RenaissanceRe Bermuda-based executive quits over U.S. SEC subponea
There was a short little news item yesterday about how a certain executive in RenaissanceRe's specialty reinsurnace unit, a certain Bermuda resident named Michael Cash, resigned following his refusal to accept a subpoena from the U.S. Securities and Exchange Commission. That SEC subponea had called for his testimony in its investigation into the restatement of the company's financial statements. For those readers who do not immediately recall, RenRe stated in March 2005 that it was restating four years of results due to a "misaccounting of business" it did with a reinsurer that it was a nine percent owner of -- Inter-Coean Reinsurance, a finite reinsurance company that entered run-off back in April. RenRe's move to restate its results led its board to rebuke chief executive officer, James Stanard, and four of his deputies for some "mistakes" and lack of "due care" in accounting for the Inter-Ocean contract.
There is likely to be much more to the RenRe/Inter-Ocean story still to emerge and Mr. Cash's resignation will be just one more side note in the multiple investiagations of non-traditional insurance and reinsurance transactions. What is intriguing to this author is that the resignation came over an financial results restatement subpoena and not the subpoena issued to RenRe in mid-June by the Southern District of New York regarding its use and sale of finite reinsurance.