CNA: $600 Million Due From Gerling Group
NU Online News Service, March 13, 2:25 p.m. EST?CNA Financial Corporation said its property-casualty insurance subsidiaries have some $600 million of reinsurance receivables due from Gerling Versicherungs-Beteiligungs, a Cologne, Germany-based holding company for a group of insurance and reinsurance carriers.
Chicago-based CNA noted that of this amount, all but $170 million is supported by collateral in the form of letters of credit, trust agreements, funds' withheld balances and other payable offsets.
The uncollateralized amount, the insurer said, is mostly due from Gerling's New York-domiciled insurance subsidiaries. CNA said it continues to bill reinsured losses and collect payments from Gerling in the normal course.
Gerling has been treading rough waters recently. Earlier this month, its Gerling Global Reinsurance Corporation of America in New York saw its ratings by Palm Beach Gardens, Fla.-based Weiss Ratings Inc. fall by more than one notch. The company was downgraded to "C" (Fair) from "B-minus" (Good) due to a significant decline in capital since year-end 2001, according to Weiss Ratings.
Last year, Gerling Global Re stopped underwriting new business, and Gerling has moved to sell the unit to a group of investors. German financial regulators, however, blocked the sale in February, partly over some concerns that claims would not be paid.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.