SAN FRANCISCO (Dow Jones/AP) ? Shares of Scottish Re Group Ltd. soared yesterday, after the life reinsurer said it isn't facing near-term solvency or liquidity problems.

The Bermuda-based company also suggested that ratings downgrades won't take as big a bite out of its business ? as investors had feared on Monday.

Shares of Scottish Re leaped $2.85, or 71 percent, to close at $6.84 on the New York Stock Exchange. Tuesday's strongest level, on very heavy volume, was $7.19. On a 52-week basis, there was a high of $25.99 on December 5 and a low of $2.95 on Monday.

Tuesday's trading volume of about 37 million shares far exceeded the average daily level of approximately 1 million shares.

On Monday, the Scottish Re stock had plunged 75 percent, reaching the 52-week low of $2.95, after the company's chief executive resigned in the wake of an unexpected second-quarter loss.

The firm said it also suspended its dividend and hired investment banks Goldman Sachs and Bear Stearns to consider strategic alternatives and track down extra capital.

A.M. Best and other rating agencies downgraded the company's ratings Monday to below A-minus, a level that is considered important for reinsurers to attract and retain business.

The downgrades sparked concern that Scottish Re could break some clauses in its debt agreements. There also are ratings triggers in some reinsurance contracts that allow customers to cancel policies and take back premiums.

The life reinsurance and annuity company tried to calm many of these concerns in a statement yesterday morning.

"We do not face any near-term liquidity or solvency issues," the company said. "We are not in violation of any of the covenants associated with our outstanding debt and convertible securities or backup liquidity lines."

Scottish Re also said it has tried to negotiate new reinsurance business without ratings triggers during the past three years. The company also said it has attempted to get ratings triggers taken out of old contracts.

While reinsurance agreements differ, ratings triggers, when they are included, allow customers to cancel policies if ratings fall below certain levels and take back or "recapture" the premiums they passed on to the reinsurer.

If a large number of ratings triggers happen at once, reinsurers can face lots of recaptures that drain them of capital, like a run on a bank.

"Any treaties with rating triggers represent a de minimus amount of our in-force business," Scottish Re said.