Finite reinsurance investigations lead to multiple subpoenas

In a recent move against the non-traditional insurance sector, Connecticut Attorney General Richard Blumenthal has subpoenaed insurance companies regarding their involvement in finite reinsurance transactions. The Hartford Financial Services Group Inc. disclosed to a Hartford Courant reporter that it received a subpoena on Tuesday May 24, requesting information indicating possible use or sale of finite reinsurance.Hartford says it intends to cooperate fully with the subpoena, reinforcing its February statement indicating it had no finite risk contracts.Hartford is one of several insurance companies that have recently received subpoenas from government officials actions likely initiated by New York Attorney General Eliot Spitzer’s investigations into insurers including American International Group. Finite reinsurance, defined by both commercial insurance and financing, is implemented to spread claims costs across a number of years.