General Electric shares fell after a major credit rating agency reiterated concerns about the business raised by Bernie Madoff, warning Harry Markopolos. designated GE's portfolio as the second riskiest. The only long-term insurance company considered risk fillers was Genworth Financial, which was spun off by GE in 2004.
Fitch called GE's insurance business "below average" in terms of reserves, saying exposure to costly long-term care insurance payments is "very high. ”
The comments come just days after Markopolos on Thursday called the light bulb manufacturer" a bigger fraud than Enron "- which gave the stock down 11%. Like Fitch, Markopolos also targeted GE's long-term insurance business and said losses there could force GE to file for bankruptcy.
GE shares slipped 3.3% to $ 8.38.
With over 250,000 long-term insurance policies and only $ 21
GE objected that it is not reserved compared to its peers.
"Our current reserves are well supported for our long-term care portfolio properties," it wrote to The Post. "Our future commitments depend on variables that will play out over decades, not years."
The conglomerate also received approval from Goldman Sachs analyst Joe Ritchie, who after reviewing "reserves per policy" across the industry, said in a report that GE seemed better positioned than many of its peers.