Deloitte cleared in $850 million hurricane trial
Global accountancy firm Deloitte has been cleared of responsibility for the $850 million in losses suffered when Florida’s Poe Insurance Group collapsed ten years ago. A jury at Leon County Court heard during a five week trial that the three companies in the group - Southern Family, Atlantic Preferred and Florida Preferred - suffered huge financial losses after an unprecedented series of hurricanes during a 15 month period.
The Florida Insurance Guaranty Association paid the claims as the firms had become insolvent and the Florida Department of Financial Services took over the companies. In 2010 it sued Deloitte alleging that the auditors should have seen ‘red flags’ in the companies’ finances. The jury however agreed with the defendants that the huge level of claims following the hurricanes were to blame for the Poe firms’ collapse. A separate case brought by the state against Poe Financial Group continues.
Marsh acquires Sumitomo’s American business
The American arm of Japan’s Sumitomo Life Insurance Company has been acquired by Marsh. The employee benefits brokerage and consulting business has offices in New York, Los Angeles, Atlanta, Chicago and Crescent Springs, Kentucky and specializes in providing employee benefits to US subsidiaries of Japanese companies. Employees of the firm will become part of Marsh’s Asia Client Services team.
Insurers lobbying US Congress as Fed regulations draw nearer
With the Federal Reserve set to impose new capital rules on the $1 trillion insurance industry major players in the industry are lobbying lawmakers in a bid to avoid the worst. Reuters reports that a group started by two House of Representatives members and a Senator is aiming to protect the interests of the insurance sector by consolidating support for it throughout Congress. The insurance sector has spent more than banks and all other sectors except pharmaceuticals lobbying in the last five years according to figures from opensecrets.org. The Fed has already introduced tough regulation on the banking sector and there is concern that insurers could face similar requirements on capital reserves.
