Five insurance executives accused of a sham reinsurance deal must now bear the consequences, a US federal prosecutor argued in closing statements at the Gen Re finite risk trial last week.

On trial are Gen Re senior executives Ronald Ferguson, Christopher Garand, Robert Graham and Elizabeth Monrad, and former AIG VP for reinsurance Christian Milton.

If convicted of conspiracy and fraud charges, jail terms for each could top 150 years with fines in excess of $US29 million ($32 million).

It is alleged the five set up a finite reinsurance deal between AIG and the Gen Re subsidiary Cologne Re Dublin that allowed AIG to inflate its loss reserves by $US500 million ($553 million) in 2000 and 2001.

The deal appeared to include a risk transfer where it did not exist, and it is alleged an agreement was made for AIG to refund the Gen Re premium and pay Gen Re a $US5 million ($5.5 million) fee.

Assistant US Attorney Eric Glover said the defendants knew this would lead to a false AIG financial statement.

Defence lawyers countered the claims and questioned the credibility of prosecution witnesses.