Pilot on “strong financial footing”: Aviva CEO

Despite recent charges stemming from reserve shortfalls at Pilot Insurance, the CEO of parent Aviva Canada says the company has completed a restructuring plan and is now on “strong financial footing”.Last week, the Financial Services Commission of Ontario (FSCO) confirmed the filing of charges against Pilot’s former CEO Stu Kistruck and CFO Colin Simpson for furnishing false or incomplete information to the regulator. Both men had been let go from Pilot following discovery of a reserve shortfall 13 months ago.”After the reserve problem at Pilot was discovered 13 months ago as a result of an internal audit, we acted immediately by informing FSCO of the issues identified and restated Pilot’s 2002 financial statements to reflect the information uncovered in the internal audit,” says Aviva Canada CEO Igal Mayer. “Pilot was solvent after the restatement of its 2002 financials, but at that time its solvency margin was below what was acceptable to FSCO.”Aviva put an “action plan” in place to shore up the company, including a $71 million stop-loss reinsurance program with ultimate parent Aviva plc, asking its brokers to take a voluntary 10% commission reduction for a 10-month period, and other internal cost containment measures, Mayer explains. He says that program is now complete and Pilot is above the required solvency margin.While Mayer would not comment on the company’s current relationship with Kistruck and Simpson, he says the charges are against the individuals only, not the company itself, and “the issue is now long behind Aviva”.