Risk & Compliance

RenaissanceRe Settles Shareholder Case for $13.5M

The announcement comes two weeks after the SEC said it had settled its own grievances with the insurer for $15 million.
Sarah JohnsonFebruary 21, 2007

RenaissanceRe Holdings Ltd. has agreed to pay $13 million to settle a batch of shareholder derivative lawsuits.

The insurer is not admitting liability in agreeing to settle the consolidated shareholder class-action securities litigation, the company said in a filing with the Securities and Exchange Commission on Tuesday. The company expects a portion of the settlement to be offset by insurance recoveries. The net amount was accounted for in its 2006 financial statements, according to RenaissanceRe.

Last year, several class actions were consolidated and filed on behalf of investors who purchased or acquired RenaissanceRe securities between April 2003 and July 2005. According to the company’s most recent quarterly filing, the complaint alleged that the company and five current and former officers had violated U.S. securities laws by making material misstatements and failing to state material facts about its business and financial condition in SEC filings and public statements.

Earlier this month, The Securities and Exchange Commission announced a settlement plan for RenaissanceRe of $15 million to settle civil securities fraud charges related to a sham reinsurance transaction.

The SEC said that the transaction had no economic substance and no purpose other than to smooth over and defer $26 million of earnings from 2001 to 2002 and 2003. The company had created a “cookie jar,” according to the commission, with which to store excess revenue in a good year that could be withdrawn to increase income in a future year. RenaissanceRe, which neither admitted nor denied the SEC allegations, agreed to an injunction against future violations of the securities laws.

4 Powerful Communication Strategies for Your Next Board Meeting