The financial regulator has asked each of the 195 reinsurance groups in the IFSC to verify that there are no "issues" with contracts they have written for a form of reinsurance that is under scrutiny in a number of international investigations.
With Ifsra deepening scrutiny of the sector, several Dublin-based groups are understood to have initiated audits to ensure that current and past contracts for "finite risk" reinsurance are in order.
The development comes as US and Australian regulators investigate finite risk transactions written in Dublin by General Re, a company controlled by Mr Warren Buffett's Berkshire Hathaway conglomerate.
Finite risk deals are typically designed to soften the impact of insurance claims that may have to be paid over a long period. At issue is whether the risk element in the deals was improperly negated, meaning that the transactions should have been treated as loans between the parties.
The investigations have focused international attention on the IFSC, which is the fourth biggest reinsurance centre in the world, with annual premiums of €13 billion. Apart from "fitness to practise" provisions governing directorships in such groups, the sector is unregulated.
In letters sent out this week, Ifsra asked the reinsurance groups to examine all their finite risk contracts and write back to it "in relation to any issues that emerge". Ifsra's spokesman did not know what deadline Ifsra had imposed on the reinsurers.
While the process was initiated "with recent events in mind", he said it was also connected to the debate on a new EU directive that will increase regulation of the sector.
Sources in Australia said yesterday that an inspector hired on Thursday to conduct a full inquiry into General Re's Australian business will examine a transaction in 2000 with the Swiss insurance giant Zurich Financial.
The Australian Prudential Regulation Authority has been examining the deal since last June and it has linked the contract to General Re's Dublin unit, which trades as Cologne Re.
The investigation is not connected to the Zurich Financial's business in Ireland, Eagle Star.
Zurich Financial spokesman Daniel Hofmann said the General Re contract had been cancelled. The group was still discussing the "accounting treatment" of the transaction with the Australian regulator, he said.
Cologne Re chief executive James Maher had no comment.
The Zurich Financial contract is the third transaction linked to the Dublin unit to emerge as the subject of international scrutiny.
The first two concerned a deal that featured in an inquiry into the 2001 collapse of Australia's second biggest insurer, HIH, and a US investigation into a contract booked with the world's biggest insurer, AIG. That scrutiny has already led AIG to restate its books and oust its long-time chief executive, Maurice "Hank" Greenberg.
