Georgia's Oxendine Probing European Reinsurers
By Michael Ha
NU Online News Service, March 28, 4:29 p.m. EST?Georgia's top insurance regulator said he is issuing subpoenas to major European reinsurers doing business in the United States to examine the possible abuse of finite reinsurance products.[@@]
Insurance Commissioner John Oxendine told National Underwriter that by tomorrow or Wednesday at the latest, his department will be issuing subpoenas to major reinsurers around the world including Lloyd's of London, Munich Re, Zurich Re and Hannover Re. The commissioner said he is also issuing subpoenas to domestic reinsurers, including Hartford Re and General Re.
"They know it's coming. I spoke to their attorneys on Friday, and subpoenas will go out by Wednesday at the latest. We will be requesting data on their various reinsurance transactions that have a finite nature," Commissioner Oxendine said.
The commissioner said his department will look at whether insurance companies serving Georgia may have distorted their financial statements using finite products sold by these reinsurers.
"We think finite reinsurance has been misused by numerous companies," the commissioner said. "We have very serious concerns about how finite reinsurance might have been used to alter the bottom line financial statements of numerous U.S. insurers."
The commissioner said it would be in the best interest of these foreign reinsurers and their clients to fully comply with the subpoenas. He explained: "If they do not honor those subpoenas, we have the authority to disallow any reinsurance transactions they have with any companies domiciled to do business in Georgia and require them to post additional capital."
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