General Re Gets SEC Letter
By Mark E. Ruquet
NU Online News Service, Dec. 30, 2:29 p.m. EST?General Re Corporation said it has received a letter of inquiry from the U.S. Securities and Exchange Commission relating to non-traditional or loss mitigation insurance products.
General Re, a subsidiary of Berkshire Hathaway, Inc., based in Omaha, Neb., said the SEC has asked the company to provide both documentation and information about the products. The request applies to General Re and all its affiliates, the company said.
General Re and Berkshire Hathaway said they will cooperate fully with the request.
The move comes in the midst of investigations by both the SEC and New York Attorney General Eliot Spitzer who are looking into the role the non-traditional insurance play in possibly skewing financial results of corporations that purchase the coverage.
General Re joins St. Paul Travelers in St. Paul, Minn.; Ace Ltd. and Platinum Underwriters Holdings, both in Bermuda; Zurich Financial Services and Swiss Re, both based in Zurich, Switzerland; and MBIA in Armonk, N.Y., who have received requests for information into the product.
Some corporations have allegedly used the products to gloss over poor financial performance. Earlier this month, American International Group, based in New York, said it would pay $126 million in penalties and fees for allegedly helping two companies distort their financial statements. AIG helped the Pittsburgh-based PNC bank take $762 million in volatile, troubled or underperforming loans and venture capital investments off its financial statements by moving them to special entities it created.
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