Tower Group International says filed financial statements for the years 2011 and 2012 cannot be relied upon and because of “inadvertent mistakes.”
Last month Tower said it strengthened loss reserves by about $365 million for accident years 2009-2011, resulting in an impairment charge of $215 million for the second quarter. The Hamilton, Bermuda-based company then dove in to review its reserve analyses.
Tower says it has reached the conclusion that “material weaknesses exist in internal control over financial reporting related to the company's loss reserving and premiums receivable reconciliation processes.”
The company outlines several reserving adjustments for insurance as well as decreases on reinsurance recoverables in the years 2010, 2011 and 2012.
Tower says it was not aware of the mistakes when it announced the reserve strengthening last month and the errors do not increase the charge of $365 million.
The company says it will file its second-quarter results as soon as possible, and has warned it could record loss reserve hits of $60 million to $110 million.
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