRM Financial Services Ltd. 100% Bermuda MRM Global Captive Group Ltd. 100% Bermuda MRM Life (US) Ltd. 100% Bermuda MRM Life Ltd. 100% Bermuda MRM Private Clients 100% Bermuda MRM Securities Ltd. 100% Bermuda MRM Services Ltd. 100% Bermuda MRM Specialty Brokerage Ltd. 100% Bermuda Mutual Finance Ltd. 100% Bermuda Mutual Holdings Ltd. 100% Bermuda Mutual Indemnity (Bermuda) Ltd. 100% Bermuda Mutual Indemnity (US) Ltd. 100% Bermuda Mutual Indemnity Ltd. 100% Bermuda Mutual Risk Captive Group Ltd. 100% Bermuda Premium Securities (Bermuda) (SAC) Limited 100% Bermuda Premium Securities Ltd. 100% Bermuda Shoreline Mutual (Bermuda) Ltd. 100% Bermuda Shoreline Mutual Mgt. (Bermuda) Ltd. 100% Bermuda SPDA 100% Bermuda Valmet (Bermuda) Limited 100% Bermuda
On request MRM will also provide access to information on its non Bermuda subsidiaries