Pa. Insurer Accuses Beechwood Re of Mismanaging $320 Million in Policyholder Reserves

NEW YORK — A Pennsylvania insurance company has accused Beechwood Re Ltd. of mismanaging $320 million in policyholder reserves by investing the money with troubled hedge fund Platinum Partners and presenting financial reports that showed falsely inflated valuations for the investments.

According to the complaint filed in the U.S. District Court for the Southern District of New York, Beechwood used Senior Health Insurance Company of Pennsylvania’s funds “to prop up and perpetuate highly speculative, distressed, and fraudulently valued investments that did not suit or benefit SHIP.”

After sustaining significant and ongoing underwriting losses, SHIP stopped writing new business in 2003 …