Florida insurance regulators are probing the dealings of 17 reinsurers selling finite risk policies.

Last week Florida?s Insurance Regulation Commissioner Kevin McCarty said in a Press release that he had issued investigative subpoenas to the reinsurers requesting information related to finite reinsurance activities.

The companies on the receiving end of the subpoenas, including several Bermuda-based companies and those with offices on the Island, were: ACE Tempest Re, Acordia Re, AIG Reinsurance, Alea London Limited, Benfield Re, BIG Re, Chubb Atlantic Reinsurance Specialist Ltd., E&S Reinsurers Ltd., Guy Carpenter, Hannover Re Ltd., Hannover Ruckversicherungs-Atiengellschaft, Jardine Sayer, National Indemnity Company of the South (a subsidiary of Berkshire Hathaway), National Union Fire Insurance Company of Pittsburgh, PA (a subsidiary of AIG), Partner Reinsurance Company of the US, Swiss Reinsurance American Corporation and Transatlantic Reinsurance Company (another subsidiary of AIG).

Regulators, including New York Attorney General Eliot Spitzer and the US Securities and Exchange Commission, have been investigating insurance industry practices since early last year.

In recent months scrutiny has turned to finite risk policies including a high-profile investigation of AIG?s use of this type of reinsurance, with authorities probing whether companies might be misusing finite risk as more of a loan vehicle than a risk transfer mechanism.

Florida?s insurance regulators are one of the regulatory bodies probing AIG?s use of finite risk policies with state regulators in Tallahassee taking on the commercial insurance giant in a trial regarding a finite reinsurance deal.

The improper use of finite reinsurance can hinder the ability of insurance regulators and the public to ascertain and assess the true financial condition of an insurer, Florida authorities said last week.

Accounting regulations for finite risk policies have come under scrutiny to the point that accounting rule makers at the Financial Accounting Standards Board (FASB) earlier this month said they are looking at clarifying what counts as risk transfer and what doesn?t.

All US listed corporations are governed, as required by the US Securities and Exchange Commission (SEC), by FASB rules.

Mr. McCarty said the subpoenas were issued by Florida as a way of clarifying certain financial questions that have arisen related to reinsurance transactions.

?Consumers and regulators must be secure in the knowledge of an insurance company?s solvency.?

Finite reinsurance that does not transfer risk has contributed to the failure of several insurance companies in Florida and the United States, Florida regulators said.

The Florida Office of Insurance Regulation said it was participating in efforts by the National Association of Insurance Commissioners to develop a nationwide solution to problems created by the abuse of finite reinsurance products.