Florida Issues Subpoenas In Finite Re Probe
NU Online News Service, April 25, 4:16 p.m. EDT?Florida Insurance Regulation Commissioner Kevin McCarty has issued subpoenas to at least 17 companies for information concerning the controversial non-traditional finite reinsurance deals, his office said.[@@]
Commissioner McCarty explained that these subpoenas are aimed at clarifying "financial questions that have arisen related to reinsurance transactions."
The commissioner observed that inappropriate finite reinsurance deals that fail to transfer risk have contributed to the failure of several insurers in Florida and the United States.
Mr. McCarty said, "The improper use of finite reinsurance can hinder the ability of insurance regulators and the public to ascertain and assess the true financial condition of an insurer."
The Florida Office of Insurance Regulation describes finite reinsurance as a form of reinsurance that, through the use of various provisions, limits the amount of risk, if any, actually being transferred from the ceding insurer to the reinsurer.
The following 17 companies are among the reinsurers subpoenaed by Commissioner McCarty. A full list is not available because the investigation is still ongoing.
? ACE Tempest
? Acordia Re
? AIG Reinsurance
? Alea London Limited
? Benfield Re
? BIG Re
? Chubb Atlantic Reinsurance Specialist Ltd.
? E&S Reinsurers Ltd.
? Guy Carpenter
? Hannover Re Ltd.
? Hannover Ruckversicherungs-Atiengellschaft
? Jardine Sayer
? National Indemnity Company of the South (a subsidiary of Berkshire Hathaway)
? National Union Fire Insurance Company of Pittsburgh, PA (a subsidiary of AIG)
? Partner Reinsurance Company of the U.S.
? Swiss Reinsurance American Corporation
? Transatlantic Reinsurance Company (a subsidiary of AIG)
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