Canadian Underwriter

Berkshire Hathaway says Buffett not briefed on AIG transaction

March 29, 2005   by Canadian Underwriter

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In a rare move, Berkshire Hathaway has issued a statement responding to recent media stories concerning its chairman Warren Buffet. The parent company of National Indemnity and Gen Re specifically seeks to dispel reports Buffett was in the know on certain transactions which have fallen under regulatory scrutiny.
In the statement, the company says Buffett “was not briefed” on the nature of reserve transactions dating back to 2000-2001 between Gen Re and AIG, adding that he was not aware of “any improper use or purpose of the transactions”.
The statement confirms that Buffett will meet with investigators soon as part of ongoing investigations into finite reinsurance practices. It adds that a number of other Berkshire Hathaway/Gen Re executives have already met with investigators.
In another matter, Berkshire Hathaway says reports that National Indemnity used a “side letter” to document a transactions with Australian insurer HIH prior to its acquisition by Berkshire Hathaway are false. However, Gen Re did use a side letter in a transaction with HIH, but this was prior to Gen Re being acquired by Berkshire Hathaway.
Lastly, Berkshire Hathaway refuted claims that Buffett “typically speaks with the heads of Berkshire’s units late each afternoon”, saying he typically leaves operating decisions up to the individual managers of the company’s business units.
Berkshire Hathaway stresses that its does not expect to restate its financial reports, contrary to some speculation.