Bermuda-based Annuity & Life Re, which reinsures life insurers in the US and Canada, reported on Tuesday that it would restate its 2000 and 2001 financial results.

This is in part due to accounting changes for embedded derivatives in certain annuity reinsurance contracts.

The company's annuity line covers the risks of insurance companies who sell annuities to individuals, guaranteeing them periodic payments in exchange for a fixed amount of money, which they invest.

The principal is guaranteed, so insurers and their reinsurers must pay up if the investments do not perform.

The company, which is under review by the United States Securities and Exchange Commission (SEC) for its accounting practices, said it also plans to restate earnings for the quarters

ended March 31 and June 30, 2002.

The company said it will reclassify $19.5 million of a $33 million charge taken in the fourth quarter of 2001, and allocate portions of the charge across previous quarters.

Annuity & Life Re will also recognise $2.8 million of minimum interest guarantee payments made in 2000 that were previously unaccounted for. The payments are expected to reduce the company's 2000 net income by no more than 3 percent.

For the quarter ended September 30, 2002, the company said it anticipates reporting a loss of no more than $20 million.