Insurance brokerage Aon Corp. ( AOC) was plunging about 32% after the company warned that it may have to restate its 1999 and 2000 results after consulting the Securities and Exchange Commission about its accounting practices.

The company said in a press release and conference call that the SEC has raised questions about writedowns and the timing of costs. Regulators believe that certain noncash losses should have been recorded in earlier periods, rather than the current quarter.

If the SEC forces a restatement, Aon's 1999 results would be reduced by about $27 million, 2000 results would be slashed by $24 million, and first-quarter 2002 results would be cut by about $5 million.

In addition, the SEC warned the company to stop using EBITDA numbers, saying that it expects more information in financial reports in the future.

Aon also reported worse-than-expected results for the second quarter, posting breakeven results on its bottom line, down from 11 cents a share a year ago, including a $36 million charge from losses from an underwriting agency. Aon is suing the agency for fraud. Excluding the charges, Aon earned 13 cents a share, down from 44 cents last year.

Aon's press release included numerous measures of profitability reflecting the exclusion of various charges, tax items, accounting adjustments, reserves and goodwill amortization. Excluding all of those items, the company earned 33 cents a share in the quarter.

In a written statement, company CEO Patrick Ryan said, "Second quarter bottom line results were the worst in Aon's history due to certain unusual items, compressed operating margins, and lower investment income."

Excluding charges, Aon now expects to earn about $1.80 for the year, missing the consensus estimate of $2.28 a share provided by Thomson Financial/First Call.

Blaming poor stock market conditions, the company has scrapped plans to spin off its underwriting segment Combined Specialty Group. Aon is currently examining other options for the unit.

Shares were recently down about $6.95 to $14.25 on the news.