California’s State Compensation Insurance Fund recently non-renewed their contract with former auditors PricewaterhouseCooopers LLP, effective immediately. State Fund notified both the auditor and the California Department of Insurance on Oct. 1.
“Simply, it’s a non-renewal of a contract,” Jim Zelinski, State Fund spokesperson said. “By no means are we coming out to be critical of PwC. They did what we asked them to do, and now it’s simply a matter of reviewing other firms right now.”
No details were available as to which firms the insurer was considering.
PwC performed State Fund’s 2002 audit, over which State Fund and their appointed actuary Milliman USA had disputed the results. PwC recommended that State Fund increase reserves by $800 million retroactively to 2002 and restate their reserve figure as submitted in the 2002 financial statement to the CDI.
“We thought we were right then about our reserves, and we think we are right now,” Zelinski said. “Milliman USA validated the reserves.”
On a positive note, Zelinski said that State Fund had increased their reserves to $1.85 billion as of June 30, up from $1.45 billion at the end of 2002.
State Fund had worked with PwC for the past 20 years.
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