Former Max Re chief executive officer Bob Cooney said it was a tough and emotional decision to leave the company he had built up from scratch after a restatement of five years of earnings, writes Jonathan Kent.

Mr. Cooney volunteered his resignation as chairman and CEO in October 2006, following an internal company probe into "finite" reinsurance contracts, which regulators say can be used to smooth earnings. Mr. Cooney said he believed to this day that there had been no wrongdoing. Max's problems were part of an industry-wide investigation into finite insurance led by the former New York Attorney General Eliot Sptizer and more than a dozen insurers and reinsurers received subpoenas during the probe.

Although finite insurance had been widely used in the industry for many years, regulators started to question whether such tansactions involved a genuine transfer of risk. If not, accounting rules required that they be booked as loans.

"At the time a lot of companies were getting scrutinised and a lot of companies were restating earnings," Mr. Cooney said. "I don't believe there was any wrongdoing.

"We didn't want the SEC to come in because that's an expensive and time-consuming proposition.

"I had led the company for nearly eight years and I was proud of our accomplishments. I also recognised that these kind of problems can have a way of weighing down on a company.

"By accepting the ultimate responsibility, I thought I may help the matter get resolved and, as a shareholder, I could see the logic and value in that.

"It was the most difficult decision I have had to make and it was quite emotional for me."

Max revised its earnings for 2001 to 2005. Marston Becker was appointed to succeed Mr. Cooney at Max CEO. The company has since changed its name to Max Capital.