WASHINGTON (Bloomberg) ? RenaissanceRe Holdings Ltd., a Bermuda-based reinsurer, said the US Securities and Exchange Commission told chairman and chief executive James Stanard that he may be sued over the company?s earnings restatement.

Stanard, 56, received a Wells notice indicating the SEC is likely to sue him for violating securities laws, RenaissanceRe said in a statement yesterday. The company?s shares fell as much as 7.3 percent.

RenaissanceRe?s February restatement stemmed from improper accounting on reinsurance the company purchased in 2001.

Regulatory probes of reinsurance at American International Group Inc., the world?s biggest insurer, triggered the ouster of its chief executive officer, Maurice ?Hank? Greenberg, in March.

The SEC notice increases the chances that Stanard could be next, said Adam Klauber, an analyst at Cochran Caronia Securities LLC.

?You?ve seen a precedent where AIG had some issues and you saw the CEO depart,? said Klauber, whose Chicago-based firm has a ?market perform? rating on the stock.

RenaissanceRe spokesman David Lilly declined to comment on Stanard?s employment status or on whether the board?s independent members had taken any action since rebuking Stanard and four other senior executives in March.

An assistant for Stanard said he was in a meeting and unavailable to comment.

RenaissanceRe, which sells reinsurance to help insurers limit their losses, also buys the coverage.

The restatement fixed coverage the company bought from another Bermuda-based reinsurer, Inter-Ocean Reinsurance Co., prompting an SEC subpoena seeking information on non-traditional reinsurance that may be abused to smooth earnings. SEC spokesman John Heine declined to comment.

The restatement increased net income from 2001, 2003 and 2004 by a total of $34.4 million and lowered it by $21.9 million in 2002.

In correcting the transactions, RenaissanceRe said not enough risk had been transferred to justify favourable insurance accounting.

The company?s independent board members said Stanard and four others ?made mistakes and in some instances lacked due care in connection with the original accounting,? according to the company?s annual report.

RenaissanceRe said today that Michael Cash, a former senior vice president who left the company after refusing to accept an SEC subpoena, also received a Wells notice. Cash didn?t return a call to his mobile phone.

The SEC and New York Attorney General Eliot Spitzer have sent inquiries about non-traditional reinsurance to more than a dozen insurers and reinsurers.

The investigations prompted New York-based AIG to lower net income from the past five years by $3.9 billion.

The SEC sent RenaissanceRe a separate subpoena in April that sought information on its stake in Channel Reinsurance Ltd., another offshore reinsurer.