According to a Wall Street Journal article, New York Department of Financial Services Superintendent Benjamin Lawsky has asked 134 insurers in the state to provide information about IUL illustrations....
Jan. 24--HARTFORD -- The Phoenix Cos. has disclosed a preliminary agreement on a settlement with the Securities and Exchange Commission over its delay in filing quarterly financial reports for several years.
The proposed settlement, the company said, would acknowledge that it violated laws on financial disclosure, promise not to do it in the future, and pay unspecified civil monetary penalties.
The settlement, subject to approval by commissioners in Washington, is referenced in an SEC filing Thursday. A commission spokeswoman declined to elaborate on it Friday.
The company announced the progress toward a settlement with regulators as part of an effort Thursday to convince bondholders to give it more time to disclose its financial performance from 2012 to the present.
It had earlier promised the bondholders, who hold $253 million in debt, that it would file the delayed reports by the end of last year.
Currently, those bondholders have the right to ask for their money early if the forms aren't filed by March 7. The company has asked them to wait until March 16.
The bondholders who agree to the delay will receive about 6 cents on every $25 in bonds from Phoenix, in addition to the standard principal and interest payments.
Because of the accounting issues, three of Phoenix's insurance companies subsidiaries have been unable to sell life insurance contracts or SEC-registered annuities. The company has been selling fixed indexed annuities.
Not only does Phoenix need to convince a majority of its bondholders to give it more time, it also needs to convince the New York Stock Exchange to give it an extension to April 3 to file its annual report for 2012.
The NYSE has said it will move forward with delisting the company at the end of January because of the lack of timely financial reporting.
"We appreciate the support bondholders have provided us in the past," the company wrote. It needs the lenders that hold a majority of the principal to agree by Feb. 20.
In the request to bondholders, Phoenix disclosed multiple risk factors to its business.
It said that its ability to meet its end-of-March deadline for financial filings "is subject to a number of contingencies, including but not limited to, whether we continue to identify errors in our consolidated financial statements. ... Even if we are successful in ... obtaining a waiver from the [bond]holders, there can be no assurances that we will make all our filings with the SEC and the [bond] Trustee by such date."
In an earlier disclosure, the company acknowledged that the need to restate financial results in 2012 came from "multiple material weaknesses in our internal control over financial reporting," and in this request, management acknowledged many of those accounting weaknesses have not yet been remediated.
The company said even once the financial reports are filed, they might not be the final word.
"The restatement may not be adequate to identify and correct all errors and we may discover additional errors and our financial statements remain subject to the risk of future restatement," the request said.
Phoenix announced in November 2012 that it needed to restate earnings and other financial statements for 2009, 2010, 2011 and the first two quarters of 2012. The company has been working on that process since then.
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