Martin Merritt, the ex-controller of RenaissanceRe, settled fraud charges over his role in a "sham reinsurance transaction" that caused the company to file false financial statements in 2001 and 2002, US regulators said on Friday.

Mr. Merritt, who neither admitted nor denied the charges, has been suspended from appearing or practising as an accountant before the US Securities and Exchange Commission, the SEC statement said.

The "sole purpose" of the transaction in question was to "smooth and defer" $26 million in RenaissanceRe's earnings between 2001 and 2003, the SEC said.

In addition to violation of generally accepted accounting principles (GAAP), the SEC also alleged Merritt "made material misrepresentations and omissions about the transaction to RenaissanceRe's independent auditors," according to the SEC statement.

The investigation over the alleged transaction also led to the resignations in 2005 of RenaissanceRe chief executive officer James Stanard and senior vice president Michael Cash, both of whom were also charged with securities fraud. They deny the charges.

RenaissanceRe disclosed, as part of the second quarter 2006 earnings announcement, that it has submitted an offer of settlement to the SEC in connection with the agency's probe of the company and has received the support of the SEC staff.