General Reinsurance, which is owned by Warren Buffett’s Berkshire Hathaway Inc., said it learned this week that the company is not a target of a federal investigation into the collapse of insurer Reciprocal of America.
Officials at General Re received a letter from the U.S. Attorney for the Eastern District of Virginia stating that the Berkshire subsidiary is not considered a target or subject of the investigation into the collapse of Reciprocal, according a filing with the Securities and Exchange Commission.
Four current or former General Re employees had previously received subpoenas as part of the Reciprocal investigation, and one of the four had been identified as a target of the investigation. The U.S. Attorney’s letter said none of those four current or former employees are currently targets of the investigation, according to Berkshire’s filing.
Officials at Berkshire’s Omaha headquarters and General Re’s Stamford, Conn., headquarters did not immediately return calls for comment.
Reinsurance policies, such as those General Re offers, are bought by insurance companies to cover all or part of their risk.
Tens of thousands of doctors, lawyers and hospitals in the South and Midwest were insured by Reciprocal and its affiliates before its demise in 2003. That led to investigations that shed light on troubling industry practices and sent tremors through Wall Street.
Virginia and Tennessee regulators accused the company and its business partners, including General Re, of hiding Reciprocal’s deteriorating finances through sham transactions.
Calls the U.S. Attorney’s office in eastern Virginia were not immediately returned Tuesday.
Berkshire acquired General Re in late 1999.
Berkshire owns several companies that sell primary insurance and reinsurance of property and casualty risks, including GEICO and General Reinsurance Corporation.
Berkshire also owns companies that sell furniture, jewelry, candy, carpet and paint, and it has large stakes in other well-known companies like Coca-Cola Co., American Express Co., and Washington Post Co.
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