ILS Insurtech Takes Swift Action in Response to Alleged Fraud
After news reports of potential fraud involving letters of credit for reinsurance transactions it was involved in, Vesttoo Ltd., an online commercial reinsurance intermediary, announced Thursday it is looking into “inconsistencies” within the company.
Israel-based company with headquarters in Tel Aviv In a statement, Vesttoo, which acts as a matchmaker between cedents and investors in noncatastrophe insurance linked securities and collateralized reinsurance coverage, revealed that it had found problems with the collateral banks had provided for some of the modelled transactions involving insurers and investors.
According to the company’s statement, “a comprehensive third-party audit is being conducted to ensure our due diligence processes continue to be robust.”
Vesttoo is attempting to provide “full transparency” to the relevant organisations and “find alternative solutions as soon as possible,” according to the statement.
Vesttoo clarified that the letters of credit at issue were not issued by Vesttoo but rather by renowned international institutions and that the collateral in question related to letters of credit supplied under certain specific transactions.
According to an article published by the Israeli technology news site CTech last week, several key executives have departed Vesttoo after it was revealed that investors had issued bogus letters of credit to insurers involved in some of the transactions.
According to a source with knowledge of the situation, numerous executives have departed Vesttoo without being fired.
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