Embattled Renaissance Re Holdings Ltd. chief James Stanard has resigned, but proclaimed his innocence in any wrongdoing surrounding a federal accounting investigation.
The Bermuda-based company's board of directors yesterday said Mr. Stanard resigned his position as chairman and chief executive officer in light of the ongoing probe into the restatement of the company's financial results earlier this year.
In a statement issued by his attorney, James Mathias of the Baltimore-based DLA Piper Rudnick Gray Cary U.S. LLP, Mr. Stanard said he has cooperated fully with the Securities and Exchange Commission investigation and regrets the embarrassment caused by the restatement.
"Mr. Stanard, however, strongly disagrees with any suggestion that he was aware of, or intended that RenRe engage in, a transaction that did not satisfy the applicable accounting standards, or that he otherwise engaged in or conducted fraudulent conduct," the statement said.
In July, Mr. Stanard received a notice from the SEC indicating he may be accused of wrongdoing in connection with accounting errors that forced a restatement of the company's financial results earlier in the year.
Company shares fell 13 percent before trading began today, but it remains unclear what effect the resignation will have long term.
Bank of America property-casualty analyst Brian Meredith said that Mr. Stanard's departure was a loss, "but we believe the company's franchise runs deeper than its chief executive."
The board appointed RenRe co-founder Neill Currie to replace Mr. Stanard. He returned to the firm after an absence of several years.
RenRe also announced that in the third quarter the company suffered a net loss of $322 million, compared with a net loss of $348 million in the fourth quarter of 2004.
The company recorded hurricane losses of $572.6 million in the quarter.
Mr. Meredith said the loss of $4.63 per share was above his expected loss of $4.09 per share primarily due to hurricane losses that came in above expectations.
Earlier this year, RenRe was one of several companies caught up in questions from New York State Attorney General Eliot Spitzer and the SEC over the use of finite reinsurance. What is in question is whether the reinsurance is a legitimate use of risk transfer or merely a loan agreement used to smooth quarterly earnings.
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