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Swiss Life Says Chairman Will Quit

November 7, 2002

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ZURICH, Switzerland (AP) _ Swiss Life said Thursday its chairman would step down next year, a day after announcing it had replaced its chief executive.

Switzerland’s largest insurer said Andres Leuenberger will resign at the company’s next annual general meeting in the spring of 2003.

The company did not give a reason for Leuenberger’s planned departure, but his resignation had been expected after Swiss Life fired chief executive Roland Chlapowski on Wednesday over a series of management mishaps. Chlapowski had been in the job eight months.

Swiss Life is under investigation by Switzerland’s federal insurance office and a Zurich prosecutor after revelations about a secretive investment fund from which executives made huge gains.

Six of Swiss Life’s top managers made a gain of 11.5 million Swiss francs ($7.8 million) on a 3.8 million franc ($2.6 million) investment in the fund, Long Term Strategy AG, the company disclosed last week. Leuenberger was not among the six.

Chlapowski, who said the top management’s participation in the fund met all legal requirements, made a profit of 3.2 million francs ($2.2 million) on an investment of 967,000 francs ($658,000) before the fund was closed in July. Other top managers who participated in the fund included former chief executive Manfred Zobel and former finance head Dominique Morax.

Swiss Life’s board faced criticism over the investment fund at a time when the company was forced to restate its first-half results after what it said were accounting errors.

The Zurich court also is investigating the mistakes, which led to a widening of Swiss Life’s first-half 2002 loss, and turned last year’s profit into a loss.

Last week, Swiss Life revised its first-half loss to 578 million Swiss francs ($393 million), which was worse than the previously reported 386 million francs.

Swiss Life blamed a technical glitch in its securities administration system that incorrectly led to an error in calculating the value of some bond investments. Auditor PricewaterhouseCoopers discovered the mistake when it reviewed Swiss Life’s first-half accounts ahead of a planned share offering.

In September, Swiss Life also restated its first-half results for 2001. The company said it had lost 1 million francs ($680 million), rather than a profit of 254 million francs ($173 million) that it reported previously.

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