A June 1 hearing date has been set for a reinsurance unit of Bermuda-based White Mountains to meet with Florida regulators following allegations the unit was selling insurance in the state without a license.
According to The Royal Gazette, published in Hamilton, Bermuda, the hearing date was set after Sirius International Insurance Corp., a subsidiary of White Mountains Re, was issued a notice by the Florida Department of Insurance Regulation. Sirius is a non-admitted insurer selling expatriate medical coverage through an exclusive arrangement with Indianapolis, Indiana based managing general agency, International Medical Group.
“It [the notice] does relate to the health insurance policies written by Sirius through IMG” Steve Fass, White Mountains Re CEO told The Royal Gazette. “We are cooperating with the department. We will be providing them with any information they need, attending the hearing and possibly discussing some of their issues in advance.”
In a telephone interview last weekend, White Mountains Re general counsel Don Emeigh said Sirius has applied for permission to sell insurance in Florida but getting the license had been made conditional on certain requirements made by state regulators. White Mountains trades on the New York Stock Exchange (WTM) and has a secondary listing on the Bermuda Stock Exchange having redomiciled to Bermuda from Delaware in 1999. It sells insurance and reinsurance around the world, and has total net assets of about $19 billion.
One of the company’s largest shareholders is General Re-New England Asset Management, a division of insurance titan Warren Buffett’s Berkshire Hathaway.
Buffett sat down with New York attorney general Eliot Spitzer, representatives of the US Securities and Exchange Commission and others from the U.S. Department of Justice earlier this month to answer questions about a finite risk policy between Gen Re and the American International Group that has come under scrutiny.
Although a widening regulatory probe of insurance business practices was launched in New York early in 2004, other states have followed suit with their own investigations into suspected industry abuses.
Florida issued 17 subpoenas to reinsurers last week seeking information on finite risk transactions with scrutiny in recent months turning to this type of re/insurance policy.
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