Phoenix Finds Errors During Financial Restatement Process

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The Phoenix Cos. said that while working to restate its financial performance from 2009 through mid-2012, it has found errors, some of which have been quantified while others have yet to be fully assessed.

“These errors, along with additional errors that may be identified, could, individually or in the aggregate, materially and adversely impact the 2012 unaudited statutory financial results that have been made publicly available by the company,” the boutique life insurer and annuity company said in a filing late Friday with the U.S. Securities and Exchange Commission.

The unaudited statutory financial statements are calculated differently from financial statements as measured by GAAP, generally accepted accounting principles. Phoenix announced in November 2012 that it needed to restate its financial performance, as measured by GAAP, for 2009, 2010, 2011 and the first two quarters of 2012.

Additionally, the company has delayed filing any GAAP financial statements since mid-2012. Phoenix did, however, provide unaudited statutory financial results on time with state regulators for the last two quarters of 2012, the full year of 2012, and the first quarter of 2013.

The company said it expects to provide unaudited second-quarter financial results, for statutory purposes, by Aug. 15.

For the company’s insurance subsidiaries to complete audited statutory financial statements for last year, the company must substantially complete the restatement of its GAAP financial statements. Filing audited statutory financial statements also hinges on other factors.

“The situation remains fluid as additional issues are identified and resolved,” the company said in its filing.

Phoenix’s insurance company subsidiaries have received extensions from regulators in Connecticut and New York for submitting 2012 audited statutory financial statements.

In Connecticut, the company has an extension until Aug. 1, and Phoenix will seek additional extensions as necessary. Phoenix said its subsidiaries were notified by insurance regulators in “a few jurisdictions” that they may be subject to fines or penalties.

About Matthew Sturdevant

Full-time staff journalist at The Hartford Courant and magazine freelancer with a master's degree in writing from Dartmouth. My work has appeared in The Los Angeles Times, The Chicago Tribune, Taiwan News, The Baltimore Sun and many other news sources. My blog has been referenced by Politico.com, the Kaiser Family Foundation, the Georgetown Law Library and a number of organizations in healthcare and business. Sturdevant’s blog is "a well-written wealth of ideas," said The Donald W. Reynolds National Center for Business Journalism, (businessjournalism.org, May 18, 2011). I have experience writing for newspapers, magazines, Web sites and blogs as well as shooting and editing video. I made regular appearances on news-talk radio and on the NBC affiliate station in Corpus Christi, Texas. I made occasional appearances on the Fox affiliate in Connecticut promoting Hartford Courant articles.

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