Question

In 2015, a jury ruled that Deloitte & Touche LLP wasn’t liable in Florida’s biggest-ever insurance-company collapse. The Florida Department of Financial Services did not prove its claims that Deloitte was negligent in its audits for three insurance companies that collapsed after a string of hurricanes hit the state in 2004 and 2005. The state was seeking up to $850 million in damages. Deloitte had maintained that the insurance companies’ collapses were caused by an unprecedented string of hurricanes, not by an audit failure.

Research this case to learn further details.

How was Deloitte allegedly connected to the damages in this case?

Why did the Florida Department of Financial Services decide to sue Deloitte?

Answer 1

Solution:-

How was Deloitte allegedly connected to the damages in this case and why did the florida department of financial services decide to sue deloitte:-

In a statement, Deloitte said it was “gratified” by the verdict and that it is “committed to conducting audits of the highest quality.” The firm has long maintained that the insurance companies’ collapse was caused by the unprecedented string of hurricanes, not any accounting failure.

Ashley Carr, a spokeswoman for the Department of Financial Services, said the department believed Deloitte was at fault in the companies’ collapse and cost Florida taxpayers hundreds of millions of dollars, but “the jury carefully weighed the evidence and reached an alternative conclusion. Unfortunately, it is the people of Florida who lost today,”

Florida regulators had contended that Deloitte botched the audits of three property-insurance companies that were part of the Poe Financial Group, giving the companies a clean bill of health even though the regulators said they had been rendered insolvent by the claims stemming from a wave of hurricanes in 2004. If Deloitte had recognized that, regulators say they could have stepped in sooner and prevented the companies’ condition from worsening further when more hurricanes hit the state in 2005. The regulators ultimately took control of the companies, and a state-created fund had to pay out about $1 billion in claims to their policyholders.