The Securities and Exchange Commission has requested information from Warren Buffet's General Re about the sale of products to generate steadier earnings, making it the seventh insurer the SEC has investigated since New York Attorney General Eliot Spitzer launched his investigation into bid-rigging and price fixing.

Although many in the industry are surprised to see a firm run by a man known for his integrity and his outspokenness against accounting manipulation to be investigated, others characterize it as routine information-gathering from one of the largest insurers in the nation, The New York Times reports. Specifically, the SEC is interested in a type of reinsurance known as a finite loan, which comprised 20%, or $10 billion, of General Re's insurance reserves for 2003. Used properly, insurers will spread their reinsurance to other insurers in the form of finite loans in exchange for premiums. But critics say that some insurers set the premiums to be paid at a later date to smooth earnings, a direct violation of accounting rules.

"It's not too surprising that the SEC would be looking at Berkshire simply because of its size and the fact that its subsidiaries sold this type of product," said Haywood Kelly, chief securities analyst for Morningstar. "The big question is whether the company knowingly sold these products to customers who they knew were just trying to inflate their earnings."

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