A New York hedge fund company is facing five criminal charges. The company, SAC Capital Advisors, is an investment manager to reinsurer S.A.C. Re and is responsible for making investments to cover an unknown amount of reinsurance the firm has underwritten. SAC Capital was indicted by a grand jury for one count of wire fraud and four counts of securities fraud.
Insurance rating firm A.M. Best said the criminal charges against SAC Capital are already negatively affecting S.A.C. Re and they may need to cut ties with SAC Capital if they want to maintain a strong insurance rating.
In a news release, A.M. Best said, "Given the current circumstances surrounding the investment manager, the original business plan may be challenged. Presently, there is uncertainty as to whether the invested assets can be managed by S.A.C. Capital as well as whether there will be ramifications concerning any affiliation with S.A.C. Capitol on the reinsurance franchise going forward."
It is unclear now as to how the entire situation will unfold or how S.A.C. Re's reinsurance company will be impacted if they distance themselves from SAC Capital. Of course, reinsurance companies insure insurance companies, so it will be interesting to see if this goes even further down the chain and impacts the individual insurance companies. More denied claims? We'll have to wait and see.
Did you file a commercial insurance claim that was denied? Contact The Voss Law Firm and we will help you fight for the money you deserve. Call us today for a free consultation at 888-614-7730.