Settlement to do with claims of negligence in connection with defunct insurer Reliance
Pennsylvania Insurance Commissioner finalised a $40m settlement with Deloitte & Touche in connection with the firm’s auditing services for defunct Reliance Insurance Company.
Acting as statutory liquidator for Reliance, Insurance Commissioner Joel Ario said that the goal has been to maximize recovery for Reliance policyholders.
‘The grand total of recoveries in the Reliance estate total nearly $145m from litigation brought by the department,’ he said.
The department has been working on new requirements to promote the accuracy and reliability of financial statements filed by insurance companies.
Other developments in financial regulation include strengthening risk-based capital requirements and adopting more stringent standards for actuarial opinions on insurance company reserves.
Reliance was placed into liquidation in October 2001 after regulators found the company was insolvent.
A year later, the liquidators filed a complaint against Reliance’s outside auditor, Deloitte & Touche. The complaint alleged claims for breach of fiduciary duties, professional negligence and the recovery of preferential transfers.
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