Grant Thornton delivers adverse verdict on Bermuda reinsurer
Grant Thornton delivers adverse verdict on Bermuda reinsurer | Insurance Business Canada
Reinsurance
Grant Thornton delivers adverse verdict on Bermuda reinsurer
Firm did not consolidate a subsidiary’s financial statements, it states
Reinsurance
By
Kenneth Araullo
Independent auditor Grant Thornton has issued an adverse opinion on the financial statements of Bermuda reinsurance company Annuity and Life Re (Holdings), an investment holding company.
The auditor noted that the reinsurer did not consolidate the financial statements of its subsidiary, Multivir Inc, a Houston-based cancer researcher and a clinical trial stage biotech company focused on gene therapy drugs for oncology patients. The company aims to develop immune therapies targeting cancer’s fundamental molecular defects and has several active and planned clinical trials.
The decision was made because the investment is fully impaired in the group’s consolidated financial statements, and the group has documented plans to dispose of it.
As per the Royal Gazette, Holdings reported net income of $563,077 for 2023, compared to a net loss of $1,937,212 in 2022.
The financial statements include the accounts of Holdings and its wholly owned subsidiary, Annuity and Life Reassurance, Ltd, a Class C Bermuda insurer. Annuity and Life Reassurance has not written any long-term business since December 31, 2005, and does not plan to resume such activities in the near future.
What led to the adverse opinion?
It was suggested that if Multivir Inc had been consolidated, many elements in the financial statements would have been materially affected. The effects on the consolidated financial statements of this omission have not been determined, it was stated.
Due to the significance of these issues, the auditors concluded the financial statements did not fairly present the financial position of Annuity and Life Re (Holdings), Ltd, nor the results of its operations and cash flows under US generally accepted accounting principles, as of December 31, 2023, and 2022.
The notes to the company’s consolidated financial statements, filed with the Bermuda Stock Exchange, indicate that management deemed the loans to Multivir Inc impaired.
An allowance of $100,000 for the principal and $869,019 for the interest was recorded in 2023, compared to $51,500 for the principal and $864,299 for the interest in 2022.
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