Insurance Accounting Probe Spreads; Munich Re Questioned; Bermuda Opens Investigation

April 7, 2005

The accounting investigation swirling around AIG has now spread out across the ocean to reach Bermuda and Germany, as authorities questioned Munich Re about its relations ships with AIG and Island regulatorsd launched itheir own probe into AIG’s activities there.

Reuters reported that New York Attorney general Eliot Spitzer and SEC officials had questioned the giant reinsurer about Bermuda-based Richmond Insurance in which it holds a 50 percent stake. AIG owns 20 percent of the company. A spokeswoman for Munich Re confirmed the meeting, but indicated that the company wasn’t suspected of any wrongdoing and was cooperating with authorities in supplying information.

In Bermuda regulators of the Island’s Monetary Authority have begun their own probe of AIG, as pressure to tighten up regulation of Bermuda-based insurers mounts. Officials have said they are cooperating with U.S. authorities, and are actively seeking ways to strengthen regulations, particularly those concerned with reinsurance transactions.

Speaking at a financial conference in Trinidad & Tobago, Bermuda’s Premier Alex Scott denied that there had been any improprieties on the part of the Island’s regulatory authorities. He indicated that the companies involved – notably AIG – had created their own difficulties, and that they were not specifically related to their presence in Bermuda.

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