Japanese Insurers Receive Fortress Re Payments

January 5, 2004

Three Japanese insurance companies have received at least part of the $1.12 arbitration award levied against Fortress Re (See IJ Website Dec, 23), a No. Carolina-based reinsurance company, which collapsed following Sept. 11 related losses.

Aioi Insurance Co, Sompo Japan Insurance Inc. and Taisei Reinsurance Co sued Fortress, claiming that the company’s directors and officers had misrepresented the reinsurer’s financial strength, and had engaged in deceptive accounting practices.

Aioi boosted its profit forecast by 35.4 percent to 32.5 billion yen ($303.7 million), and indicated it had already received $127.2 million. Sompo and Tasei have so far received $68.9 million each. Sompo had previously indicated that it wasn’t sure any amounts would actually be recovered, and accordingly has not altered its profit forecasts.

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