General Electric reported on Monday that it received a subpoena from the New York Regional Office of the Securities & Exchange Commission on Friday, April 29. The subpoena, which seeks documents relating to “certain loss mitigation insurance products,” is general in nature. GE said it will cooperate fully with the SEC.
GE said it understands that a number of other insurance and reinsurance companies have been subpoenaed by the SEC in relation to finite risk. One of GE’s businesses, GE Insurance Solutions, has reportedly 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 shareowners from the volatility that is inherent in its business.
GE, its corporate audit staff and its outside auditor, KPMG LLP, have reportedly conducted numerous reviews of these agreements during the past several years as part of the company’s intensive strategic reviews of Insurance Solutions’ operations, and the company said it is confident that Insurance Solutions’ risk transfer agreements have been properly structured, properly accounted for with appropriate risk transfer, and properly disclosed.