Investigation into CRD’s activities

Ian Guider

The investigation is the latest to hit General Re's Irish subsidiary Cologne Reinsurance Dublin (CRD) which is already under scrutiny by financial regulators worldwide.

"The Office of the Director of Corporate Enforcement in Ireland is conducting a preliminary evaluation in relation to CRD concerning, in particular, transactions between CRD and AIG. CRD is cooperating fully with this preliminary evaluation," General Re said.

AIG, the world's largest insurance company, has admitted that deals totaling $500 million (404m) between it and General Re were a "sham" designed to artificially inflate its profits and revenues. The investigation of the deal with AIG has been triggered by a worldwide inquiry into the reinsurance sector, triggered by the E3 billion collapse of Australian insurance company HIH four years ago.

General Re employees, including two from its Dublin branch, were banned from working

Australia's financial services industry over their role in the downfall of HIH.

Former CRD chief executive John Houldsworth was sacked from the company in June after he pleaded guilty to charges in the US over the AIG transaction.

Mr Houldsworth pleaded guilty to a charge of conspiracy to file false financial reports and could receive up to five years in prison when sentenced in December.

If the ODCE finds any improper activities at Cologne Re, it has the power to take the company to the High Court seeking the disqualification of its directors.