The former chief executive of Cologne Reinsurance in Dublin has been placed on "administrative leave" from the company, days after it emerged that he is facing charges in the US over contracts the company wrote with the US insurance giant, AIG.
John Houldsworth commenced his leave from Cologne Re yesterday, where he has worked most recently as chief property and casualty underwriter for international finite reinsurance at its IFSC office.
He is being paid while on administrative leave, subject to his continuing co-operation with investigations into contracts for a form of reinsurance that is alleged to have improperly boosted AIG's reserves.
"We are aware that an employee is on administrative leave from the firm.
"Our inquiries with the firm are ongoing and we are continuing to work with other regulators, including the SEC," said a spokesman for the Irish Financial Services Regulatory Authority (Ifsra).
Cologne Re is owned by General Re Corporation, a subsidiary of Warren Buffett's Berkshire Hathaway conglomerate whose contracts for "finite risk" reinsurance are also the subject of an Ifsra investigation and inquiries by Australian and British regulators.
Such contracts are designed to soften the impact of claims that may have to be paid over a long period.
At issue is whether certain General Re contracts strengthened the financial position of its clients by negating the element of risk in the transaction.
Amid pressure on AIG that has already prompted the departure from the group of its long-time chief executive, Maurice "Hank" Greenberg, the group said in March that it had improperly accounted for transactions worth $500 million (€395.7 million) with General Re.
People familiar with the situation identified Mr Houldsworth as the "employee" cited in a Berkshire Hathaway filing to the Securities & Exchange Commission (SEC) who was described as a target of an investigation by the US Department of Justice.
The same filing said the employee had received a "Wells notice" from the SEC. Such a notice typically informs the recipient that investigators are planning to recommend that the SEC should bring civil charges against the recipient for securities fraud.
Mr Houldsworth has been given about a month to respond to the notice which was served last week.
The SEC filing said that the Cologne Reinsurance Company (Dublin) Ltd was providing information to and cooperating fully with Ifsra's inquiry.
Mr Houldsworth, from England, is known to be appealing his disqualification last October from working at a senior level in the Australian insurance industry over similar contracts for finite risk reinsurance.
Australian regulators also disqualified another member of Cologne Re's staff in Dublin, Tore Ellingsen, who left the company last month.
Cologne Re's chief executive in Dublin, James Maher, did not return calls yesterday.
