General Reinsurance’s subsidiary, Kolnische Ruckversicherungs-Gesellschaft AG, Cologne Re, has been cited by the German Federal Financial Supervisory Authority (BaFin) regarding its activities in relation to the agency’s probe concerning “finite reinsurance” and related transactions.
Berkshire Hathaway, the ultimate parent of both Gen Re and Cologne Re revealed the probe in a note to its third quarter earnings announcement, released last Friday, Nov. 3 (See IJ Website). Berkshire’s filing may also be accessed at: http://www.berkshirehathaway.com.
Berkshire’s note said it is “also cooperating fully with requests for information and orders to produce documents” from the BaFin, “regarding the activities of Cologne Re relating to ‘finite reinsurance’ and regarding transactions between Cologne Re or its subsidiaries, including CRD, and certain counterparties.”
The note also stated: “In particular, Cologne Re is cooperating fully with a BaFin order to produce documents received on October 24, 2006. The order states that it is part of the BaFin’s continuing investigation into financial reinsurance agreements and that Cologne Re, and possibly one or more of its senior executives, is suspected of violating legal provisions in regard to such agreements.”
Other than the earnings report note, neither Berkshire, nor Gen Re have otherwise commented on the investigations.