Insurance is all about quantifying, pricing, and managing risk. For the right price, you can usually find an insurer willing to insulate you against almost any identifiable risk.

Worldwide reinsurance specialist RenaissanceRe (NYSE:RNR) might want to find a policy against SEC risk these days. On Monday morning, the company announced a surprising development in an ongoing SEC investigation.

Michael Cash, a now-former senior vice president in charge of the company's Specialty Reinsurance business, resigned after refusing to accept an SEC subpoena. Cash's status as a Bermudan citizen greatly restricts the ability of U.S. authorities such as the SEC to compel him to testify. Nonetheless, his decision apparently flies in the face of the company's spirit of cooperation with ongoing investigations -- hence his resignation.

Though my inner anarchist wants to applaud him for "standing up to the man," this really isn't the right time, place, or manner to do so. RenaissanceRe had to restate three years of financials because of ceded premiums, which has become part of a broader investigation into the reinsurance industry.

As Fools who follow insurance might already know, regulators are atwitter over so-called "finite reinsurance" -- a product that blends aspects of financing and insurance. In particular, regulatory authorities are worried that insurance companies have used these as "nudge-nudge, wink-wink" agreements to falsely improve the appearance of their own balance sheets.

In one notorious case, AIG (NYSE:AIG) had to restate five years of results after an investigation of the firm's accounting. While the dust is still settling on that case, it appears that AIG worked with Berkshire Hathaway's (NYSE:BRKa) General Re to misstate (and inflate) its loss reserves.

As if an ongoing investigation weren't bad enough, hurricane season has returned. While the U.S. got off relatively easy with Hurricane Dennis, storm activity seems to be escalating. As a Goldman Sachs report recently pointed out, RenaissanceRe has considerable exposure to potential hurricane damage. Top that off with renewed fears of losses that were due to terrorist acts like the London bombings, and it's not exactly the best of times for RenaissanceRe.

While I like the reinsurance business in principle, I'm not sure this is the right time to load up on RenaissanceRe shares. If Cash would rather quit his job than divulge the truth, there's likely a lot more to this story than we've heard thus far.

Make it your policy to read related Foolishness:

Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).