SEC, Spitzer Subpoena Axa Re In Finite Re Probe
National Underwriter News
April 14, 2005
Axa Re, a midsized reinsurance unit of French insurance giant Axa SA, disclosed that it has been subpoenaed by U.S. regulators over its finite reinsurance transactions with U.S. bond insurer MBIA.
The Paris-based Axa Re said it has received subpoenas from two U.S. regulatory groups: the New York Attorney General's Office and the U.S. Securities and Exchange Commission.
Axa said U.S. authorities are seeking information on Axa Re's 1998 reinsurance deals with bond insurer MBIA that related to the bankruptcy of a Pennsylvania hospital group as well as on other non-traditional products.
Regulators are examining MBIA and its use of finite reinsurance which may have covered up holes in its financial picture. MBIA allegedly used non-traditional products from Axa Re, as well as from Converium Holding AG and Munich Re, to smooth earnings following the bankruptcy of Allegheny Health, Education and Research Foundation, whose bonds MBIA had insured.
"Axa Re intends to cooperate fully with the New York Attorney General's Office and the SEC," the company said.
Axa Re joins a number of other European reinsures already subpoenaed by U.S. authorities over finite reinsurance. Earlier this month, Georgia Insurance Commissioner John Oxendine issued subpoenas to major reinsurers around the world, including representatives of Lloyd's of London, Munich Re, Zurich Re and Hannover Re.