While APRA continues to consider the findings of an 18-month investigation into the dodgy activities of Warren Buffett’s General Reinsurance here, the British authorities have jumped in with a 1.2 million pound fine for General Re over two bogus reinsurance deals.
As anyone who took any interest in the HIH/FAI scandal knows, General Re helped FAI out of a spot of bother by doing fake reinsurance deals, allowing FAI to claim profits when none existed. The banning of a couple of General Re executives could be just one part of APRA’s reaction to all that, eventually.
But given the latest UK scams involving General Re, plus the investigations into reinsurance deals it did with AIG in the US, a picture is beginning to emerge of not just a company with a couple of overly-keen executives, but also of a company with an international pattern of assisting and perhaps perpetuating fraud.
This does not fit well with the homey image of Warren Buffet, the Sage of Omaha, one of the world’s two biggest philanthropists. But string enough bogus reinsurance deals together in several countries and you end up with a corporate culture bordering on the criminal. Over to you, Warren.