SEC subpoenas GE, XL Capital in finite re probe.
General Electric Co. and Bermuda-based XL Capital both said they received subpoenas from the U.S. Securities and Exchange Commission, seeking documents related to "certain loss mitigation products" GE said the SEC request is "general in nature" and both companies said they intend to cooperate fully.
"GE understands that a number of other insurance and reinsurance companies have been subpoenaed by the SEC in relation to finite risk" GE said in a statement. "One of GE's businesses, GE Insurance Solutions, has made limited use of reinsurance with finite characteristics to manage the risks of catastrophic events such as storms or hurricanes, and to protect itself and GE shareowners from the volatility that is inherent in the business."
The corporate audit staff of GE, along with the conglomerate's auditor, KPMG LLE, "have conducted numerous reviews of these agreements during the past several years as part of the company's intensive strategic reviews of Insurance Solutions' operations, and the company is confident that Insurance Solutions' risk transfer agreements have been properly structured, properly accounted for with appropriate risk transfer, and properly disclosed" the company said.
Dean Davison, a spokesman for GE Insurance Solutions, said the SEC subpoena is the first the company has received from any investigator related to the finite reinsurance issue. "We are confident that our programs are properly structured and accounted for, and have the appropriate risk transfer in place:' he said.
XL spokesman Roger Scotton said the multiline property/casualty company also intends to cooperate fully with the SEC probe.
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|Title Annotation:||Briefing: Highlights From BestWeek|
|Article Type:||Brief Article|
|Date:||Jun 1, 2005|
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