General Electric receives federal subpoena
June 20, 2005
FAIRFIELD, Conn. -- General Electric Co. said Monday it has received a subpoena from federal prosecutors in New York seeking documents related to its insurance business.
The subpoena from the U.S. Attorney's Office for the Southern District of New York is general in nature, GE said. In May, GE said it received a similar subpoena related to a Securities and Exchange Commission investigation.
GE said it understands a number of other insurance and reinsurance companies have been subpoenaed as part of the finite-risk investigation. GE said it will cooperate fully with the subpoenas.
The subpoenas deal with finite-risk products, which are often used by insurance companies to share risk.
One GE business, GE Insurance Solutions, "has made limited use of reinsurance with finite characteristics to manage the risks of catastrophic events such as storms or hurricanes, and to protect itself and GE shareholders from the volatility that is inherent in its business," according to a news release from the company.
GE has said its corporate audit staff and outside auditor have conducted numerous reviews of the agreements and the company is confident the agreements have been properly structured, accounted for and disclosed.
GE shares closed at $36.28 Monday on the New York Stock Exchange, down 22 cents.