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Fitch maintains ratings of delisted ESG Re

Fitch has maintained on rating watch negative its 'B' (weak) insurer financial strength ratings of ES...

Fitch has maintained on rating watch negative its 'B' (weak) insurer financial strength ratings of ESG Re's main subsidiaries despite the delisting of ESG Re this week from the Nasdaq stock exchange in New York (Reinsurance, December 2002/January 2003, p9).
The rating company said that it had dropped its ratings of the Bermudian reinsurer's Bermudian, Irish and German companies to 'B' from 'BB-' (moderately weak) on 4 December 2002, having put the ratings on rating watch negative on 14 August 2002.
Fitch said that its actions reflected the withdrawal by Deloitte & Touche as ESG Re's auditor in November amid accounting disagreements. It said that when ESG Re was delisted on 4 February 2003 it had already factored into its ratings the expected delisting.
Fitch said that ESG Re is believed to be considering appealing against the delisting, which resulted from a failure to file Form 10-Q for the third quarter 2002 in time and a failure to file expected restatements of previous reports.
ESG Re had said late last year that the adjustments to its accounts were likely to be "in the order of $500 000, although there can be no assurance that the amount might not be higher". It reported a net loss of $1.4m in the third quarter 2002.
Fitch said that one of Deloitte & Touche's accounting disagreements with ESG Re related to a co-reinsurance contract with Ace, with Deloitte requiring restatements of ESG Re's accounts for the third quarter 2001, the full year 2001 and the the first half of 2002.
ESG appointed a new auditor, BDO International, in late December.
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