The Irish Financial Services Regulatory Authority (Ifsra) has said it is satisfied that the Cologne Reinsurance company has taken appropriate "corrective action" regarding two of its Dublin-based executives who have been barred from acting as senior managers or directors in the Australian insurance industry.

The executives remain in place at Cologne Re's operation in the IFSC, almost six months after the Australian regulator found they had a central role in a controversial reinsurance deal that disguised the weak financial position of one of Australia's most prominent insurers.

Cologne Re's operations in Dublin are the subject of a separate investigation by US regulators, who are examining contracts for finite reinsurance between its affiliate General Re and the US insurance giant AIG. Ifsra is co-operating with that investigation.

Cologne Re and General Re are subsidiaries of the US Berkshire Hathaway group, led by billionaire investor Warren Buffett.

While the Ifsra spokesman would not say whether the body was conducting its own investigation into the company, Government officials believe that to be the case.

The individuals barred by the Australian regulator - senior marketer Tore Ellingsen and chief property and casualty underwriter for international finite reinsurance John Houldsworth - are appealing the decision to disqualify them.

Ifsra's official spokesman acknowledged that the body was aware of their cases before the two men were barred last October and immediately pursued it with Cologne Re and other regulators.

However, he said Ifsra was not empowered to take any direct action against people who worked below the level of director or executive director.

Its approach in relation to such people was to oblige the company in question to take responsibility for the matter, he said.

"We are satisfied with the corrective actions in relation to these individuals that have been taken to date by Cologne Re and we will continue to actively monitor the situation."

He declined to say what particular action was taken and said he could not say what action Ifsra would have taken if Mr Ellingsen and Mr Houldsworth were working at director or executive level.

"We are ensuring that the people running the business here are fit and proper to do so and ensuring that the people they put in place to do the business here are fit and proper to do so."

Mr Ellingsen and Mr Houldsworth were among six executive disqualified over a General Re reinsurance transaction that "improperly boosted" the profit and loss account for 1997/98 of FAI Ltd, an Australian insurer.

During that period, Mr Houldsworth was employed as the chief executive of Cologne Re in Dublin.

The subsequent acquisition of FAI by Australia's second-biggest insurer, HIH, was instrumental in HIH's collapse in 2001.

The Australian Prudential Regulatory Authority found that General Re's arrangement with FAI was disguised as a number of traditional reinsurance transactions. The risks to General Re's Australian operation were removed through "side letters" between the parties.

The separate question of whether a $500 million (€387 million) reinsurance contract between General Re and AIG artificially boosted AIG's reserves is being investigated by the US Securities and Exchange Commission and the New York attorney general, Eliot Spitzer.

US regulators have told The Irish Times that they believe the money trail in this case leads directly to Cologne Re's operation in Dublin.

Ifsra's spokesman declined to comment on the detail of its work in this area and was unable to say whether any other reinsurance companies operating in Ireland were under investigation.