Monday, Ace Ltd. in Bermuda also said it had received subpoenas from both Mr. Spitzer and the SEC for documents needed for an investigation into non-traditional or loss mitigation insurance products.

Their disclosure came as Fitch Ratings and Standard & Poor's rating agencies came out with statements describing the use of such finite risk insurance products as devices that can be used to "distort" companies' financial pictures and linking them to the investigations of brokers and insurers that are currently underway.

Fitch said it believes the "top suspect" investigators will look at "is finite risk insurance/reinsurance. Such products Fitch said have been used aggressively in a way that "potentially distorts financial reporting" and exposes buyers and sellers to risk."

S&P said if such financial engineering products "are used to smooth earnings or otherwise distort the results of an insurance company or other corporation these transactions could be considered cause for civil or criminal actions.

"Those insurance and reinsurance companies that have sold these products- as well as those organizations that brokered such products--are likely to come under investigation."

The issue S&P said is that some clients are suspected of using the finite reinsurance to transfer losses off their balance sheets or increase their capital on an accounting basis, "while the economics of these transactions would indicate that appropriate risk transfer and loss absorption have not taken place.

S&P said further that such transactions can overstate the degree of risk transfer and that, for some deals, could be, in economic reality, a loan from one entity to another.

The issues surrounding such transactions surfaced last week when Bermuda-based Platinum Underwriters Holdings scrapped a reinsurance deal with Berkshire Hathaway citing heightened concerns over accounting for insurance and reinsurance contracts.

A finding by the SEC that such a transaction is improper can be costly. Last year American International Group paid a $10 million fine for processing a similar arrangement with a firm in Indiana. The case is currently under investigation by the U.S. Justice Department.