(Reuters) – General Electric said on Tuesday it has received a notice from U.S. Securities and Exchange Commission staff, warning that the company could face a civil action for possible violations of securities laws related to accounting practices for some of its insurance holdings.
In a regulatory filing, the U.S. industrial conglomerate said the issues the regulator could pursue relate to the company’s run-off insurance operations – a portfolio of about 300,000 long-term care insurance policies it holds in its GE Capital unit.
In 2017, GE took a surprise accounting charge of $6.2 billion and said it would need to set aside $15 billion for long-term care insurance payouts, one of the largest such amounts ever.
Securities regulators opened a probe into the company’s accounting practices after the massive insurance charge. The inquiry, which initially focused on long-term service agreements for maintenance of power plants, jet engines and other industrial