White Rock sues Chinese bank over Vesttoo scandal

Aon’s White Rock Insurance has sued China Construction Bank for $140 million in damages stemming from losses related to the Vesttoo scandal, according to a court filing. 

The lawsuit in the New York Supreme Court was submitted by White Rock on August 27 and alleged that CCB and its related companies issued letters of credit representing “more than $2.8 billion of collateral CCB now refuses to honour”. 

The filings, first reported by Intelligent Insurer, are also against a banker claiming to represent CCB. 

According to the filings, the banker allegedly used “an official CCB email account”. These actions caused White Rock to “justifiably rely on” the banker's “representations to their detriment”. White Rock alleged that CCB “harboured a fraudster” and “failed to deter, prevent and detect a massive fraud committed through those channels”. 

Based on what White Rock described as “fully collateralised by rock-solid letters of credit” from “leading international banks”, it transferred at least $140 million in premiums to Vesttoo. The money was paid into “designated segregated accounts established under White Rock Bermuda’s corporate structure”. 

However, White Rock claimed that in July 2023 it emerged that the “issuing banks refused to honour the LOCs”. The company said this left Vesttoo with over $3 billion of “useless collateral”. 

In the filings, White Rock said that as a result of CCB’s negligence and the said banker’s fraudulent acts and omissions—“for which CCB is directly and vicariously liable—White Rock and the cedents suffered (and continue to suffer) at least hundreds of millions of dollars in damages, including the lost premium amounts, incurred claim amounts, and legal fees.”

White Rock is seeking to recover at least the cost of its $140 million in premiums paid to Vesttoo, as well as its legal fees and all other related costs and damages. 

In the filings, White Rock said: “The fraud’s shockwaves were felt throughout the global insurance marketplace, and Vesttoo quickly spiralled into Chapter 11 bankruptcy.”

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