NU Online News Service, April 22, 2004, 7:15 p.m. EDT – Annuity and Life Re (Holdings) Ltd., Hamilton, Bermuda, wants to hire Marcum & Kliegman L.L.P., Woodbury, N.Y., to replace KPMG as its new auditing firm.[@@]
The appointment is subject to shareholder approval.
Marcum was founded in 1951 and has 26 partners.
Annuity and Life Re, a life reinsurer, has faced heavy losses in recent years and has had to restate its earnings several times. But Jay Burke, the company’s chief executive, suggested in March that rising interest rates and the renewal of a key letter of credit could help the company get its operations back on track.
“We are very pleased with the engagement of Marcum & Kliegman and believe this represents additional progress toward stabilizing our company,” Burke says in a statement.
KPMG warned March 30 that it had decided not to seek re-election as Annuity and Life Re’s auditing firm.
KPMG has included a few significant observations about Annuity and Life Re’s financial statements in its audit reports, according to a report that Annuity and Life Re has filed with the U.S. Securities and Exchange Commission.
Burke served both as chief executive and chief financial officer of Annuity and Life Re for several quarters before the company hired John Lockwood to take over as CFO.
KPMG suggested in May 23, 2003, that the company needed a separate CFO and more accounting support for the CFO to prevent accounting mistakes, Annuity and Life Re says.
KPMG welcomed the appointment of Lockwood as CFO in a letter dated March 24, 2004, but KPMG says Annuity and Life Re still needs to simplify and strengthen the process for accounting for a major reinsurance contract, Annuity and Life Re says.
KPMG also has suggested in audit reports on the company’s 2002 and 2003 financial statements that there are questions about whether Annuity and Life Re can continue as a going concern, Annuity and Life Re says.
KPMG has not included any other adverse opinions, disclaimers or qualifications in its audit reports, Annuity and Life Re says.