A Belgian court has rejected a demand from rebel shareholders in Fortis that last year's break-up of the Fortis group be frozen. The shareholders wanted the annulment of the dismantling of Fortis, under which the Belgian and Luxembourg banking businesses were sold to BNP Paribas, the Belgian insurance operation became AG Insurance and Fortis Insurance became an international insurance operation. The legal action sought to block the sale to BNP Paribas, which was finalized in May. The court rejected the plea. The scope of the Fortis group changed significantly following the dismantlement of the group last year. The holding companies now hold two main entities: AG Insurance (75% stake) and Fortis Insurance International, which in turn holds stakes in insurers in the UK, mainland Europe and Asia. Meanwhile, rating agency Fitch has affirmed AG Insurance's IFS rating at single A plus and its Long-Term Issuer Default Rating at single A. The IDRs of Fortis SA/NV, Fortis NV, Fortis Brussels, Fortis Utrecht and Fortis Insurance NV have been affirmed at triple B plus, but the outlook has been revised to negative from stable. Fortis said that the change in AG's outlook to negative " reflects the concentration risk of AG Insurance's investment portfolio to certain Euro-zone sovereign issuers, particularly Greece, whose sovereign IDR was downgraded by Fitch to 'BBB+' from 'A-' today". AG is understood to be monitoring closely its Greek exposure. The revision of the holding company's outlooks reflected the change in the operating entity's outlook.

Jürgen Schmitz will join the board of German insurer Ergo, the primary arm of Munich Re, from February 1 2010. He will be in charge of Western and Southern European business. Mr Schmitz, 38, joined Ergo in 2006 and was most recently Executive Director and chief financial officer at Ergo Turkey in Istanbul. Ergo board chairman Jochen Messemer, who had previously been running the Western and Southern European sector as well, said that Mr Schmitz would "put particular emphasis on developing our non-life insurance business in Southern Europe and improving the profitability of the major life insurance companies in Western Europe".

Michael McGavick, CEO at Bermuda-based XL Capital, has said that the acquittals last month of two former hedge fund managers at Bear Stearns was a good sign for the insurance industry in the field of directors' & officers' liability insurance, where it relates to the recent subprime loan disaster in the US. Speaking at a Goldman Sachs conference in New York, Mr McGavick said that "being collectively stupid is not a basis for a lawsuit", Bloomberg reported. A number of securities class action lawsuits have been filed against executives and board members of firms that lost large sums of money investing in subprime mortgages, but Mr McGavick said that he believed the Bear Stearns line of defence, where jurors decided that there was no evidence beyond a reasonable doubt that the defendants had criminal intent and conspired to mislead investors, would hold.

Bermudian energy underwriter Sideris Re, which provides the capital supporting Lloyd's syndicate 2243, is to be merged into Bermuda-based global specialty insurer Torus. Both are owned by Connecticut-based private equity firm First Reserve Corp. Sideris Re was launched in January 2008 as the vehicle backing the Lloyd's syndicate, which was run by Starr Managing Agents, with David Stewart as active underwriter. Torus was launched with $720m in backing by First Reserve in June 2008 (IIN 24, June 24 2008) as a specialty insurer also focusing on energy products. The addition of Sideris Re will increase Torus's capital by about $79m. First Reserve Corp managing director Mark McComiskey said that "the amalgamation of our insurance operations, under the management of Torus, is a logical step for all parties". Sideris had originally been envisaged as a companion syndicate to CV Starr's syndicate 1919, which writes technical property risks, direct aviation and direct marine.