Deloitte & Touche have resigned as auditors of Bermuda-based reinsurer ESG Re.

ESG Re is currently in the process of seeking a replacement auditor.

Deloitte & Touche had recommended some adjustments for its review of the third quarter ending September 30, 2001, the fiscal year ended December 31, 201 and the quarters ended March 31, 2002 and June 30, 2002 to reflect appropriate accounting for the company's co-reinsurance contract with ACE Limited.

ESG currently estimates, based on the information available to it, that such adjustments are likely to be on the order of $500,000, although there can be no assurance that the amount might not be higher. Deloitte & Touche partner, John Johnstone, said that his firm's policy is not to comment on individual client matters.

Earlier this year ESG had to restate its results and subsequently appointed Sharyn A. Ashman, CPA, as an independent consultant to review the company's internal financial controls.

ESG has also been notified by Nasdaq that because ESG failed to comply with the timely filing requirements, its securities will be delisted from the Nasdaq Stock Market, effective at the opening of business on December 3, 2002.

ESG has requested an oral hearing before a Nasdaq Listing Qualifications Panel to appeal the decision.

The ratings on ESG Re's main subsidiaries were lowered by agency Standard & Poor's in September reflecting the company's weakened capital adequacy and volatile earnings.

S&P said it had lowered its long-term counterparty credit and insurer financial strength ratings on the main operating entities of ESG Re Ltd. to ?B' from ?BB-'.