Buffett Insurer Set to Be Probed by Oz Regulator

Article excerpt

Byline: BILL CONDIE

BERKSHIRE Hathaway's insurance business, under fire on three continents for possible collusion with giant insurers such as AIG, says it will "co-operate fully" with Australian regulators which have said they may launch a probe.

The firm's unit, General Reinsurance Australia, must today explain why it should not be investigated for transactions which may have helped insurers hide losses.

The company "has responded to the notice and will cooperate fully with any investigation", a spokesman told Bloomberg.

Warren Buffet's Berkshire bought General Re in 1998, and it is run by some of the legendary investor's closest lieutenants.

Buffet has a reputation for squeaky-clean business dealings, and is at the forefront of campaigns for the highest standards of corporate governance.

But the company is already under investigation in the US over reinsurance policies that may help insurers such as American International Group and Zurich Financial Services Group smooth their earnings.

The Australian unit has refused to say what it will put in its response to regulators later today.

The potential investigation arose from the debris of failed Australian insurer HIH. The liquidatorhas warned Berkshire he plans to pursue claims that General Re helped contribute to the collapse, and may accuse it of helping HIH subsidiary FAI Insurance deceptively-account for transactions as reinsurance. …

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