Richard Outridge

Allied World Assurance has filed an action against two former officers of fraudulently operated Refco Capital Markets and one of Refco's insurers, XL Capital, in an attempt to recover more than $1 million in claims paid towards the legal defense

A US subsidiary of Bermuda-based Arch Capital Group Ltd. has become the latest insurer to seek to avoid having to pay out on an officers and directors liability policy regarding former officers of failed New York-based financial services group Refco.

A U. S. subsidiary of Bermuda-based XL Capital Ltd. is seeking to avoid having to pay the costs of defending former officers and directors of scandal-plagued commodities and futures broker Refco Inc. in a slew of litigation brought by parties who claim they were defrauded. XL Specialty Insurance Company, which is incorporated in Delaware and based in Hartford, Connecticut, claims an insurance policy it issued does not cover such losses because Refco was involved in fraudulent conduct before the policy became effective but hid the activity from XL.