Michael Cash, a senior vice president in the company's specialty reinsurance division, had received a subpoena from the SEC asking him to testify as part of the agency's probes into finite reinsurance and a recent restatement of RenaissanceRe results, the company said.
"The company is cooperating with the government authorities in their investigations, and Mr. Cash's action was inconsistent with that policy of cooperation," RenaissanceRe (RNR) said in a statement. Shares declined $1.43, or 3%, to $46.17 in afternoon trading as almost 1 million shares changed hands, more than twice the 10-day average volume.
Efforts to contact Cash, a Bermuda citizen, weren't successful. A RenaissanceRe spokeswoman said she didn't know if Cash was represented by an attorney.
The SEC and other regulators are investigating the use of so-called finite reinsurance, which is a blend of financing and reinsurance. The authorities are concerned that some insurers have used the agreements to manipulate their financial statements. Many insurers have been subpoenaed as part of the broad inquiries.
A finite reinsurance agreement between American International Group (AIG) and Berkshire Hathaway's (BRKA) (BRKB) General Re, which helped AIG artificially inflate its loss reserves, triggered an investigation into the giant insurer's accounting and forced the company to restate five years of earnings earlier this year.
In February, RenaissanceRe said it was restating its results from 2001, 2002 and 2003 to correct how it accounted for reinsurance it had purchased from companies including Inter-Ocean Holdings Ltd.
Inter-Ocean, which specialized in finite reinsurance and was partly owned by RenaissanceRe, stopped underwriting new business in April.
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