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Gen Re not targeted in federal ROA probe

Posted On: Oct. 22, 2006 12:00 AM CST

OMAHA, Neb.¬óGeneral Reinsurance Corp. is no longer a target in a federal prosecutor's probe of Reciprocal of America, Gen Re parent Berkshire Hathaway Inc. reported last week in a regulatory filing.

Omaha, Neb.-based Berkshire--whose Gen Re unit had served as the main reinsurer for ROA, a reciprocal insurer of physician, hospital and lawyer's professional liability risks that collapsed in 2003--said it learned of its exemption from the ongoing probe through a letter it received from the U.S. Attorney for the Eastern District of Virginia, Richmond Division.

Gen Re in March 2005 disclosed that it and four of its current or former employees, including a former president, had been subpoenaed in connection with the U.S. attorney's office investigation into Glen Allen, Va.-based ROA, which is now in liquidation.

Several current and former Gen Re employees had been interviewed by the U.S. attorney's office and the Department of Justice in relation to the probe, Gen Re said.

In addition, one of the individuals originally subpoenaed had been informed by the U.S. attorney's office in Virginia that the individual was a central subject of the probe. But the U.S. attorney's office as part of its letter last week "confirmed that neither this individual, nor any current or former employee of General Reinsurance, is currently a target" of the investigation, Berkshire said.

Berkshire noted in its filing with the Securities and Exchange Commission that its Gen Re unit will "continue to cooperate fully" with the U.S. attorney's probe of ROA.

In June, a federal judge threw out civil racketeering charges filed against Gen Re by Virginia and Tennessee regulators that are liquidating ROA and its affiliates (BI, June 26).