Canadian Underwriter

Aon resolves issues with SEC

August 20, 2002   by Canadian Underwriter

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Aon Corp., the world’s largest brokerage, says it has resolved issues with the U.S. Securities Exchange Commission (SEC) over financial reporting. Aon highlighted the issues when releasing its second-quarter 2002 results recently, including such things as reporting of investment impairments and business restructuring charges. The news, combined with the announcement that Aon was putting on hold the planned spin-off of its underwriting operation, caused the company’s stock to drop 30% in one day.
At the time, Aon CEO Patrick Ryan said that the issues raised by the SEC would not materially affect aggregate stockholders’ equity, a point he confirms in the most recent press release.
One issue, the allowance for uncollectable reinsurance for benefits paid to families of Aon employees killed in the September 11, 2001 terrorist attacks, is being restated with fourth-quarter 2001 results. The pretax allowance of US$90 million (US$0.20 per share) was formerly part of first-quarter 2002 results. As a result, 2001 net income drops from US$203 million (US$0.73 per share) to US$147 million (or US$0.53 per share).
Aon has volunteered to have its filings certified with the SEC, and competitor Willis has announced it will follow suit.

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