Renaissance Re served lawsuit

RenaissanceRe Holdings Ltd. along with current and former executives were recently served a shareholder lawsuit filed by investors claiming they were misled about the firm’s true financial condition.
Goodkind Labaton Rudoff & Sucharow L.L.P. and Philadelphia-based Goldman Scarlato & Karon P.C. jointly filed the complaint, which names Pembroke, Bermuda-based RenaissanceRe, James N. Stanard, chairman and chief executive officer; William I. Riker, president; John M. Lummis, chief operating officer; Michael W. Cash, senior vp-specialty reinsurance; and Martin J. Merritt, controller.
The Company and the five individuals violated federal securities laws by issuing false and misleading statements regarding the company’s financial state, according to the shareholder suit..
The complaint claims that various financial statements by RenaissanceRe were fraudulent because of: promblematic finite reinsurance contracts entered into in 2001 with Inter-Ocean Holdings Ltd., now in runoff; improper accounting for the timing of reinsurance recoverables, which led to a misstatement of net income by as much as 12% in a given year; improper accounting for the timing of recognition of premium on multiyear ceded reinsurance contracts during the first three quarters of 2004; and noncompliance with rules outlined in the Generally Accepted Accounting Principles.
The SEC has been investigating RenaissanceRe’s accounting and its use of finite reinsurance products since the company in February announced it would restate three years’ results largely to correct for improper accounting for business with Inter-Ocean