<PAGE>
As filed with the Securities and Exchange Commission on September 28, 1998
Registration No.333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
__________________
MUTUAL RISK MANAGEMENT LTD.
(Exact name of registrant as specified in its charter)
__________________
BERMUDA N/A
(State or Other Jurisdiction of (I.R.S. Employer Identification
Incorporation) Number)
44 CHURCH STREET
HAMILTON, BERMUDA HM 12
(441) 295-5688
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
__________________
JOHN KESSOCK, JR.
C\O COMMONWEALTH RISK SERVICES, L.P.
ONE LOGAN SQUARE
SUITE 1500
PHILADELPHIA, PA 19103
(215) 963-1600
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
COPY TO:
RICHARD E. O'BRIEN PETER O. CLAUSS, ESQUIRE
VICE PRESIDENT, GENERAL COUNSEL & SECRETARY MATTHEW A. WOODWARD, ESQUIRE
MUTUAL RISK MANAGEMENT LTD. PEPPER HAMILTON LLP
44 CHURCH STREET 3000 TWO LOGAN SQUARE
HAMILTON, BERMUDA HM 12 18TH & ARCH STREETS
(441) 295-5688 PHILADELPHIA, PA 19103
(215) 981-4000
Approximate date of commencement of proposed sale to the public: As soon
as practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following box.
[ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Title of securities to Amount to be Proposed maximum Proposed maximum Amount of
be registered registered offering price per Share /(1)/ aggregate offering price registration fee
- ----------------------- ---------- ------------------------------ ------------------------ ----------------
<S> <C> <C> <C> <C>
Common Stock 254,765 $36.344 $9,259,115.50 $2,950.00
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Computed in accordance with Rule 457 under the Securities Act of 1933
solely for purposes of calculating the registration fee based on the
average of the high and low prices of the Common Shares on the New York
Stock Exchange composite tape on September 23, 1998.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(A), MAY DETERMINE.
================================================================================
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION
DATED SEPTEMBER 28, 1998
PROSPECTUS
MUTUAL RISK MANAGEMENT LTD.
254,765 SHARES OF COMMON STOCK
______________________
All of the shares of common stock, par value $.01 per share (the "Common
Stock"), of Mutual Risk Management Ltd. (the "Company") offered hereby (the
"Securities") are being sold by certain selling securityholders. See "Selling
Securityholders." The Securities will be offered for sale from time to time on
terms to be determined at the time of sale by the Selling Securityholders. The
Company's Common Stock is listed on the New York Stock Exchange under the symbol
"MM" and the closing price of the Common Stock as reported on the New York
Composite Tape on September 23, 1998 was $36.00 per share. The Company will pay
the expenses of this offering and will not receive any proceeds from the sale of
the Securities offered hereby. See "Use of Proceeds."
No underwriter is initially being utilized in connection with this
offering. See "Plan of Distribution."
SEE "RISK FACTORS" ON PAGE 4 FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE
CONSIDERED BY
PROSPECTIVE PURCHASERS OF THE SECURITIES OFFERED HEREBY.
________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR THE PENNSYLVANIA
INSURANCE COMMISSIONER, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION,
ANY STATE SECURITIES COMMISSION OR THE PENNSYLVANIA INSURANCE
COMMISSIONER, PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
________________________
The Selling Securityholders directly, through agents designated from time
to time, or through dealers or underwriters also to be designated, may sell the
Securities from time to time on terms to be determined at the time of sale. To
the extent required, the specific Securities to be sold, the purchase price, the
public offering price, the name of any such agent, dealer or underwriter, and
any applicable commission or discount with respect to a particular offer will be
set forth in a Prospectus Supplement. The aggregate proceeds to the Selling
Securityholders from the Securities will be the purchase price of such
Securities sold less the aggregate agents' commissions and underwriters'
discounts, if any, and other expenses of issuance and distribution not borne by
the Company. Any such Prospectus Supplement will also set forth any additional
information regarding indemnification by the Company of the Selling
Securityholders or any underwriter, if any, dealer or agent against certain
liabilities, including liabilities under the Securities Act of 1933, as amended
(the "Securities Act"). The Selling Securityholders and any broker-dealers,
agents or underwriters, if any, that participate with the Selling
Securityholders in the distribution of any of the Securities may be deemed to be
"underwriters" within the meaning of the Securities Act, and any commission
received by them and any profit on the resale of the Securities purchased by
them may be deemed to be underwriting commissions or discounts under the
Securities Act. See "Plan of Distribution."
The date of this Prospectus is September 28, 1998.
NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN AS CONTAINED IN THIS
PROSPECTUS AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY SELLING
SECURITYHOLDER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY BY ANY PERSON IN ANY JURISDICTION IN WHICH IT IS
UNLAWFUL FOR SUCH PERSON TO MAKE SUCH AN OFFERING OR SOLICITATION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCE IMPLY THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY DATE
SUBSEQUENT TO THE DATE HEREOF.
<PAGE>
AVAILABLE INFORMATION
The Company has filed a Registration Statement on Form S-3 with the
Securities and Exchange Commission (the "Commission") relating to the Securities
offered hereby (the "Registration Statement"). This Prospectus does not contain
all the information set forth in the Registration Statement, certain portions of
which have been omitted pursuant to the rules and regulations of the Commission.
Reference is hereby made to the Registration Statement and to the exhibits
relating thereto for further information with respect to the Company and the
Securities offered hereby. Any statements contained herein concerning the
provisions of any document filed as an exhibit to the Registration Statement or
otherwise filed with the Commission are not necessarily complete, and in each
instance reference is made to the copy of such document so filed. Each such
statement shall be qualified in its entirety by such reference.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information concerning the
Company can be inspected and copied at the public reference facilities
maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Room
1024, Washington, D.C. 20549, and at Regional Offices of the Commission located
at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and at 7
World Trade Center, 13th Floor, New York, New York 10048. Copies of such
material can be obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. In
addition, registration statements and certain other filings made with the
Commission through its Electronic Data Gathering, Analysis and Retrieval
("EDGAR") system are publicly available through the Commission's site on the
Internet's World Wide Web, located at http://www.sec.gov. This Registration
Statement, including all exhibits thereto, has been filed with the Commission
through EDGAR. The Company hereby undertakes to provide without charge to each
person to whom a copy of this Prospectus is delivered, upon the written or oral
request of such person, a copy of any or all of the documents referred to above
which have been incorporated in this Prospectus by reference, other than
exhibits to such documents (unless such exhibits are specifically incorporated
by reference into such documents). Written or telephone requests for such copies
should be directed to the Secretary, Mutual Risk Management Ltd., 44 Church
Street, Hamilton HM 12, Bermuda (441) 295-5688.
The Common Stock trades on the New York Stock Exchange under the symbol
"MM." Such reports, proxy statements and other information may also be inspected
at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York,
New York 10004.
INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission and are
incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the year ended December
31, 1997;
(b) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998;
(c) The Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1998;
(d) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A dated May 14, 1991 as
declared effective by the Commission on June 25, 1991, including any
amendments or reports filed for the purposes of updating such
description; and
(e) All documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus
shall be deemed to be incorporated by reference and to be a part of
this Prospectus from the respective dates of filing of those
documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained
-2-
<PAGE>
herein or in any other subsequently filed document which also is or is deemed to
be incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
ENFORCEMENT OF CIVIL LIABILITIES
The Company is organized pursuant to the laws of Bermuda and certain of the
Company's directors and officers, and certain of the experts named herein reside
outside of the United States. Moreover, a substantial portion of the assets of
the Company is located outside the United States. Consequently, it may not be
possible to effect service of process on such persons or entities within the
United States or to enforce against any of them judgments of courts in the
United States predicated upon the civil liability provisions of the federal
securities laws of the United States. The Company has been informed by Conyers
Dill & Pearman, its legal advisor in Bermuda, that the United States and Bermuda
do not have a treaty providing for reciprocal recognition and enforcement of
judgments in civil and commercial matters and a final judgment for the payment
of money rendered by any federal or state court in the United States based on
civil liability, whether or not predicated solely upon the federal securities
laws, would, therefore, not be automatically enforceable in Bermuda. A Bermuda
court may impose civil liability on the Company, its directors or officers who
reside in Bermuda in a suit brought in The Supreme Court of Bermuda against the
Company or such persons with respect to a violation of federal securities law,
provided that the facts surrounding such violation would constitute or give rise
to a cause of action under Bermuda law.
THE COMPANY
Mutual Risk Management Ltd. (the "Company") provides risk management
services to clients seeking alternatives to traditional commercial insurance for
certain of their risk exposures, especially workers' compensation, which in 1997
represented approximately 57% of the Company's fee income. Risk management
involves a process of analyzing loss exposures and developing risk financing
methods to reduce exposure to loss and to control associated costs. The use of
such loss financing methods in place of traditional insurance has become known
as the alternative market and involves clients participating in a significant
amount of their loss exposure and transferring only the unpredictable excess
risk to insurers. The benefits of such alternative market techniques typically
include lower and more stable costs, greater control over the client's risk
management program and an increased emphasis within the client's organization on
loss prevention and loss control.
The Company's principal source of profits is fees received for the various
services provided to clients in connection with the Company's programs. In a
typical program, these fees total between 11% and 13% of the client's premium.
The structure of the Company's programs places most of the underwriting risk
with the Company's client. For regulatory and other reasons, however, the
Company is required to assume a limited amount of risk. The Company seeks to
limit this risk to the minimum level feasible. This approach to risk
distinguishes the Company from typical property/casualty companies which assume
significant levels of underwriting risk as part of their business. The Company
does not seek to earn income from underwriting risk, but rather from fees for
services provided. The Company markets its services exclusively to retail
insurance brokers and consultants representing clients.
The Company was incorporated in 1977 and has participated in the growth of
the alternative market since 1980 when it established its rent-a-captive program
known as the Insurance Profit Center Program (the "IPC Program"). The Company is
incorporated and based in Bermuda, the leading worldwide domicile for captive
insurance companies. The Company operates through subsidiaries in the United
States, Bermuda, Barbados, the Cayman Islands and Europe. The Company's
principal executive offices are located at 44 Church Street, Hamilton HM 12,
Bermuda, telephone (441) 295-5688.
-3-
<PAGE>
RISK FACTORS
A prospective investor should carefully consider all of the information
contained in this Prospectus in deciding whether to purchase the Securities and,
in particular, the following:
Dependence on Key Personnel. The Company is dependent upon the ability and
experience of its executive officers and other key employees. The loss of the
services of one or more of the Company's executive officers could have a
material adverse impact on the business of the Company and its future
operations.
Competition. The Company's products and services compete with the products
and services offered by other providers both in the alternative and the
traditional insurance markets, including self-insurance plans, captive insurance
companies managed by others and a variety of risk financing insurance policies.
The Company faces significant competition in marketing the IPC Program from
other risk management programs offered by U.S. insurance companies, both from
captive insurance companies for large insureds and from rent-a-captives
organized by large insurance companies and brokers. Many of these competitive
products are offered by companies with significantly greater resources than the
Company. The Company's competitive position is based, among other factors, on
the quality of its services, its capital position, its independence from any
major insurance company or broker and effective pricing. There can be no
assurance that the Company will be able to maintain its competitive position.
The inability of the Company to maintain its competitive position could
adversely impact the Company, financial condition and results of operations.
In the present soft insurance market, characterized by excess capital and
competitive pricing, it is generally easier for the Company to structure
programs because of the availability and pricing of reinsurance, but more
difficult to attract potential participants and sell programs because of
competition. In a hard market, such as that experienced during 1985-1987, it is
more difficult to structure programs due to the high price and unavailability of
reinsurance, but the Company experiences less competition in attracting clients
and selling programs.
Beginning in 1993, competition increased significantly in certain important
workers' compensation markets, particularly California, due to open ratings and
other legislative reforms, and this heightened level of competition has
persisted through the current period. This increased competition has lowered
premium rates and this in turn reduces the fee revenue generated by each
individual program. Increased competition also makes sales and renewals of
programs more difficult. A continuation of the current level of competition or
its extension into additional markets or states will adversely affect the
Company's financial position and results of operations.
Business Risks. A significant feature of the Company's programs is the
utilization of reinsurance, including aggregate excess reinsurance, to transfer
all or a portion of risk not retained by the insured. The Company currently
obtains such reinsurance from a small number of reinsurance companies. Changing
market conditions or other factors beyond the Company's control may, in the
future, reduce or eliminate the availability of this reinsurance. A lack of
available reinsurance could adversely affect the marketing of the Company's
programs or force the Company to retain all or a part of the risk which cannot
be reinsured. In the event any or all of a client's risk were not able to be
reinsured and the Company were required to pay claims with respect to such risk
and were unable to recover the amount of such claims from the client, the
Company's financial condition and results of operations could be adversely
impacted.
The Company has in the normal course of operating its programs placed
significant amounts of reinsurance for risks in excess of the client's chosen
retention with a variety of reinsurance companies. Failure of a reinsurer could
result in significant losses as the Company would remain ultimately liable for
the losses not covered by such a reinsurer. The client's chosen retention, which
is reinsured either by one of the Company's foreign insurance subsidiaries (the
"IPC Companies") or by the client's captive insurance company, is generally also
supported by letters of credit. In addition, the Company relies extensively on
letters of credit issued or confirmed by a bank which is a member of the U.S.
Federal Reserve System to secure a portion of the client's obligation to
reimburse the Company for losses on a program. The failure of a bank to honor
its letter of credit or the inability of a client to honor its uncollateralized
reimbursement obligation could adversely affect the Company.
It is the Company's policy that its insurance company subsidiaries avoid
taking significant insurance underwriting risk. However, some risk is assumed by
these companies in connection with their limited participation in the Company's
excess reinsurance programs. Such subsidiaries could also incur losses if claims
on a policy
-4-
<PAGE>
exceeded the amount of reinsurance coverage. The Company believes that adequate
reserves and reinsurance have been provided on risks assumed to date. However,
the actual liability may be greater or less than the amount provided for. Any
such liability will be recorded in the period in which it arises.
Tax Matters Affecting Participants in the IPC Program. The competitive
position of the Company's IPC Program could be materially affected by the tax
treatment of the program and competing programs. Such tax treatment has not been
clear in recent years and varies significantly with the circumstances of each
IPC Program participant as is true for competing products. A determination that
a significant portion of the IPC Program participants are not entitled to deduct
the premiums paid without a similar determination as to competing products could
adversely affect the marketability of the IPC Program.
In the event that the Company were deemed to be a "Passive Foreign
Investment Company" (a "PFIC"), the U.S. income tax due in the year a United
States person that owns any Common Stock receives certain distributions with
respect to, or disposes of, Common Stock will be increased by an interest
charge. Additionally, if the Company is classified or becomes classified as a
"Controlled Foreign Corporation" (a "CFC"), a United States person that owns
directly or indirectly 10% or more of the Company's voting shares will be
required to include in his gross income his pro rata share of certain income of
the Company, whether or not such income is actually distributed to such U.S.
shareholder.
Government Regulation. The Company's licensed U.S. insurance subsidiaries
(collectively, "Legion" or the "Legion Companies"), including Legion Insurance
Company, Legion Indemnity Ltd. and Villanova Insurance Company, are subject to
state laws regulating insurance holding companies. Under these laws, state
insurance departments may examine Legion at any time, require disclosure of
material transactions by the holding company and require prior approval of
certain "extraordinary" transactions, such as dividends from the insurance
subsidiary to the holding company, or purchases of certain amounts of the
insurance subsidiary's capital stock. These laws also generally require
approval of changes of control which are usually triggered by the direct or
indirect acquisition of 10% or more of the insurer.
State insurance departments have broad regulatory, supervisory and
administrative powers. These powers relate primarily to the standards of
solvency which must be met and maintained; the licensing of insurers and their
agents; the approval of rates and forms and policies used; the nature of, and
limitations on, insurers' investments; the form and content of periodic and
other reports required to be filed; and the establishment of reserves required
to be maintained for unearned premiums, losses and loss expenses or other
purposes.
Most states require all admitted insurance companies to participate in
their respective guaranty funds, which cover certain claims against insolvent
insurers. Solvent insurers licensed in such states are required to cover the
losses paid on behalf of insolvent insurers by the guaranty funds and are
generally subject to annual assessments in that state by the guaranty fund to
cover such losses. Certain states also require licensed insurance companies to
participate in assigned risk plans which provide coverage for workers'
compensation, automobile insurance and other lines for insureds which, for
various reasons, cannot otherwise obtain insurance in the open market. This
participation may take the form of reinsuring a portion of a pool of such
policies, or the direct issuance of policies to insureds. Generally, Legion
participates as a pool reinsurer, or assigns to other companies the direct
policy issuance obligations. The calculation of an insurer's participation in
such plans is usually based on the amount of premium for that type of coverage
that was written by the insurer on a voluntary basis in a prior year. Assigned
risk pools tend to produce losses, which result in assessments to insurers
writing the same lines on a voluntary basis. Legion also pays a fee to carriers
assuming Legion's direct policy issuance obligations. For each program Legion
writes, Legion estimates the amount of assigned risk and guaranty fund
assessments that Legion will incur as a result of having written that program.
If that estimate proves to be inadequate, Legion is entitled under its
reinsurance agreements with the IPC Companies to recover from the reinsurer the
amount of such assessments in excess of the estimate. The IPC Companies then are
entitled under the terms of agreements with clients to recover this excess from
the client. However, the IPC Companies are generally only able to collateralize
this obligation up to the amount of the estimated assessments. If Legion were
required to pay assessments and could not recover the amount of such assessments
from clients or pursuant to existing collateral arrangements, the Company's
financial condition and results of operations could be adversely impacted.
-5-
<PAGE>
The National Association of Insurance Commissioners ("NAIC") has
established the Insurance Regulatory Information System ("IRIS") to assist state
insurance departments in their regulation and oversight of insurance companies
domiciled or operating in their respective states. IRIS established a set of
twelve financial ratios and specifies "unusual values" for each ratio. Companies
reporting four or more unusual values on the IRIS ratios may expect inquiries
from individual state insurance commissioners concerning specific aspects of the
insurer's financial position. As of December 31, 1997, Legion Insurance Company
had four unusual values. Three of the unusual values, "change in net writings,"
"estimated current reserve deficiency" and "surplus aid to surplus" are related
to the substantial growth in premium related to its Program Business and the
related loss retentions. The fourth unusual value "agent's balances to surplus"
is also related to premium growth on program business and also reflects lags in
premium collection that are consistent with the nature of Program Business.
Legion Indemnity Ltd. had no unusual values. Villanova Insurance Company had one
unusual value, "change in surplus," due entirely to the change in ownership
during 1997 and the resultant change in surplus. In the event the ability of any
of the Legion Companies to conduct business in any state were revoked or
restricted as a result of any inquiries prompted by the assessment of such
"unusual values," the Company's financial condition and results of operations
could be adversely impacted.
Legal Proceedings. The Company is a party to various lawsuits generally
arising in the normal course of its business. The Company does not believe that
the eventual outcome of any such suits will have a material effect on the
Company's financial condition.
The United States Internal Revenue Service (the "IRS") has commenced an
examination of the Company's calculation of "Related Party Insurance Income"
("RPII") for 1993 and 1994. The Company calculates RPII on behalf of certain of
its clients participating in its Insurance Profit Center Program in order to
provide those clients with information used in preparing their United States
income tax returns. The Company believes that its calculation of RPII was
materially correct in both years. In addition, any adjustment made by the IRS
would affect the Company's clients and not the Company directly.
As a part of this examination the IRS has questioned whether certain
clients of the Insurance Profit Center Program properly deducted all or a
portion of the premium paid in connection with their program. In general, the
IRS has challenged the deductibility of premiums paid to captive insurance
companies in a series of rulings and cases since 1977. The Company believes that
the particular fact situations of each of its Insurance Profit Center Program
clients are sufficiently diverse such that no general determination can be made
with respect to the appropriate tax treatment of the premium paid by
participants in the Company's programs. To the Company's knowledge, none of the
small number of clients reviewed by the IRS has received notices of any
significant adjustment to their tax liability.
In the event the Company's clients were required to pay additional taxes,
penalties or interest as a result of such IRS examination and if the Company
were required to indemnify the clients for the amounts paid, the Company's
financial condition and results of operations could be adversely impacted.
Impact of Year 2000. The Company is modifying all software that is not
Year 2000 compliant. The Company is utilizing both internal and external
resources to program or replace and test the software for Year 2000
modifications. The Company anticipates that this exercise will be completed
during 1998 and will not be a material cost, due to the fact that most systems
are relatively new and were Year 2000 compliant when purchased.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Securities
offered hereby.
-6-
<PAGE>
SELLING SECURITYHOLDERS
The following table sets forth information with respect to the beneficial
ownership of the Common Stock by the Selling Securityholders as of the date of
this Prospectus.
<TABLE>
<CAPTION>
Beneficial Ownership
Number of Shares After Offering
Beneficially Owned -------------------------------
Prior to Number of Shares Number of Percent of Class (if
Name and Address Registration Registered Shares Greater than 1%)
- ---------------- ------------------ ---------- -------------------------------
<S> <C> <C> <C> <C>
Stephen M. Friedberg
c/o Research Underwriting Financial
Associates, Inc.
Franklin Centre
4240 Greenburg Pike
Pittsburgh, PA 15221-4235 24,293 24,293 24,293 --
Mark Ouimette
c/o Research Underwriting Financial
Associates, Inc.
Franklin Centre
4240 Greenburg Pike
Pittsburgh, PA 15221-4235 24,293 24,293 24,293 --
B & G Benefits, a general
partnership
Ben Blanton
P.O. Box 1689
Valdosta, GA 31603 2,132 2,132 2,132 --
H. Barron Brooks
c/o Pruden Risk Management, Inc.
301 S. Third Avenue
Chatsworth, GA 30705 26,092 26,092 26,092 --
Clay H. Chambliss
c/o Pruden Risk Management, Inc.
206 W. Crawford Street
Dalton, GA 30720 533 533 533 --
Spottswood P. Dudley
6106 Stillwater Way
McLean, VA 22101 28,225 28,225 28,225 --
Christopher A. Hayes
c/o Pruden Risk Management, Inc.
705 Allatoona Lane
Woodstock, GA 30188 533 533 533 --
HUFRUS, a general partnership
Scott E. Russell
1117 Perimeter Center West
Suite E401
Altoona, GA 30338 3,199 3,199 3,199 --
</TABLE>
-7-
<PAGE>
<TABLE>
<CAPTION>
Beneficial Ownership
Number of Shares After Offering
Beneficially Owned -------------------------------
Prior to Number of Shares Number of Percent of Class (if
Name and Address Registration Registered Shares Greater than 1%)
- ---------------- ------------------ ---------- -------------------------------
<S> <C> <C> <C> <C>
Langsfeld-McKenzie & Assoc., LLC
Phil McKenzie
3715 Northside Pkwy.
400 Northcreek #400
Atlanta, GA 30327-2813 2,132 2,132 2,132 --
Love, Douglas & Pope, Inc.
Jim Bryan
P.O. Box 80250
Atlanta, GA 30366 3,199 3,199 3,199 --
Clinton B. & Cathy R. Matthews
jointly with rights of survivorship
c/o Renaissance Mutual Insurance
1816 Fox Hollow
Liburn, GA 30247 533 533 533 --
McCart Insurance Services
2024 Beaver Ruin Rd.
P.O. Box 1973
Norcross, GA 30091 2,132 2,132 2,132 --
Jeffrey W. McCart
c/o McCart Insurance Services
2024 Beaver Ruin Rd.
Norcross, GA 30091 4,266 4,266 4,266 --
Steven T. McMullen
c/o Pruden Risk Management, Inc.
1455 LaFayette Hwy.
Rocky Face, GA 30740 533 533 533 --
Bob Miller Insurance Inc.
Bob Miller
Monroe, GA 30655 2,132 2,132 2,132 --
David E. Pennington, III
c/o Pruden Risk Management, Inc.
206 W. Crawford Street
Dalton, GA 30720 24,491 24,491 24,491 --
Tom Pool
c/o Pruden Risk Management, Inc.
206 W. Crawford Street
Dalton, GA 30720 533 533 533 --
Renaissance Holding Co., Inc.
206 W. Crawford Street
Dalton, GA 30720 4,909 4,909 4,909 --
</TABLE>
-8-
<PAGE>
<TABLE>
<CAPTION>
Beneficial Ownership
Number of Shares After Offering
Beneficially Owned -------------------------------
Prior to Number of Shares Number of Percent of Class (if
Name and Address Registration Registered Shares Greater than 1%)
- ---------------- ------------------ ---------- -------------------------------
<S> <C> <C> <C> <C>
Bill Smith, Jr.
c/o Little & Smith
P.O. Box 1089
Marietta, GA 30061 1,066 1,066 1,066 --
Diversified Insurance Industries, Inc.
c/o Professional Underwriters
Corporation
151 South Warner Road
Wayne, PA 19087 1,272 1,272 1,272 --
William A. Graham Company
c/o Professional Underwriters
Corporation
151 South Warner Road
Wayne, PA 19087 2,313 2,313 2,313 --
Robert B. Hill
c/o Professional Underwriters
Corporation
151 South Warner Road
Wayne, PA 19087 10,780 10,780 10,780 --
Matterhorn Insurance Agency, Inc.
c/o Professional Underwriters
Corporation
151 South Warner Road
Wayne, PA 19087 736 736 736 --
Michael P. Miles
c/o Professional Underwriters
Corporation
151 South Warner Road
Wayne, PA 19087 62,337 62,337 62,337 --
Edward J. O'Hara, Jr.
c/o Professional Underwriters
Corporation
151 South Warner Road
Wayne, PA 19087 1,157 1,157 1,157 --
James M. O'Hara, Jr.
c/o Professional Underwriters
Corporation
151 South Warner Road
Wayne, PA 19087 1,157 1,157 1,157 --
S. Alan Pcsolyar
c/o Professional Underwriters
Corporation
151 South Warner Road
Wayne, PA 19087 19,787 19,787 19,787 --
</TABLE>
-9-
<PAGE>
The Selling Securityholders Stephen Friedberg and Mark Ouimette received
their Securities pursuant to that certain Agreement and Plan of Merger by and
among the Company, Livery Management, Inc., Livery Management Associates, Inc.
and Messrs. Friedberg and Ouimette dated as of May 12, 1998.
The Selling Securityholders B & G Benefits, H. Barron Brooks, Clay H.
Chambliss, Spottswood P. Dudley, Christopher A. Hayes, HUFRUS, Langsfeld-
Mackenzie & Assoc., Love, Douglas and Pope, Inc., Clinton B. and Cathy R.
Matthews, McCart Insurance Services, Jeffrey W. McCart, Stephen T. McMullen, Bob
Miller Insurance Inc., David E. Pennington, III, Tom Pool, Renaissance Holding
Co., Inc., and Bill Smith Jr., received their Securities pursuant to that
certain Agreement and Plan of Merger by and among the Company, CompFirst
Aquisition Corp., HealthShare, Inc., and Messrs. Dudley, Pennington and Brooks
dated as of July 8, 1998.
The Selling Securityholders Diversified Insurance Industries, Inc., William
A. Graham Co., Robert B. Hill, Matterhorn Insurance Agency, Inc., Michael P.
Miles, Edward J. O'Hara, Jr., James M. O'Hara, Jr.,and S. Alan Pcsolyar received
the Securities pursuant to that certain Agreement and Plan of Reorganization of
Professional Underwriters, Inc. dated as of November 29, 1995.
PLAN OF DISTRIBUTION
Any and all of the Securities offered hereby may be sold from time to time
to purchasers directly by the Selling Securityholders. Alternatively, the
Selling Securityholders may from time to time offer the Securities through
brokers, underwriters, dealers or agents, who may receive compensation in the
form of underwriting discounts, concessions or commissions from the Selling
Securityholders and/or the purchasers of Securities for whom they may act as
agent. The Selling Securityholders and any such underwriters, dealers or agents
that participate in the distribution of the Securities may be deemed to be
underwriters, and any profit on the sale of Securities by them and any
discounts, commissions or concessions received by any such underwriters, dealers
or agents might be deemed to be underwriting discounts and commissions under the
Securities Act. The Securities may be sold at varying prices determined at the
time of sale or at negotiated prices. Such prices will be determined by the
Selling Securityholders, or by agreement between the Selling Securityholders and
underwriters or dealers.
At the time a particular offer of Securities is made, to the extent
required, a Prospectus Supplement will be prepared by the Company based on
information provided by the Selling Securityholders which will set forth the
number of Securities being offered and the terms of the offering, including the
name or names of any underwriters, dealers or agents, any discounts, commissions
or concessions allowed or reallowed or paid to dealers, including the proposed
selling price to the public.
In order to comply with certain states' securities laws, if applicable, the
Securities will be sold in such jurisdictions only through registered or
licensed brokers or dealers. In addition, in certain states the Securities may
not be sold unless the Securities have been registered or qualified for sale in
such state or an exemption from registration or qualification is available and
such sale is made in compliance with the exemption.
LEGAL MATTERS
The validity of the Securities being offered hereby will be passed upon for
the Company by Messrs Conyers Dill & Pearman of Hamilton, Bermuda. David J.
Doyle, who is an attorney with this firm, is a director of the Company.
EXPERTS
The consolidated financial statements of the Company and its subsidiaries
at December 31, 1997, December 31, 1996 and December 31, 1995 and for the years
then ended, which are incorporated by reference herein, have been audited by
Ernst & Young, independent auditors, as set forth in their reports thereon and
incorporated by reference herein, and are included in reliance upon such reports
given upon the authority of the firm as experts in accounting and auditing.
-10-
<PAGE>
================================================================================
No dealer, salesman or other person has been authorized to give any information
or to make any representations other than those contained in this Prospectus in
connection with the offer made hereby, and, if given or made, such information
or representations must not be relied upon as having been authorized by the
Company. This Prospectus does not constitute an offer to sell, or a solicitation
of an offer to buy, the securities offered hereby to any person in any state or
other jurisdiction in which such offer or solicitation is unlawful. Neither the
delivery of this Prospectus nor any sale made hereunder shall, under any
circumstances, imply that information contained herein is correct as of any time
subsequent to its date or that there has not been any change in the facts set
forth in this Prospectus or in the affairs of the Company since the date hereof.
___________________
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Available Information........................................................ 2
Incorporation of Certain Information by
Reference............................................................... 2
The Company.................................................................. 3
Risk Factors................................................................. 4
Use of Proceeds.............................................................. 6
Selling Securityholders...................................................... 7
Plan of Distribution......................................................... 10
Legal Matters................................................................ 10
Experts...................................................................... 10
</TABLE>
MUTUAL RISK MANAGEMENT LTD.
-------------------------
PROSPECTUS
-------------------------
September 28, 1998
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
-------------------------------------------
The estimated expenses of the issuance and distribution, all of which are
payable by the Company are as follows:
<TABLE>
<S> <C>
SEC Registration Fee $ 2,950.00
Legal Fees and Expenses 5,000.00
Accounting Fees and Expenses 2,000.00
Printing Expenses 0
Miscellaneous Expenses 1,000.00
----------
Total $10,950.00
</TABLE>
____________
* Actual
** Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
-----------------------------------------
The Company's Bye-Laws provide that the Company shall indemnify, subject to
the proviso below, every director, officer of the Company and member of a
committee thereof out of the funds of the Company against all civil liabilities,
loss, damage or expense (including but not limited to liabilities under
contract, tort and statute or any applicable foreign law or regulation and all
reasonable legal and other costs and expenses properly payable) incurred or
suffered by him as such director, officer or committee member and any person
acting as a director, officer or committee member in the reasonable belief that
he has been so appointed or elected notwithstanding any defect in such
appointment or election provided always that the indemnity contained by the Bye-
Laws shall not extend to any matter which would render it void pursuant to the
Bermuda Companies Acts. To the extent that any director, officer or member of a
committee duly constituted under the Bye-Laws is entitled to claim an indemnity
pursuant to the Bye-Laws in respect of amounts paid or discharged by him, the
relative indemnity shall take effect as an obligation of the Company to
reimburse the person making such payment or effecting such discharge. Expenses
incurred in defending a civil or criminal action, suit or proceeding may be paid
by the Company in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of a director or
officer to repay such amount, unless it shall be ultimately determined that he
is entitled to be indemnified by the Company as authorized in the Bye-Laws or
otherwise pursuant to applicable laws.
II-1
<PAGE>
ITEM 16. EXHIBITS
--------
Exhibit No. Description
- ----------- -----------
5 Opinion of Conyers Dill & Pearman.
23.1 Consent of Ernst & Young.
23.2 Consent of Conyers Dill & Pearman (contained in Exhibit 5).
24 Power of Attorney (included on the signature pages of this
Registration Statement).
_________________
ITEM 17. UNDERTAKINGS
------------
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement;
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high and of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or 15(d) of the Exchange Act that are
incorporated by reference in the Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the
II-2
<PAGE>
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
(i) (1) For purposes of determining any liability under the
Securities Act, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purposes of determining any liability under the
Securities Act, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Hamilton, Bermuda on September 28, 1998
MUTUAL RISK MANAGEMENT LTD.
By: /s/ Robert A. Mulderig
_______________________________________
Robert A. Mulderig
Chairman and Chief Executive Officer
POWER OF ATTORNEY
-----------------
KNOW ALL MEN THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Richard E. O'Brien his true and lawful attorney-in-fact
and agent, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities to sign any and all
amendments (including, without limitation, post-effective amendments) to this
Registration Statement and any registration statement filed under Rule 462 under
the Securities Act, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with authority to do and perform each and
every act and thing requisite and necessary to be done in and about the premises
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Robert A. Mulderig
- ---------------------- Chairman and Chief Executive Officer September 28, 1998
Robert A. Mulderig (Principal Executive Officer)
/s/ John Kessock, Jr.
- ---------------------- President, Director and Authorized September 28, 1998
John Kessock, Jr. U.S. Representative
/s/ Richard G. Turner
- ----------------------
Richard G. Turner Executive Vice President and Director September 28, 1998
/s/ Glenn R. Patridge
- ----------------------
Glenn R. Patridge Executive Vice President and Director September 28, 1998
</TABLE>
II-4
<PAGE>
<TABLE>
<S> <C> <C>
/s/ James C. Kelly
- --------------------------- Chief Financial Officer
James C. Kelly (Principal Financial and Accounting Officer) September 28, 1998
/s/ Roger E. Dailey
- ---------------------------
Roger E. Dailey Director September 28, 1998
/s/ David J. Doyle
- ---------------------------
David J. Doyle Director September 28, 1998
/s/ Arthur E. Engel
- ---------------------------
Arthur E. Engel Director September 28, 1998
/s/ Allan W. Fulkerson
- ---------------------------
Allan W. Fulkerson Director September 28, 1998
/s/ William F. Galtney, Jr.
- ---------------------------
William F. Galtney, Jr. Director September 28, 1998
/s/ Beverly H. Patrick
- ---------------------------
Beverly H. Patrick Director September 28, 1998
/s/ Jerry S. Rosenbloom
- ---------------------------
Jerry S. Rosenbloom Director September 28, 1998
/s/ Joseph D. Sargent
- ---------------------------
Joseph D. Sargent Director September 28, 1998
/s/ Norman L. Rosenthal
- ---------------------------
Norman L. Rosenthal Director September 28, 1998
</TABLE>
II-5
<PAGE>
EXHIBIT 5
---------
DJD/aer/311490
September 28, 1998
Securities and Exchange Commission
450 5th Street, N.W.
Judiciary Plaza
Washington Plaza
Washington, DC 20549
Dear Sirs
We have acted as Bermuda counsel for Mutual Risk Management Ltd. (the "Company")
in connection with the Registration Statement on Form S-3 (the "Registration
Statement") filed with the Securities and Exchange Commission ("Commission") by
the Company under the Securities Act of 1933 of the United States relating to
the registration of 254,765 common shares, $.01 par value each ("Common
Shares"), for resale by the Selling Securityholders (as that term is defined in
the Registration Statement).
For the purposes of giving this opinion, we have examined and relied upon the
Registration Statement. We have also reviewed a copy of the memorandum of
association and bye-laws of the Company certified as true copies thereof by the
secretary of the Company, minutes of meetings of the Company's board of
directors, minutes of shareholders' meetings and such other documents, and have
made such enquiries as to questions of law as we have deemed necessary in order
to render the opinions set forth below.
<PAGE>
We have assumed:
(i) the genuineness and authenticity of all signatures and the conformity to
the originals of all copies (whether or not certified) of all documents
examined by us and the authenticity and completeness of the originals
from which such copies were taken;
(ii) the correctness, accuracy and completeness of all factual representations
made in the Registration Statement and in the other documents which we
have reviewed; and
(iii) that there is no provision of the law of any jurisdiction, other than
Bermuda, which would have any implication in relation to the opinions
expressed herein.
We have made no investigation of and express no opinion in relation to the laws
of any jurisdiction other than Bermuda. This opinion is to be governed by and
construed in accordance with the laws of Bermuda and is limited to and is given
on the basis of the current law and practice in Bermuda.
"Non-assessability" is not a legal concept under Bermuda law, but when we
describe shares as being "non-assessable" (see paragraph 2 below) we mean with
respect to the shareholders of a company, in relation to fully paid shares of a
company and subject to any contrary provision in any agreement in writing
between that company and any one of its shareholders holding such shares but
only with respect to such shareholder, that such shareholder shall not be liable
to contribute any further share capital or otherwise pay additional money to
such company by virtue only of being a shareholder in such company.
On the basis of and subject to the foregoing, we are of the opinion that:
1. The Company has been duly incorporated and is an existing limited
liability exempted company under the laws of Bermuda, with corporate
power and corporate authority to own, lease and operate its properties
and conduct its business as described in the Registration Statement.
2. The 254,765 outstanding Common Shares to be sold by the Selling
Securityholders pursuant to the Registration Statement are legally
issued, fully paid and non-assessable, with no personal liability
attaching solely by reason of the ownership thereof.
3. The statements in the Registration Statement under the caption
"ENFORCEMENT OF CIVIL LIABILITIES" is based on current Bermuda law and
constitutes the opinion of this Firm.
<PAGE>
We hereby consent to the filing of this opinion with the Commission and as an
exhibit to the Registration Statement and to the reference to this Firm under
the captions "ENFORCEMENT OF CIVIL LIABILITIES"and "LEGAL MATTERS".
Yours faithfully
<PAGE>
EXHIBIT 23.1
------------
CONSENT OF INDEPENDENT AUDITORS
-------------------------------
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS
MUTUAL RISK MANAGEMENT LTD.
We consent to the reference to our Firm under the caption "Experts" in
the Registration Statement on From S-3 dated September 28, 1998 of Mutual Risk
Management Ltd., pertaining to the registration of 254,765 shares of its common
stock, and to the incorporation by reference to our report dated February 17,
1998, with respect to the consolidated financial statements of Mutual Risk
Management Ltd. incorporated by reference in its Annual Report (Form 10-K) for
the year ended December 31, 1997.
[GRAPHIC OMITTED]
/s/ Ernst & Young
_________________________________
Hamilton, Bermuda
September 28, 1998
