The Credit Suisse Group announced that it has increased its reserve provisions recorded by its insurance subsidiary Winterthur in connection with the sale of Winterthur International to XL Insurance (Bermuda) Limited in 2001 in the amount of CHF 310 ($260 million).
The banking group said, “Winterthur Group has undertaken an extensive analysis of recently provided data relating to a three-year reserve-seasoning exposure, utilizing third-party specialists to assist in estimating the reserves required for such liabilities. On the basis of the facts known, Credit Suisse Group believes that the currently recorded provision is adequate to cover the contingencies related to this transaction.”
It added that the “amount payable to XL Insurance (Bermuda) Limited is ultimately subject to an assessment of the Seasoned Net Reserves Amount by an independent actuary, who will determine which of the estimates submitted by the two parties is closest to the amount which the independent actuary believes to be the correct reserve, and that estimate will be conclusively deemed to be the relevant Seasoned Net Reserves Amount. This process is ongoing and, consequently, the ultimate resolution of this matter could result in a further increase in the required provision for the Winterthur International sale-related contingencies, and any such increase could be significant. “
The announcement also noted that the “increase in the provision will be accounted for through the profit and loss account of Credit Suisse Group and will be reflected in the figures that it will report for the fourth quarter of 2004 on February 17, 2005.”
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