SEC Requests Information From Buffet's General Re
January 10, 2005
The Securities and Exchange Commission has requested information from Warren Buffet's General Re about the sale of products to generate steadier earnings. The SEC is interested in a type of reinsurance known as a finite loan, which comprised 20%, or $10 billion, of General Re's insurance reserves for 2003. Used properly, insurers will make finite loans to other insurers in exchange for premiums. But critics say that some insurers set the premiums to be paid at a later date to smooth earnings, an accounting violation.