A.M. Best Co. is maintaining the under review with negative implications status on the financial strength rating (FSR) of B+ (Good) and issuer credit ratings (ICR) of “bbb-” of the subsidiaries of The Phoenix Companies, Inc. (Phoenix) (Hartford, CT) (NYSE: PNX). A.M. Best also is maintaining the under review with negative implications status on the ICR of “bb-” of Phoenix. These rating actions follow the company’s recent announcement of an additional delay in the filing of its third quarter and full-year 2012 GAAP financial statements. (See below for a detailed listing of the companies.)
In November 2012, Phoenix made its initial announcement regarding the delayed filings as it would be restating previously issued GAAP financial statements for the years ended December 31, 2011, 2010 and 2009, the interim periods for 2011 and the first and second quarters of 2012.
To date, the impact of the correction of errors identified and quantified in the restatement of prior periods has not had a material impact on Phoenix’s GAAP equity as of its last filing date of June 30, 2012. Additionally, although not anticipated at this time, the newly announced delay and potential impact of additional adjustments to consolidated stockholders’ equity and consolidated cash and cash equivalents could be material and adverse. Moreover, in Phoenix’s press release dated March 15, 2013, management believes it has identified multiple material weaknesses in its internal controls over financial reporting and is continuing to assess its disclosure controls and procedures.
A.M. Best has received and reviewed the group’s unaudited statutory statements as of December 31, 2012. A.M. Best notes that Phoenix plans to provide an update on the restatement on or before April 30, 2013.A.M. Best will continue to monitor developments regarding Phoenix’s restatement and filings, including holding discussions with management regarding any additional errors found and/or potential changes in the materiality of any adjustments or processes before concluding on the under review status.