ACE said it has put controls in place to address the issues that led to restatements, such as having the chief executive sign off on all finite deals in which ACE is a buyer, going forward.

The Hamilton, Bermuda-based company also said other "unrelated corrections" were being made, without identifying the nature of those corrections.

ACE shareholder's equity as of Mar. 31 now stands at $9.966 billion (rather than $9.965), ACE said, noting that the cumulative impact of the finite-deal corrections was a boost to shareholders' equity of $13 million, while the other corrections lowered the figure by $12 million.

Both an independent investigation and an internal re-evaluation of accounting of more than 100 contracts flagged the eight for correction, Evan Greenberg, president and chief executive, said in a statement. Mr. Greenberg took the helm at ACE after the transactions had been booked.

The CEO noted that the reviews were undertaken in response to industrywide investigations of non-traditional products. ACE previously reported that the company and its subsidiaries had received numerous subpoenas, interrogatories and civil investigative demands in connection with the investigations.

Generally, finite reinsurance and insurance is distinguished from traditional reinsurance and insurance in that the seller's risk is more limited than it is in traditional contracts.

The Reinsurance Association of America describes finite reinsurance as "a term used to describe a broad spectrum of treaty reinsurance arrangements which provide coverage at lower margins than traditional reinsurance, in return for a lower probability of loss to the reinsurer."

"We have shared the results of our independent investigation with the authorities as those results have emerged," Mr. Greenberg said in a statement. "The governmental investigations will continue, however, and we will continue to respond to all appropriate regulatory inquiries."

He said ACE's own investigation is continuing, as well, and he expects it to be concluded when the restated statements are filed with the Securities and Exchange Commission.

ACE disclosed that seven of the eight deals involved in today's announcement did not meet the applicable risk transfer requirements of the Financial Accounting Standards Board (set forth in FAS 113). Some involved written or oral agreements that subsequently reduced or eliminated the level of anticipated risk transfer that the original accounting was based on.

Three of the deals involved ACE as a buyer, three as a seller, and two were between subsidiaries. All eight originated prior to 2002; two remain in effect.

ACE said that further restatements are possible and also left open the possibility of restatements of other items.

Based on the disclosures so far, first-quarter income will be $3 million, higher upon restatement, rising to $436 million, or $1.48 per share.

For prior years, the largest negative impact is in 2001, where a $146 million (74 cents per share) bottom-line net loss will become a $181 million net loss (88 cents per share). The largest positive income impact will move $1.42 billion in net income in 2003, or 5.01 per share, to $1.477 billion, or $5.22 per share.

Brian Meredith, an analyst with Banc of America Securities in New York, reiterated a buy rating on the stock, cautioning, however, that although the financial impact of the restatements isn't significant, "we view them as a negative because they raise the possibility of additional regulatory investigations, inquiries into management's intent in concluding these transactions and shareholder lawsuits."

"Importantly, the company appears to have entered into these transactions prior to the arrival of current CEO Evan Greenberg," he wrote in a research report this morning.