Two fired executives of Markel’s Bermuda reinsurance operations are suing Markel claiming the company created a false narrative alleging they violated corporate policy by having a personal relationship in order to escape having to pay them bonuses worth millions of dollars.
The fired executives, Anthony Belisle, Markel CATCo’s former chief executive officer, and Alissa Fredricks, Markel CATCo’s former chief executive officer for Bermuda, claim they violated no company policy in effect at the time. They allege the company amended its personnel policy just days before their termination but after the incentive payments had vested, in an apparent attempt to create a justification for the firings.
Belisle says he is owed $65.9 million in incentive payments while Fredricks claims she is owed $7.4 million. Both maintain the payments were due on Jan. 30, 2019.
Markel told Insurance Journal the complaints have no merit and it will defend against them.
On Jan. 18, Markel Corp. reported that Belisle and Fredricks were no longer with the company following what the firm said was the disclosure of an “undisclosed personal relationship” that the insurer said violated corporate policy.
According to the company, the relationship came to light during the course of an internal review into loss reserves recorded in late 2017 and early 2018 at Markel CATCo Investment Management and its subsidiaries. After being notified in December of U.S. and Bermuda governmental inquiries into loss reserves, Markel engaged outside counsel to conduct an internal review.
But Belisle and Fredricks claim their terminations had nothing to do with the ongoing government inquiry into loss reserves. They claim the company’s public statements and private oral comments about them have been false and defamatory.
They also accuse the company of unlawfully invading their privacy by accessing their personal and non-company communications on electronic devices.
They say they were told as late as Jan. 13 that their payments would be made on Jan. 30 as promised.
Belisle and Fredricks say they first learned they were under investigation for a personal relationship during Jan. 17 interviews with Markel attorneys from the Skadden law firm, when they were again told to turn over their personal electronic devices as they were told to do at interviews in December.
Belisle and Fredricks claim that the Markel code of conduct prior to Jan. 1, 2019 did not contain a provision prohibiting or discussing personal relationships between Markel employees, although it did have a provision related to business relationships that could give rise to conflicts of interest.
After the interviews in December, Belisle and Fredricks say Markel amended its code of conduct in January to say to state: “Having a relationship with another Employee in the Company when one Employee directly or indirectly supervises the other Employee” is a potential or actual “Conflict of Interest.”
The plaintiffs say they we never notified of the code of conduct change and were never given a chance to sign it or cure any problem.
“At no time did any relationship between Plaintiff and Mr. Belisle result in an improper conflict of interest, or create a situation that in any way interfered with or influenced Plaintiff’s contribution to Markel or Markel CATCo, or impeded her ability to perform her work objectively and effectively,” Fredrick’s complaint says.
Markel says the claims have no merit. Markel issued this statement:
“We are aware of the complaints filed by two former employees of Markel CATCo. We believe the claims in these complaints have no merit and intend to vigorously defend against them. We do not have further comment at this time.”
The two are seeking contractual damages as well as compensation and damages for emotional distress and injury to reputation.
Fredricks filed her complaint in federal court in Massachusetts; Belisle filed his in New Hampshire.
Markel’s Jan. 18 statement on the departures of the two did not indicate what, if any, role the two former employees had in the loss reserving practices being investigated.
Belisle was a founder of CATCo Investment Management, which Markel bought in 2015. He has worked for various other firms including Fidelity, Cidael, Goldman, Oxygen and Sun Financial in insurance and reinsurance-related investing for 25 years prior to CATCo.
Fredricks was named to the new role of CEO, Bermuda, in December 2017, reporting to Belisle. Before joining Markel CATCo, she worked at catastrophe modeling firm AIR Worldwide.
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