Probe on Buffett company widens
Some of Berkshire’s insurance units, which include General Re Corp, were asked how they accounted for a type of reinsurance contract that can be abused to polish financial results, the company said. Second-quarter profit at Omaha, Nebraska-based Berkshire rose 13% as investment income from the insurance businesses cushioned a loss from foreign-currency holdings.
The disclosure suggests state and federal prosecutors may be widening their probe beyond General Re’s role in a four-year-old reinsurance contract that allowed AIG to overstate reserves for claims by $500 million (€410 million). At issue was whether General Re executives knew AIG would use the contract improperly.
