Bermuda-based insurance giant ACE Ltd. this morning said it will restate its financial results from 2000 to 2004, to correct the accounting treatment for eight finite risk transactions, a non-traditional form of insurance that regulators have been probing for its potential to mask losses.

ACE said the net impact of the restatement would be a reduction in shareholders? equity of about $1 million.

The restatement corrects the accounting treatment for eight finite risk transactions ACE both bought or sold. The contracts were made in 2002 or earlier, and two are still in effect.

Seven of the contracts did not meet risk transfer requirements to qualify for reinsurance accounting, and will now be re-accounted for under deposit accounting.

Reinsurance accounting is more favourable but a certain level of risk must be contained in the insurance policy to qualify.

ACE said it will not buy finite risk insurance or reinsurance, and strict guidelines have been put in place around its sale of the product.

"We have found accounting problems on a number of transactions and we regret that,? said chief executive Evan Greenberg. ?We are fixing those problems. We have also put in place strict procedures to assure that this does not happen again.?

Investigators have been probing the misuse of this kind of policy since late last year. The investigation has focused on a controversial finite risk contract that AIG had with Berkshire Hathaway unit General Re, to hide losses.

ACE, like many other insurance companies, has received subpoenas related to its purchase or sale of finite risk contracts.

And ACE said its restatement would not end the regulatory investigation into its use of finite risk.

The regulatory probe, led by New York Attorney General Eliot Spitzer, has now widened to include other insurers.

Also investigating the use of finite risk misuse is the US Securities and Exchange Commission, the Department of Justice and other state regulators.

ACE has received 43 investigative requests from a cross-section of US regulators as part of a broad investigation, both related to finite risk, and as part of an investigation into bid-rigging and price fixing allegations against brokers and insurers.

ACE will host a conference call to discuss the restatement at 1 p.m. today. Access details for the call can be found on the company?s website, www.acelimited.com