wrote during the 1980s.

That was the warning yesterday from the company's managing director and chief operating officer Mr. Fred Finley.

GTE Re last week posted a loss of $9.4 million for fiscal 1991, largely as a result of increasing reserves for possible environmental claims.

"I don't think we'll see any significant improvement in the firm's performance, particularly if the problems with pollution are passed onto the insurance industry,'' said Mr. Finley.

"An independent set of actuaries and our auditors, Arthur Andersen, both said they were scared about the effects of pollution on the industry. They want us to have reserves they can feel comfortable with.

"My expectation is that they will continue to be concerned about pollution until there's a lot more indication as to who's going to pay for it -- the insurance industry or industry in general.

"There's a big concern all over the world about pollution and someone's got to pay to clean it up, either industry, Governments or the insurance industry.

Nobody wants to pay the bill.'' GTE Re reinsures property and casualty risks and a small component of life insurance risks.

It is a subsidiary of GTE Corporation, which is the fourth largest publicly owned telecommunications company in the world, with revenues of $20 billion in 1991.

GTE Re's problems lie not with business written for its parent company but by non-related business it wrote between 1980 and 1989, said Mr. Finley.

The situation was so unsatisfactory that GTE Re stopped writing all non-related business in April, 1989.

"It's that business that's causing us the problems,'' he added. "Now it's a question of wait and see.

"Our profit margin will continue to be affected until it becomes clear what the rules over the cost of pollution will be.'' Mr. Fred Finley.