Ladies and Gents if you or I were to do these things that insurance companies do regularly, a stretch in the federal pen would be a certainty so please do not try this at home. (H/T Steve, Mr CLS and unnamed others)
First let’s start at the National Underwriter to find out why Zurich is paying a substantial fine to the captured regulators at US Securities and Exchange Commission who could not ignore the “round robin” transaction:
Zurich Financial Services has paid $25 million to settle a securities fraud action by federal regulators over its use of phony reinsurance transactions to pump up its financial statements.
The Zurich, Switzerland based corporation, which admitted no guilt, said it had settled the civil case to “eliminate the burden, expense and uncertainty of potential enforcement proceedings.”
SEC’s action stemmed from company activity from 1999 through 2001 with a former Zurich subsidiary, Converium Holding AG (now known as SCOR Holding (Switzerland) AG). The company said, “None of the individuals responsible for these transactions has been employed by Zurich for several years.”
According to the SEC announcement, the company helped Converium with a fraud that involved the use of finite reinsurance transactions to improperly inflate Converium’s financial picture. Continue reading “More Evidence of Slabberator Misuse: The Farm’s “Sham Transactions”, Zurich’s Sham Reinsurance Deals”