Italy's tax police said today that they are seizing houses, hotels and other assets totalling 250 million euros as part of an investigation into alleged false accounting and market manipulation by the former owners of insurer Fondiaria-Sai.

The investigation led last month to the arrest of Fondiaria's former owner Salvatore Ligresti, members of his family and various managers.

The arrests related to a 600 million-euro hole found in the group's claim reserves, which had not been disclosed to the market, police said at the time.

Police said in a statement on Monday the alleged crimes resulted in illicit profits of 251.6 million euros, prompting the confiscation of assets worth an equivalent amount situated across 25 Italian regions.

They said the seizures include the Ligresti family's Milanese estate, along with upscale hotels they own in Turin, Sicily and the mountainous Dolomite region.

Fondiaria's position as Italy's leading motor insurer has been hit by increasing competition and a drop in the number of people buying car insurance in Italy's longest recession since World War Two, leading to a complex takeover deal struck last year with peer Unipol.

The four-way tie-up with Unipol is expected to be completed by the end of the year. The chief executive of Italy's largest bank Unicredit, which is the biggest creditor of Fondiaria and the Ligresti's holding company Premafin, said in July the arrests would not affect the deal.

No one at Fondiaria was immediately available for comment.