TORONTO (Reuters) ? Shares of Fairfax Financial Holdings Ltd. fell hard yesterday after the company said it and its chief executive officer had been subpoenaed by US regulators in connection with remarks made last month on finite insurance contracts.

Fairfax shares slumped nearly 17 percent, or C$25.99, to C$126.48 on the Toronto Stock Exchange at midday. They had fallen as low as C$120, their lowest since May, 2003.

The Toronto-based property, casualty and life insurer said the company and chief executive Prem Watsa had received subpoenas from the US Securities and Exchange Commission related to an answer to a question on an investor conference call on February 10.

Last September, Fairfax was subpoenaed by the SEC to hand over documents related to any non-traditional insurance or reinsurance product transactions. The regulator later also asked for documents related to the company?s securities and trading activity.

Finite, or non-traditional reinsurance products, have been the subject of an industry-wide probe by US regulators, who see them as a way to take risky loans off companies? books and make earnings look better.

Fairfax said it is cooperating with the SEC, and that it had provided documents and senior officers had attended interviews conducted by the regulator and the US Attorney?s office.

Fairfax said the SEC has also issued subpoenas to the company?s independent auditors and a shareholder.

It added it was possible that other enforcement or government agencies may ask to review the company?s documents or other parties that Fairfax has relationships with.

?These inquiries are ongoing and the company continues to comply with requests for information from the SEC and the US Attorney?s office,? the company said in a statement.

Last week Fairfax said it will delay its 2005 annual report and shareholders meeting while it waits for its majority-owned Odyssey Re Holdings Corp. to complete its own annual report.

Fairfax said the subpoena update had been intended to be included in Fairfax?s annual report, but due to the delay, it was disclosed yesterday to coincide with a 10-K filing of unit Crum & Forster Holdings Corp.

Earlier yesterday, Odyssey said the US Attorney?s Office is participating in an investigation of a transaction by Fairfax and its affiliates.