The Pennsylvania Insurance Department has filed suit against accounting firm Deloitte & Touche LLC, which the department charges inflated Reliance Insurance Co.’s financial statements by $1 billion, contributing to the insurer’s collapse last year.
According to Dow Jones and the Philadelphia Inquirer, the insurance department filed the suit in Commonwealth Court Oct. 15. Insurance Commissioner M. Diane Koken charged the accounting firm and Jan Lommele, its principal actuary, of professional negligence and malpractice, misrepresentation, breach of contract, and aiding and abetting breaches of fiduciary duties on the part of Reliance chairman Saul Steinberg and other company officials.
Deloitte denied any wrongdoing. Lommele was not available for comment.
The state insurance department liquidated Reliance in 2001 after anticipating a $1 billion shortfall between the insurer’s assets and its likely future claims.
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