RenRe, PartnerRe Subpoenaed In MBIA Probe
By Michael Ha
NU Online News Service, April 11, 4:18 p.m. EST?Bermuda-based RenaissanceRe Holdings and PartnerRe said they have received subpoenas from regulators regarding Channel Re, a Bermuda company part-owned by the two reinsurers which also did business with bond insurer MBIA, [@@]
RenaissanceRe Holdings and PartnerRe said in separate company statements that they have received subpoenas from the U.S. Securities and Exchange Commission and the New York attorney general's office regarding Channel Re.
PartnerRe said it holds a 20 percent equity shareholding in Channel Re, while RenaissanceRe said it is an investor in the company.
Alain Karaoglan, insurance analyst at Deutsche Bank Securities, said RenaissanceRe and PartnerRe appear to have been subpoenaed because they are part-owners of Channel Re, which had certain business ties with bond insurer MBIA.
Last month, the Armonk, N.Y.-based MBIA restated its earnings going back to 1998 because of its finite reinsurance agreements with Converium Re. The seven-year financial restatement cut MBIA's stated income by $54 million overall. MBIA's accounting has also been scrutinized by various regulators.
"The subpoenas are related to MBIA investigations. I don't think it's a big issue. I am not concerned about it at all," Mr. Karaoglan told National Underwriter. He said that while Channel Re has received certain business from MBIA, those deals were fully disclosed and they appear to be legitimate transactions.
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