Seven years after he founded Max Re, Robert Cooney resigned yesterday, the latest victim of a finite reinsurance scandal that has already claimed the scalp of RenaissanceRe chief executive James Stanard.

Until yesterday, Mr. Cooney was probably best known for recognising that an innovative business plan was not working in the early days of Max Re and switching over to a more traditional reinsurance product.

Mr. Cooney founded Max Re in 1999 as a finite reinsurer. The company also heavily used hedge funds in its investment portfolio and one of its major investors was hedge fund company Moore Capital.

Later, the company changed tack and moved into more traditional reinsurance markets. The move appeared to pay off, but Mr. Cooney has never ruled out future changes in strategy, saying in 2002: “We are opportunistic. We want to deploy our capital where we can be paid an adequate price for assuming a unit of risk.

“Three years from now,” he said, “we might shift around again and take advantage of market conditions, if that’s the right thing to do.

“It has always been our belief that insurance and reinsurance companies need to be flexible, if they are to survive changing market conditions.

“The insurance industry is replete with companies that stuck doggedly to under-performing strategies, and failed to maximise the return to their shareholders as a result.”

The strategy paid off again earlier this year, when Max Re started to focus on property catastrophe reinsurance to take advantage of rising rates in the sector after the record hurricane season in 2005 while dropping less profitable lines.

At the same time, Mr. Cooney said in an interview in The Royal Gazette <$>that he was confident the earnings smoothing episode was over, saying: “Like all reinsurers, we routinely look back at contracts to ensure that they are properly reserved.

“In this case, the question arose internally whether there was sufficient risk transfer in three transactions to justify accounting for them as reinsurance, or in this case, retrocessional contracts.

“It’s a question of judgment, and five years after the fact, you have more knowledge than you did when you recorded them. We felt that a thorough review was called for, and our Audit Committee elected to make the review truly independent by engaging outside legal counsel, who themselves engaged accountants and actuaries.”

The investigation endorsed the original accounting decisions with respect to risk transfer, giving Max Re a clean sheet on the transactions.

“However,” Mr. Cooney said, “when you carry through an investigation such as this, other, technical issues can arise. We felt that we had discovered some questions.”

Before founding Max Re, Mr. Cooney was one of the most prominent senior executives at XL Capital, having joined the company virtually at its inception in 1987.

Until 1999, he held various senior management positions at XL Insurance Limited, one of the principal insurance operating units of XL Capital Limited.

In 1998 he became president and chief executive officer of XL Insurance Limited and executive vice president of XL Capital Limited.

From 1995 to 1998, he was president and chief operating officer of XL Insurance Ltd.

From 1983 to 1987, Mr. Cooney held various senior management positions at Trenwick Group, Incorporated, a US based insurer and reinsurer and its Bermuda based subsidiary, Trenwick Services, Ltd., including the position of president of Trenwick Services, Ltd.

From 1980 to 1983, he was a partner at Wypich Illsley & Associates, a management consulting and executive search firm. From 1978 to 1979, he was a casualty facultative underwriter for General Reinsurance Corp.

Mr. Cooney received his BS (Bachelor of Science) in geology in 1976 from Mount Allison University and received his MBA from Queen’s University in 1978.