Non-Traditional Biz Probe Hits RenaissanceRe
NU Online News Service, Feb. 28, 1:58 p.m. EST?RenaissanceRe Holdings Ltd. said it is the latest firm to be subpoenaed by the Securities and Exchange Commission in its widening probe of non-traditional insurance products used by some companies to distort financial statements.[@@]
The Bermuda-based company said the subpoena also requests information about the company's previously announced determination to restate prior years' financial statements to correct accounting errors.
According to the reinsurer, the errors were discovered in connection with a review initiated by the company, and which is ongoing with the involvement of independent outside counsel.
RenaissanceRe said it will cooperate with all subpoena requests and expects to receive a similar subpoena from the New York attorney general office, which has been probing companies on the same issue.
RenaissanceRe Holdings Ltd. provides reinsurance and insurance with two segments.
Its reinsurance portfolio–which includes catastrophe reinsurance, specialty reinsurance and certain joint ventures and other structured relationships–is managed by the subsidiary Renaissance Underwriting Managers. Its other unit provides individual risk coverage, which includes primary insurance and quota-share reinsurance.
The SEC and New York attorney general's office are investigating whether the use of certain non-traditional products have served as income-smoothing devices to improperly prop up the earnings reports of companies.
Other insurance firms that have acknowledged receiving similar subpoenas include ACE Ltd., MBIA Inc., Platinum Underwriters Holdings, Swiss Re, St. Paul Travelers and Zurich Financial Services.
The SEC is also examining the sale of some non-traditional products by American International Group.
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