Property and casualty insurance company Ace Ltd said last week that it will restate five years of financial results after an internal investigation into its reininsurance contracts.
The Hamilton, Bermuda-based company said that it will restate its results for the years 2000 through 2004, as well as for the first quarter of 2005, all leading to a $1 million cumulative boost of shareholders' equity.
In a statement, Ace chief executive and president Evan Greenberg said that the internal review of about 100 contracts began in response to an ongoing review by the Securities and Exchange Commission, New York Attorney General Eliot Spitzer and other state regulators. Federal investigators have said that certain reinsurance products, which are purchased by primary insurance companies to protect themselves against the risk of future liabilities, could have helped insurers boost their financials.
"We have found accounting problems on a number of transactions and we regret that," Greenberg said. "We are fixing those problems. We have also put in place strict procedures to assure that this does not happen again." He said that the internal Ace investigation should be finished by the time the restatements are made official.
Greenberg is the son of Maurice "Hank" Greenberg, the former chief executive of insurer American International Group Inc. AIG's reinsurance contacts have been a focus of the federal investigations, and Hank Greenberg left the company in March.On Monday, the SEC also delivered notices to the chief executive of RenaissanceRe Holdings, James Stanard, and a former senior vice president in the company's specialty reinsurance division, Michael Cash, saying that the commission will recommend civil enforcement action against the men for breaking federal securities laws. The Bermuda-based insurer restated its financial results from 2001 to 2003 earlier this year in connection with the government's reinsurance investigation, and announced receipt of the SEC notices in a statement.
