Aon Corporation said it has resolved all of the comments raised by the Securities and Exchange Commission (SEC) that were extensively outlined in Aon’s Aug. 7 press release. The comments were the result of customary reviews of Aon’s SEC filings.
Patrick Ryan, chairman and CEO of Aon Corporation, said, “We are pleased to report that Aon has resolved all of the comments from the SEC. As expected, Aon’s aggregate stockholders’ equity, which equaled $3.7 billion as of June 30, 2002, has not been impacted.” Ryan added, “Harvey Medvin, EVP and CFO of Aon Corporation, and I will certify Aon’s filings with the SEC, as will officers of other large U.S. public companies. The certification will include Aon’s second quarter 2002 Form 10-Q that will be filed today.”
The SEC has advised Aon to record an allowance for uncollectible reinsurance of $90 million pretax ($0.20 per share) in fourth quarter 2001. Aon had previously recorded this allowance in first quarter 2002. The reinsurance recoverable was originally established in third quarter 2001. The recoverable relates to insurance benefits paid to beneficiaries of Aon employees who perished in the Sept. 11 tragedy.
The restatement to fourth quarter 2001 will not impact Aon’s aggregate stockholders’ equity of $3.7 billion at June 30, 2002.
Given the restatement, first half 2002 earnings shown in Aon’s Aug. 7 release will increase by $0.20 per share to reflect the first quarter reversal. Aon will update disclosures as appropriate.
Aon’s statements in its Aug. 7, 2002 release regarding financial outlook are unchanged by the resolutions with the SEC since the 2002 earnings per share guidance excludes unusual charges for World Trade Center items.
As anticipated in Aon’s Aug. 7 release, the SEC will permit Aon to provide expanded disclosure in its future filings regarding the items noted. Except as reflected above, there will be no restatements to prior periods for the previously listed items: contingencies, WTC losses, investments, and revenue recognition of brokerage commissions and fees, life insurance commissions and amounts received directly from carriers.