The Australian Prudential Regulation Authority (APRA) is investigating transactions related to the collapse of HIH that were arranged with the Australian operations of General Re  – a subsidiary of US multi-billionaire Warren Buffett’s Berkshire Hathaway.

Although General Re wrote last month to APRA outlining why it believes further investigation of its activities is not necessary, the investigation – which concerns the Berkshire Hathaway group’s insurance business transactions involving financial reinsurance – is going ahead.

Estelle Pearson of Finity Consulting (formerly Trowbridge Deloitte) has been appointed under section 52 of the Insurance Act “to investigate General Re’s complex financial products in relation to financial and finite reinsurance and the marketing and promotion of those products”.

The appointment of Ms Pearson as an official inspector follows APRA’s investigation in 2004 of certain financial reinsurance practices in Australia.

It is the second time under the spotlight for General Re, which was investigated during the HIH Royal Commission for reinsurance products sold to FAI Insurance in 1998.

Regulators in the US are investigating Mr Buffett over similar transactions involving American International Group.