Pilot senior management ousted on discovery of reserve shortfall

Some key members of Pilot Insurance Co.’s senior management have been removed from their positions as a result of prior year reserving shortfalls uncovered on the company’s books following investigation by parent-owner CGU Group Canada. A statement released yesterday by CGU president Igal Mayer says that Pilot will restate its annual accounts and regulatory filings for the 2002 financial year.
Pilot policyholders will not be affected by the financial troubles of the company, Mayer notes. The relevant regulators have also been informed of the situation at Pilot, he adds. No indication has been given to the extent of the reserve shortfall(s), nor over which periods or how the deficiencies occurred. “Pilot continues to meet its capital requirements and regulatory solvency guidelines on a pro-forma basis.”
Mayer says that Pilot CEO Stuart Kistruck left the company on April 7, along with Colin Simpson and George Hamilton, the vice president of finance and assistant vice president of claims. Jim Hewitt, current vice president of CGU Group Canada, has been appointed CEO of Pilot. He is accompanied by Norm McIntyre, senior vice president and corporate secretary at CGU, as the new senior vice president and CFO of Pilot. The appointments are effective immediately. Mayer notes that the actions taken by CGU Group Canada have the full support of the company’s board of directors as well the Aviva plc head-office in London, U.K. “We have every confidence that Pilot will remain a leading provider of home and auto insurance in Ontario through independent brokers.”