Harry Markopolos — a forensic accounting analyst who warned the U.S. Securities and Exchange Commission, early on, that something was wrong Bernie Madoff’s financial statements — says the situation at General Electric’s long-term care insurance (LTCI) reinsurance business is much worse than the company has admitted.

Markopolos gives that assessment in a new report on GE.

Markopolos contends that GE has $9.1 billion in accounting issues tied to a non-insurance acquisition; $9 billion in reinsurance company reserve contributions it has to make under a $15 billion agreement with the Kansas Insurance Department; and $18.5 billion in contributions it needs to make to remedy LTCI reinsurance under-reserving that’s not covered by the agreement with the Kansas department.

(Related: LTCI Reinsurer Guards Against Problems at Its Own Reinsurers)

Between now and the first quarter of 2021, when new Generally Accepted Accounting Principles (GAAP) rules take effect, GE will also have to take a $10.5 billion non-cash charge related to the new GAAP rules, according to the Markopolos report.

GAAP rules govern the financial reports prepared by U.S. companies that sell stock to the public.

GE has done less than major competitors to close the gap between its GAAP financial reserves and reserves prepared according to state insurance regulators’ Statutory Accounting Principles (SAP) reserves, Markopolos says.

Markopolos also contends that GE has not given securities analysts and others a clear picture of its finances.

Markopolos says he has based his report on public financial reports, news articles and reports; data from the National Association of Insurance Commissioners databases; and data from AM Best databases.

In part because of Markopolos’s track record as a Madoff whistleblower, the new report has received extensive coverage from major financial services news organizations, including the Wall Street Journal, Forbes, the New York Times and CNBC.com.

The price of shares of GE’s common stock fell 11.3% today, to $8.01, as the S&P500 index was rising 0.25%.

Here are five more things to know about the Markopolos report, for agents.

1. GE is blasting Markopolos’s and conclusions.

“The claims made by Mr. Markopolos are meritless,” GE said in a statement released today. “The company has never met, spoken to or had contact with Mr. Markopolos, and we are extremely disappointed that an individual with no direct knowledge of GE would choose to make such serious and unsubstantiated claims. GE operates at the highest level of integrity and stands behind its financial reporting.”

GE also rejected Markopolos’ allegations about its GE Insurance unit finances and financial reporting.

“We believe that our current reserves are well-supported for our portfolio characteristics, and we undertake rigorous reserve adequacy testing every year,” GE said. “The future implementation of the GAAP insurance accounting standard does not align GAAP and statutory reserves as Mr. Markopolos alleges, but rather will be dependent on a number of variables that will not affect statutory accounting, which drives our funding requirements.”

Top GE board members have issued separate statements.

GE Chairman H. Lawrence Culp Jr. said the following:

GE will always take any allegation of financial misconduct seriously. But this is market manipulation — pure and simple. Mr. Markopolos’s report contains false statements of fact, and these claims could have been corrected if he had checked them with GE before publishing the report. The fact that he wrote a 170-page paper but never talked to company officials goes to show that he is not interested in accurate financial analysis, but solely in generating downward volatility in GE stock so that he and his undisclosed hedge fund partner can personally profit.

Leslie Seidman, a GE director and chair of the company’s audit committee, said this:

The representations by Mr. Markopolos about GE’s accounting practices are simply not accurate. The report contains numerous novel interpretations and downright mistakes about the actual accounting requirements, making his conclusions about GE’s reporting questionable at best. In his own words, he stands to personally financially benefit from today’s significant market reaction to his report, and he is selectively front-running widely reported regulatory processes and rigorous investigations without the benefit of any access to GE’s books and records. I urge readers to carefully consider the motivation behind this report as well as the reliability of the analysis underlying his opinions.

2. Markopolos himself says he has a strong financial incentive to be hard on GE.

Members of the public who want to see his report first have to acknowledge that they have read his disclosures.

Markopolos says in the disclosures that members of his company, Forensic Decisions PR LLC, personally have “securities, derivatives, and/or other financial instruments” that will generate a profit if the price of GE’s stock falls.

Here’s part of the text of the disclosures:

Prior to the initial distribution of this Report on August 15, 2019, the Company entered into an agreement with a third-party entity to review an advanced copy of the Report in exchange for later-provided compensation. That compensation is based on a percentage of the profits resulting from the third-party entity’s positions in the securities, derivatives, and other financial instruments of, and/or relating to, General Electric Company (“GE”) (NYSE: GE). Those positions taken by the third-party entity are designed to generate profits should the price of GE securities decrease. Prior to the initial distribution of this Report on August 15, 2019, the Company also submitted this Report to the U.S. Securities and Exchange Commission’s Whistleblower Program and the U.S. Department of Justice’s FIRREA Whistleblower Program. Both or either of those submissions may generate profits for the Company independent of the financial performance of GE and/or the securities, derivatives, and other financial instruments of, and/or relating to, GE.

Lastly, members of the Company are personally in possession of securities, derivatives, and/or other financial instruments of, and/or relating to, GE, which may generate profits should the price of GE securities decrease.

3. Markopolos says he thinks Unum Group and Prudential Financial Inc. have done a good job with their LTCI blocks.

Markopolos used financial data from Unum and Prudential to benchmark the GE data. He says that the overall finances of the Unum and Prudential blocks look better, that the Unum and Prudential financial reports seem to be more transparent, and that the companies seem to have done a better job of adding to their LTCI reserves.

4. Markopolos also has nice things to say about Genworth and CNO.

Markopolos says the gap between GE’s GAAP reserves for long-term care insurance and the SAP reserves amounts to 52% of the SAP reserves.

The GAAP-GAP gap is just 11% at Unum, 7% at Prudential, 6% at Genworth, and 0% at CNO Financial Group Inc., according to the Markopolos report.

Markopolos notes that the CNO’s GAAP reserves for the Bankers Life long-term care insurance unit exceed the SAP reserves for that unit.

Markopolos also points out that 70% of the in-force policies backed by one of GE’s two big LTCI reinsurance units offers lifetime benefits, compared with just 37% of the in-force policies at Unum, 21% of the policies at Genworth, and 2% of the policies at CNO.

5. Markopolos says Allianz and MassMutual made great reinsurance deals.

Markopolos says that a GE reinsurance unit assumed a block of LTCI business from a unit of Allianz, with about $73 million in 2018 written premiums, had a 2018 loss ratio of 342%. The block of business Allianz retained, which had $153 million in 2018 premiums, had a 2018 loss ratio of 88%, according to the Markopolos report.

He says a block a GE unit assumed from a unit of Massachusetts Mutual Life Insurance Company, or MassMutual, has $83 million in 2018 written premiums and a 100% loss ratio. The block of business MassMutual retained, which had $161 million in 2018 written premiums, had a loss ratio of 1%, according to the Markopolos report.

— Read 30 for 30 Interviews: Harry Markopoloson ThinkAdvisor.

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