Genworth Financial Inc., the insurer that posted two straight quarterly losses tied to reserve shortfalls at its long-term care unit, said it has a material weakness in its accounting.

“We are currently working to remediate the material weakness,” according to a regulatory filing Monday from the Richmond, Virginia-based company. “We did not have adequate controls designed and in place to ensure that we correctly implemented changes made to one of the methodologies as part of our comprehensive long-term care insurance claim reserves review.”

The disclosure adds to challenges for Chief Executive Officer Tom McInerney after the company was stripped of its investment-grade credit rating and shares dropped. An Australia mortgage insurance unit, which the company had highlighted as strong performer, had its outlook cut to negative by Moody’s Investors Service on Feb. 20 after announcing the end of a deal with Westpac Banking Corp.

Genworth posted net losses of $844 million in the third quarter of last year and $760 million in the fourth. The day after the latter report, Chief Financial Officer Marty Klein told investors that the company was assessing whether there were accounting shortcomings.

Long-term care coverage helps pay for home-health aides and nursing home stays. Some customers pay premiums for decades before the insurer knows if it will incur claims costs.

Accounting for the contracts involves periodically reevaluating the percentage of policyholders who submit claims and the cost per person. Lower interest rates also force the company to change profitability assumptions, because they mean that insurers earn less on bonds held to back obligations.

MetLife Inc. and Prudential Financial Inc., the largest U.S. life insurers, also were burned by higher-than-expected costs on long-term care. They stopped issuing new policies, which helped Genworth gain market share.

McInerney has been charging more for new policies while seeking regulators’ permission to increase rates on coverage sold in prior years. He has also been cutting jobs and said he may sell assets to shore up the company’s finances.