Berkshire Hathaway announced that its subsidiary, General Re Corp., terminated the consulting services of Ronald E. Ferguson, its former chief executive officer, after he refused to answer questions from investigators.
The Omaha-based firm said on its Web site on May 20 that the move came after Mr. Ferguson invoked the Fifth Amendment in response to questions from the Securities and Exchange Commission and the Department of Justice relating to ongoing investigations.
Gen Re has been under scrutiny for a finite reinsurance transaction involving American International Group. AIG admitted the accounting of the deal was improper, prior to being hit with a civil lawsuit last Thursday filed jointly by New York Attorney General Eliot Spitzer and the New York Insurance Department. The suit also alleged improper accounting practices.
AIG said on March 30 that $500 million reinsurance arrangements in 2000 and 2001 should not have been recorded as insurance, and that AIG’s financial statements will be adjusted to recharacterize such transactions as deposits.
Berkshire Hathaway said Mr. Ferguson had been providing consulting services to General Re and certain of its affiliates under a consulting agreement entered into when Mr. Ferguson stepped down as CEO of Gen Re Oct. 1, 2001.
Separately, Hartford Financial Services Group and Everest Re Group each disclosed that they received subpoenas regarding non-traditional products last week.
Hartford’s subpoena came on May 24 from the Connecticut Attorney General’s Office requesting information regarding the company’s having been a party to any finite reinsurance transactions.
On May 25, Bermuda-based Everest Re Group, Ltd., said a subpoena for its U.S. holding company subsidiary, Everest Reinsurance Holdings Inc., came from the SEC seeking information regarding certain loss mitigation insurance products. Everest said its insurance subsidiaries have also received and are responding to broadly distributed information requests by state regulators, including from Delaware and Georgia.