<PAGE>
As filed with the Securities and Exchange Commission on April 1, 1999
Registration No.333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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Mutual Risk Management Ltd.
(Exact name of registrant as specified in its charter)
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Bermuda N/A
(State or Other Jurisdiction of Incorporation) (I.R.S. Employer Identification
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)
Copies to:
<TABLE>
<CAPTION>
<S> <C>
Richard E. O'Brien Peter O. Clauss, Esquire
Senior 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
</TABLE>
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. [ ]
<TABLE>
<CAPTION>
Calculation of Registration Fee
- ------------------------------------------------------------------------------------------------------------------------------------
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 Shares 1,895,947 $39.15625 $74,238,175.00 $20,639
- ------------------------------------------------------------------------------------------------------------------------------------
</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 March 26, 1999.
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>
The information contained in this Prospectus is not complete and may be changed.
We may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This Prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION
DATED APRIL 1, 1999
PROSPECTUS
Mutual Risk Management Ltd.
1,895,947 Common Shares
----------------------
THE SHARES OFFERED IN THIS PROSPECTUS INVOLVE A HIGH DEGREE OF RISK.
YOU SHOULD CAREFULLY CONSIDER THE "RISK FACTORS" REFERENCED ON PAGE 3 IN
DETERMINING WHETHER TO PURCHASE THE MUTUAL RISK MANAGEMENT LTD. COMMON SHARES.
These Common Shares are being offered by certain selling
securityholders, identified in this prospectus. We issued the Common Shares, or
reserved the Common Shares for issuance, to the selling securityholders in
connection with an acquisition of IAS Holdings Ltd., H & H Reinsurance Brokers
Ltd., and Hurst Holme Insurance Company, Inc. on November 4, 1998 and an
acquisition of Captive Resources, Inc. on March 1, 1999. The selling
securityholders may sell these Common Shares from time to time on terms to be
determined at the time of sale by the selling securityholders.
Our Common Shares are listed on the New York Stock Exchange under the
symbol "MM" and the closing price of the Common Shares as reported on the New
York Composite Tape on March 26, 1999 was $39.6875 per share.
We will pay the expenses of this offering and will not receive any
proceeds from the sale of the Common Shares offered in this Prospectus.
We urge you to carefully read this Prospectus, which will describe the
specific terms of the offering, before you make your investment decision.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES OR PASSED ON THE
ADEQUACY OR ACCURACY OF THE DISCLOSURES IN THE PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
----------------------------
The date of this Prospectus is April , 1999.
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission (the
"Commission"). You may read and copy any document we file 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, our 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
website 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. We will 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 those
documents (unless those 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.
Our Common Shares trade 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.
INFORMATION INCORPORATED BY REFERENCE
The Commission allows us to "incorporate by reference" the information
we file with them, which means that we can disclose important information to you
by referring you to those documents. The information incorporated by reference
is considered to be a part of this Prospectus, and information that we file
later with the Commission will automatically update and supersede this
information. We incorporate by reference the documents listed below and any
future filings we make with the Commission under Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934:
(a) Our Annual Report on Form 10-K for the year ended December 31,
1998;
(b) Our Quarterly Report on Form 10-Q for the quarter ended March 31,
1998;
(c) Our Quarterly Report on Form 10-Q for the quarter ended June 30,
1998;
(d) Our Quarterly Report on Form 10-Q for the quarter ended September
30, 1998;
(e) The description of the Common Shares contained in our 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
(f) All documents filed by us 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.
ENFORCEMENT OF CIVIL LIABILITIES
We are organized under the laws of Bermuda and certain of our directors
and officers, and certain of the experts named in this Prospectus reside outside
of the United States. Moreover, a substantial portion of our assets are located
outside of the United States. Consequently, it may not be possible to effect
service of process on those persons or entities within the United States or to
enforce against any of them judgments of courts in the United States
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<PAGE>
based on the civil liability provisions of the federal securities laws of the
United States. We have been informed by Conyers Dill & Pearman, our 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. 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 us, or our directors or officers who reside in Bermuda, in a suit brought in
The Supreme Court of Bermuda against us 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
We provide risk management services to clients seeking alternatives to
traditional commercial insurance, especially for workers' compensation. In 1998,
this business represented approximately 57% of our 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
these loss financing methods in place of traditional insurance has become known
as "the alternative market." The alternative market 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:
o lower and more stable costs;
o greater control over the client's risk management program; and
o an increased emphasis within the client's organization on loss
prevention and loss control.
Our principal source of profits is fees received for the various
services provided to our clients in connection with our risk management
programs. In a typical program, these fees total between 11% and 13% of the
client's premium. The structure of our programs places most of the underwriting
risk with our client. For regulatory and other reasons, however, we are required
to assume a limited amount of risk. We seek to limit this risk to the minimum
level feasible. This approach to risk distinguishes us from typical
property/casualty companies which assume significant levels of underwriting risk
as part of their business. We do not seek to earn income from underwriting risk,
but rather from fees for services provided. We market our services exclusively
to retail insurance brokers and consultants representing clients.
We were incorporated in 1977. We have participated in the growth of the
alternative market since 1980 when we established our rent-a-captive program
known as the Insurance Profit Center Program (the "IPC Program"). We are
incorporated and based in Bermuda, the leading worldwide domicile for captive
insurance companies. We operate through subsidiaries in the United States,
Bermuda, Barbados, the Cayman Islands and Europe. Our principal executive
offices are located at 44 Church Street, Hamilton HM 12, Bermuda and our
telephone number is (441) 295-5688.
RISK FACTORS
You should carefully consider the risks described below regarding MRM
and the Common Shares. The risks and uncertainties described below are not the
only ones we face. There may be additional risks and uncertainties. If any of
the following risks actually occur, our business, financial condition or results
of operations could materially be affected. In such case, the trading price of
the Common Shares could decline significantly.
We face significant competition from other insurance companies.
Our products and services compete with the products and services
offered by other insurance providers both in the alternative and the traditional
insurance markets. Specifically, we compete against self-insurance plans,
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<PAGE>
captive insurance companies managed by others and a variety of risk financing
insurance policies. We face significant competition in marketing the IPC Program
from other risk management programs offered by U.S. insurance companies and from
large insurance companies and brokers. Many competitive products are offered by
companies with significantly greater resources than we have. Our competitive
position is based, among other factors, on:
o the quality of our services;
o our capital position;
o our independence from any major insurance company or broker;
and
o effective pricing.
Beginning in 1993, competition increased significantly in certain
important workers' compensation markets, particularly California, due to certain
legislative reforms. This heightened level of competition has persisted through
the current period. Increased competition has lowered premium rates throughout
the industry, 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 could adversely affect our
financial position and results of operations.
Our loss reserves may not be adequate.
We are required to maintain loss reserves. These reserves provide
capital to cover our estimated ultimate liability losses and loss adjustment
expenses for both reported and unreported claims incurred. We believe that our
reserves are adequate to meet these objectives. Nevertheless, establishment of
appropriate reserves is an inherently uncertain process and we cannot be certain
that ultimate losses will not exceed these loss reserves.
We rely on the availability of reinsurance.
A significant feature of our programs is the utilization of
reinsurance, including aggregate excess reinsurance, to transfer all or a
portion of risk not retained by the insured. We currently obtain such
reinsurance from a small number of reinsurance companies. Changing market
conditions or other factors beyond our control may, in the future, reduce or
eliminate the availability of this reinsurance. A lack of available reinsurance
could adversely affect the marketing of our programs or force us 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 we were required to pay claims
with respect to such risk and were unable to recover the amount of such claims
from the client, our financial condition and results of operations could be
adversely impacted.
We have, in the normal course of operating our 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 we 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 our foreign insurance subsidiaries (the "IPC
Companies") or by the client's captive insurance company, is generally also
supported by letters of credit. In addition, we rely 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 us
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 us.
It is our policy that our insurance company subsidiaries avoid taking
significant insurance underwriting risk. However, some risk is assumed by these
companies in connection with their limited participation in our excess
reinsurance programs. These subsidiaries could also incur losses if claims on a
policy exceeded the amount of reinsurance coverage. We believe that adequate
reserves and reinsurance have been provided on risks assumed to
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<PAGE>
date. However, the actual liability may be greater or less than the amount for
which we have provided. Any such liability will be recorded in the period in
which it becomes known.
We rely on favorable tax treatment of our programs.
The competitive position of our 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 we are deemed to be a "Passive Foreign Investment
Company," any gain realized by a U.S. person on the sale of Common Shares will
be taxed, for U.S. federal income tax purposes, at ordinary income rates, not
the capital gain rates. Also, if we are a Passive Foreign Investment Company,
when a U.S. person sells Common Shares, or receives an extraordinary dividend on
the Common Shares, the U.S. person will be required to pay an interest charge on
the income realized. If we are a Passive Foreign Investment Company, a U.S.
person may make certain elections on his or her tax return to reduce the
increased tax costs described in the prior two sentences. We do not believe we
are a Passive Foreign Investment Company now, but we cannot guarantee that we
will not become one. Whether or not we are a Passive Foreign Investment Company,
if we are classified or become classified as a "Controlled Foreign Corporation,"
a U. S. person that owns directly or indirectly 10% or more of our voting shares
will be required to include in his or her gross income his or her pro rata share
of certain income of MRM, whether or not such income is actually distributed to
such U.S. shareholder.
We are subject to extensive regulation by the states in which we operate.
Our licensed U.S. insurance subsidiaries, including Legion Insurance
Company, Legion Indemnity Ltd. and Villanova Insurance Company (collectively,
"Legion" or the "Legion Companies"), 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 "extraordinary" transactions include declaring dividends from
the insurance subsidiary to MRM 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:
o the standards of solvency which we must meet and maintain;
o the licensing of insurers and their agents;
o the approval of rates and forms and policies used;
o the nature of, and limitations on, insurers' investments;
o the form and content of periodic and other reports required to
be filed; and
o 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
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<PAGE>
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, our
financial condition and results of operations could be adversely impacted.
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, 1998, Legion Insurance Company
had two unusual values - "Agent's Balances to Surplus" and "Liabilities to
Liquid Assets." The Agent's Balance to Surplus is related to premium growth on
program business. The Liabilities to Liquid Asset value is the direct result of
receiving $75 million in premium prior to receiving policy level detail to
record the written premium. This inflates the ratio as it represents funds
awaiting application to actual policies. Legion Indemnity had one unusual value
for "Agent's Balances to Surplus" for the reasons mentioned above. Villanova
Insurance Company had no unusual values.
We depend on certain of our key employees.
We are dependent upon the ability and experience of our executive
officers and other key employees. The loss of the services of one or more of our
executive officers could have a material adverse impact on our business and
future operations.
We are subject to legal proceedings.
We are a party to various lawsuits generally arising in the normal
course of our business. We do not believe that the eventual outcome of any such
suits will have a material effect on our financial condition.
We may be adversely affected by Year 2000 computer problems.
Many currently installed computer systems and software products use
only two digits to identify a year in the date field with the assumption that
the first two digits of the year are always "19." Consequently, on January 1,
2000, computers that are not "Year 2000" compliant may read the year as 1900.
Systems that calculate, compare or sort using the incorrect date may
malfunction. As a result, during the next year, computer systems and/or software
used by many companies may need to be upgraded to comply with such "Year 2000"
requirements. Significant uncertainty exists in the software industry concerning
the potential effects associated with such compliance.
We began assessing the impact of the Year 2000 on its computer hardware
and software systems in 1997. Certain systems have been identified for
replacement before year-end 1999 due to normal business requirements. The
replacement systems will be assessed for Year 2000-related problems. Remediation
is expected to continue through the end of the 1999 third quarter at a cost that
is not expected to be material to us. Currently, we have inventoried and we are
conducting a review of all such systems. As of December 31, 1998, our historical
Year 2000
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remediation costs have not been material. Our lack of legacy systems is
fortunate, most of our applications are PC databases, some networked but most
from a programming stand point, easily corrected. We have not identified any
hardware or software computer system within the Company with a significant Year
2000 compliance problem that is expected to have a materially adverse effect on
our financial condition or results of operations. As we regularly update our
hardware and software, the pure additional cost for Year 2000 compliance should
not be material.
We continue to assess the Year 2000 compliance of our critical business
operations and products that could potentially be affected by the Year 2000
problem. The purpose of this review is to determine what impact, if any, the
Year 2000 issue may have on us and our significant customers, suppliers, and
others, and whether that impact will be material to our financial condition or
results of operations. We are in the process of contacting critical customers,
reinsurance intermediaries, managing general agents, suppliers, and others to
determine the nature and extent of their Year 2000 compliance efforts and to
assess whether their failure to resolve their own Year 2000 issues would have a
material adverse affect on our financial condition or results of operations.
Based on these assessments, we will take such further action as is appropriate
including, but not limited to, the development of contingency plans.
In addition, our financial condition or results of operations may be
materially affected by the "Year 2000" problems of third parties depending on a
variety of factors including, but not limited to:
o whether these third parties can resolve their own "Year 2000"
issues;
o whether their remediated systems remain compatible with our
systems; and
o the nature and extent to which our systems may be affected by
the third party's non-compliant systems.
Significant failures of certain essential services including, but not
limited to, the telecommunications, utility, banking, securities, and
transportation industries, due to their own "Year 2000" problems are generally
beyond our control and could have an adverse material impact on our financial
condition or results of operations.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the Common Shares
offered in this Prospectus.
SELLING SECURITYHOLDERS
The following table sets forth information with respect to the
beneficial ownership of the Common Shares 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 Registration Registered Shares Greater than 1%) (1)
- ---- -------------- ---------- ---------- ---------------------
<S> <C> <C> <C> <C>
Shalfleet Ltd. 488,508 488,508 488,508 1.17%
Monterery Limited 115,838 115,838 115,838 --
David Pickering 91,537 91,537 91,537 --
Terence Power 141,298 141,298 141,298 --
</TABLE>
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<TABLE>
<CAPTION>
Beneficial Ownership
Number of Shares After Offering
Beneficially ----------------------------------------------
Owned Prior to Number of Shares Number of Percent of Class (if
Name Registration Registered Shares Greater than 1%) (1)
- ---- -------------- ---------- ---------- ---------------------
<S> <C> <C> <C> <C>
George Rusu 518,795 518,795 518,795 1.25%
KVH Family Trust 539,971 539,971 539,971 1.30%
</TABLE>
(1) Based on the 41,645,987 issued and outstanding Common Shares as of February
26, 1999.
Shalfleet Ltd., Monterey Limited, David Pickering and Terence Power received
their Common Shares in connection with the acquisition of IAS Holdings Ltd., H &
H Reinsurance Brokers Ltd., and Hurst Holme Insurance Company that was
consummated on November 4, 1998. George Rusu and the KVH Family Trust received
their Common Shares in connection with the merger and acquisition of Captive
Resources, Inc. that was consummated on March 1, 1999.
PLAN OF DISTRIBUTION
Any and all of the Common Shares offered in this Prospectus 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
Common Shares 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 Common Shares for whom
they may act as agent. The selling securityholders and any such underwriters,
dealers or agents that participate in the distribution of the Common Shares may
be deemed to be underwriters, and any profit on the sale of Common Shares 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 of 1933. The Common Shares 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 Common Shares is made, to the extent
required, a Prospectus Supplement will be prepared by MRM based on information
provided by the selling securityholders which will set forth the number of
shares of Common Shares 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 Common Shares will be sold in such jurisdictions only through registered or
licensed brokers or dealers. In addition, in certain states the Common Shares
may not be sold unless the Common Shares has 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 Common Shares being offered hereby will be passed
upon for MRM by Messrs. Conyers Dill & Pearman of Hamilton, Bermuda. David J.
Doyle, who is an attorney with this firm, is a director of MRM.
EXPERTS
Ernst & Young, independent auditors, have audited our consolidated
financial statements and schedules included in our Annual Report on Form 10-K
for the year ended December 31, 1998, as set forth in their report, which is
incorporated by reference in this prospectus and registration statement. Our
financial statements and schedules are incorporated by reference in reliance on
Ernst & Young's report, given on their authority as experts in accounting and
auditing.
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================================================================================
You should rely only on the information incorporated by reference or provided in
this Prospectus. We have not authorized anyone else to provide you with
different information. We are not making an offer of these securities in any
state where the offer is not permitted. You should not assume that the
information in this Prospectus is accurate as any date other than the date on
the front of this Prospectus.
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TABLE OF CONTENTS
Page
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Where You Can Find More Information............................ 2
Information Incorporated by Reference.......................... 2
Enforcement of Civil Liabilities............................... 2
The Company.................................................... 3
Risk Factors................................................... 3
Use of Proceeds ............................................... 7
Selling Securityholders........................................ 7
Plan of Distribution........................................... 8
Legal Matters.................................................. 8
Experts........................................................ 8
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MUTUAL RISK MANAGEMENT LTD.
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PROSPECTUS
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April ___, 1999
================================================================================
<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 MRM are as follows:
SEC Registration Fee $20,639.00*
Legal Fees and Expenses 5,000.00
Accounting Fees and Expenses 2,000.00
Printing Expenses 0
Miscellaneous Expenses 1,000.00
Total $28,639.00**
- ------------
*Actual
**Estimated
Item 15. Indemnification of Directors and Officers.
Our Bye-Laws provide that we shall indemnify, subject to the proviso
below, every director, officer of MRM and member of a committee thereof out of
the funds of MRM 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 MRM 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 MRM 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 MRM 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 Consents and Report 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; and
(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 Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the
II-2
<PAGE>
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 April 17,1999.
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 March 17, 1999
- ------------------------------- (Principal Executive Officer)
Robert A. Mulderig
/s/John Kessock, Jr.
- ------------------------------- President, Director and Authorized March 17, 1999
John Kessock, Jr. U.S. Representative
/s/Richard G. Turner
- -------------------------------
Richard G. Turner Executive Vice President and Director March 17, 1999
/s/Glenn R. Partridge
- -------------------------------
Glenn R. Partridge Executive Vice President and Director March 17, 1999
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/James C. Kelly
- ------------------------------- Chief Financial Officer
James C. Kelly (Principal Financial and Accounting Officer) March 17, 1999
/s/Roger E. Dailey
- -------------------------------
Roger E. Dailey Director March 17, 1999
/s/David J. Doyle
- -------------------------------
David J. Doyle Director March 17, 1999
/s/Arthur E. Engel
- -------------------------------
Arthur E. Engel Director March 17, 1999
/s/Allan W. Fulkerson
- -------------------------------
Allan W. Fulkerson Director March 17, 1999
/s/William F. Galtney, Jr.
- -------------------------------
William F. Galtney, Jr. Director March 17, 1999
/s/Beverly H. Patrick
- -------------------------------
Beverly H. Patrick Director March 17, 1999
/s/Jerry S. Rosenbloom
- -------------------------------
Jerry S. Rosenbloom Director March 17, 1999
/s/Joseph D. Sargent
- -------------------------------
Joseph D. Sargent Director March 17, 1999
/s/Norman L. Rosenthal
- -------------------------------
Norman L. Rosenthal Director March 17, 1999
</TABLE>
II-5
<PAGE>
Index of 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).
II-6
<PAGE>
EXHIBIT 5
[Letterhead of Conyers Dill & Pearman, Hamilton, Bermuda]
April 1, 1999
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") Registration No. 333- 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 1,895,947 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 inquiries as to questions of law as we have deemed necessary in order
to render the opinions set forth below.
1
<PAGE>
-2-
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 1,895,947 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>
-3-
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
/s/Conyers Dill & Pearman
<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 Form S-3 dated April 1, 1999 and related
Prospectus of Mutual Risk Management Ltd. for registration of 1,895,947 shares
of its common stock, and to the incorporation by reference therein of our report
dated February 15, 1999, with respect to the consolidated financial statements
and schedules of Mutual Risk Management Ltd. included in its Annual Report on
Form 10-K for the year ended December 31, 1998 filed with the Securities and
Exchange Commission.
[GRAPHIC OMITTED]
/s/ Ernst & Young
---------------------------------
Hamilton, Bermuda
April 1, 1999
