Markel Corp. appears on the way to settling with two former employees who sued over unpaid bonuses after they were dismissed for allegedly having a personal relationship that Markel said violated company policy.

The company said it has settled one of the complaints privately and it is in binding arbitration to resolve the other. The executives worked at Markel’s Bermuda reinsurance operation, CatCo.

The fired executives, Anthony Belisle, Markel CATCo’s former chief executive officer, and Alissa Fredricks, Markel CATCo’s former chief executive officer for Bermuda, sued Markel in February claiming the company created a false narrative alleging they violated corporate policy in order to escape having to pay them bonuses worth millions of dollars.

On Jan. 18, Markel reported that Belisle and Fredricks were no longer with the company because 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 the internal review that eventually found “no evidence that personnel of its CATCo unit acted in bad faith” in the setting of reserves and making related disclosures.

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.

Termination Claims

Belisle and Fredricks claimed their terminations had nothing to do with the ongoing government inquiry into loss reserves. They complained that the company’s public statements and private oral comments about them were false and defamatory.

Belisle and Fredricks claimed they violated no company policy in effect at the time and alleged 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.

They also accused the company of unlawfully invading their privacy by accessing their personal and non-company communications on electronic devices.

Belisle has claimed he was owed $65.9 million in incentive payments while Fredricks has said she was owed $7.4 million. Both maintain the payments were due on Jan. 30, 2019.

Fredricks filed her complaint in federal court in Massachusetts; Belisle filed his in New Hampshire.

At the time, Markel told Insurance Journal the complaints had no merit and it would defend against them.

This week, Markel said it had settled with Fredricks and was in arbitration with Belisle. A spokesperson for the insurer issued this statement on the status of the disputes:

“Markel Corporation has reached a mutually agreeable settlement with Alissa Fredricks, former Markel CATCo Chief Executive Officer – Bermuda, to resolve the claims that Ms. Fredericks alleged in Massachusetts federal court, and agreed to a binding arbitration with Anthony Belisle, former Markel CATCo Chief Executive Officer, to resolve the claims and counterclaims that Mr. Belisle and the Company alleged in New Hampshire federal court.”

Court records indicate the Belisle agreement was reached June 19, while the Fredricks dismissal was on July 2.

The statement added that the terms of the settlement are confidential.

Belisle was a founder of CATCo Investment Management, which Markel bought in 2015. He has worked for various other firms including Fidelity, Goldman, Oxygen and Sun Financial in insurance and reinsurance-related investing for 25 years prior to CATCo.

Fredricks was named to the role of CEO, Bermuda, in December 2017, reporting to Belisle. Before joining Markel CATCo, she worked at catastrophe modeling firm AIR Worldwide.

*This story ran previously in our sister publication Insurance Journal.